Medicare Part D Cost-Sharing Parameters To Be Set By CMS Under Proposal

The Centers for Medicare and Medicaid Services is proposing to set annual limits on drug cost sharing required by Medicare Part D and Medicare Advantage plans, according to a proposed rule released by the agency Oct. 9.

For Part D, the limits would apply to tiered cost-sharing - copayments or coinsurance - for "non-defined standard benefit designs," the proposal says.

The proposed rule addresses a number of Part D program adjustments, including some that directly affect patient access to drugs, such as cost sharing and utilization management controls. It also includes a new approach to how CMS will select "protected classes" in formularies. The proposal is scheduled to be published in the Federal Register Oct. 22; comments are due Dec. 8, 2009.

CMS would review Medicare plan bids from the prior year to develop an estimate of what the average cost-sharing should be under Part D and Medicare Advantage and then limit cost-sharing that exceeds those averages to a degree that could be considered "discriminatory," the agency says.

Those limits would be communicated to Medicare contractors prior to the bidding deadline for the upcoming year, either through the annual "call letter" instructions to sponsors or through other memoranda.

Discriminatory Cost Sharing

"A sponsoring organization's cost sharing will be considered discriminatory if it is higher than the maximum level that we determine to be non-discriminatory for a particular service, in the case of a [Medicare Advantage] plan, or a drug cost tier in the case of a Part D plan," CMS says.

Although the thresholds will be based on the prior year's experience, they "may be adjusted based on bid submissions for the current year," the proposal states.

The Pharmaceutical Research and Manufacturers of America identified high cost-sharing requirements as an impediment to medication access in comments to CMS on the draft 2010 "call letter" (¹ (Also see "PhRMA Targets High Cost-Sharing For Drugs In Comments To CMS" - Pink Sheet, 23 Mar, 2009.)).

For example, PhRMA supported the idea that cost sharing for specialty tiers be capped at 25 percent of the cost of the drug or an actuarially equivalent amount. The final version of the call letter does not set a 25 percent coinsurance cap.

During its review of Part D bids for the 2010 benefit year, CMS did not find evidence of "discriminatory pricing" in the specialty drug tier, according to Cynthia Tudor, director of the Medicare Drug Benefit and C and D Data Group within CMS' Center for Drug and Health Plan Choice. Tudor commented on the bids during an Oct. 14 webinar sponsored by Avalere Health.

P&T Committee Review Of Formulary Edits

The proposal outlines a new requirement regarding Part D formularies and pharmacy and therapeutics committee reviews regarding utilization management controls.

Specifically, CMS plans to require that plan P&T committees review and approve all prior authorization criteria, step therapy protocols and quantity limit restrictions applied to each covered drug.

CMS previously required only that P&T committees review for "clinical appropriateness" the Part D sponsor policies that guide utilization management processes.

The agency says it understands this to be standard practice for P&T committees, but that the new requirement "adds a necessary beneficiary protection by ensuring that independent clinical experts have reviewed and approved each application of these utilization management tools for clinical appropriateness."

The proposal addresses a number of other issues of interest to pharma companies. Among them, CMS invites comments on how drug regimens may be disrupted by the agency's policies of randomly assigning low-income beneficiaries to Part D plans, on new medication therapy management activities and on expanding the type of prescription drug claims data it can collect and release for "non-payment" purposes, such as research by outside organizations.

- Cathy Kelly ( ² [email protected] )