CMS Considering Obesity Drug Coverage Under Medicare
This article was originally published in The Pink Sheet Daily
Executive Summary
The agency is "open" to considering coverage of obesity drugs in light of a recent change to its obesity policy, but seeks comment on how it can legally do so, given the prohibition of weight loss drug coverage under the Medicare Modernization Act.
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The Centers for Medicare & Medicaid Services is seeking comment on how drugs that treat obesity can be covered under the new Medicare drug benefit despite language in the law that prohibits coverage of "weight loss" drugs. CMS would be interested in comment on obesity drugs, "specifically on the legal argument of how such things could be covered in the face of the language in the statute that says that drugs used for weight loss couldn't be" covered, Center for Beneficiary Choices Health Plan Policy Group Director Robert Donnelly said Aug. 16 during an "open door" forum. CMS was asked if obesity drugs would be covered under the Part D benefit in light of the agency's recent update to its obesity coverage policies. The agency removed language in the Medicare Manual July 15 that stated that obesity is not an illness. The new language will allow obesity therapies to be reimbursed if they demonstrate meaningful health benefits (1 (Also see "CMS Plans To Issue Clinical Evidence Position Paper In August" - Pink Sheet, 20 Jul, 2004.)). Donnelly indicated that CMS is "open to that line of reasoning. We'll just need to make sure that we have it figured out for the final" regulation. The agency issued draft implementing regulations for Title I (Part D) and Title II (Medicare Advantage) of the Medicare Modernization Act July 26; the comment period closes Oct. 4 (2 (Also see "Medicare Rx Implementing Regs Open For Comment Until October" - Pink Sheet, 26 Jul, 2004.)). Application of CMS' new obesity policy to Part D may be hindered by language in the Medicare Rx statute defining "covered outpatient drugs" as those covered by Medicaid, which excludes weight loss therapies. CMS Medical Advisor Richard Lawlor suggested that the therapeutic categories listed in U.S. Pharmacopoeia's model Medicare formulary may resolve the question of obesity drug coverage. "The first thing we have to wait for is what the different drug categories are going to be within the formulary guidelines that will be put forth" by the USP, Lawlor said. Under the Medicare law, USP is charged with drafting a model formulary for Part D drug plans that will serve as a "safe harbor" for plan sponsors. USP plans to release a draft of the model formulary the week of Aug. 16 (3 (Also see "USP Medicare Formulary Classes Should Use Mechanism Of Action, PhRMA Says" - Pink Sheet, 16 Aug, 2004.)). One option for Part D coverage of obesity drugs would be to classify them as preventive therapies rather than weight loss drugs, as was recently done for health savings accounts established by the Medicare law. Obesity drugs will be eligible to receive first dollar coverage by high deductible health plans offered with HSAs under a revision to the HSA preventive care safe harbor (4 (Also see "First-Dollar Coverage For Some Drugs Allowable With Health Savings Accounts" - Pink Sheet, 26 Jul, 2004.)). - Steele Thomas |