Payers and providers are decidedly split when it comes to CMS’ proposals to allow step therapy for Part B drugs, while insurers want to the agency to take its plans for negotiation in Part D's protected classes further.
The comment period on the Centers for Medicare & Medicaid Services' November proposed rule establishing both policies ended Jan. 25, and the submitted responses continue a debate that has raged in the industry since CMS announced last summer its plans to allow Medicare Advantage (MA) plans to implement step therapy in Part B.
Humana, one of the country’s largest MA insurers, wrote in a comment letter (PDF) that it has long backed such policies to stimulate competition in the Part B market and lower prices for beneficiaries.
“The historic barrier to more efficient management of Part B drug utilization is that existing Medicare policies made it impossible for MA plans to leverage market-based tools of competition to lower costs,” Humana said. “Without such tools, pharmaceutical companies had nearly unlimited pricing power, as evidenced by the ever-increasing costs of Part B drugs.”
CMS should now take their plans a step further, the insurer said, and allow utilization management tools available in Part D to be applied in Part B. Humana said that about half of its Part B spending is in classes where there is competition, and that does not hinder safety or efficacy for patients.
The Alliance of Community Health Plans echoed (PDF) Humana and said that step therapy can prevent overuse of unnecessary services. The group said CMS should extend its policy beyond new prescription starts, allowing MA plan sponsors to offer lower-cost alternatives to members who are already using high-cost medications.
UnitedHealthcare, another key figure in the MA market—the Kaiser Family Foundation estimates UHC and Humana together account for nearly half (41%) of the MA market—has also come out in support of the step therapy policy.
Providers, particularly those representing costly services lines such as oncology and rheumatology, have pushed back against the plan, however. The American Medical Association in September led a group of nearly 100 provider groups denouncing the step therapy policy.
In its letter (PDF), the American College of Rheumatology warns that applying step therapy in Part B could lead to access concerns, as it would build a formulary that may prevent patients from receiving the “right” drug first.
“Overall many rheumatology patients with prescription drug plans experience frustrating delays in getting treatment,” the group said. “Those in Part D face increasingly higher cost-sharing and out-of-pocket costs, making their medications unaffordable.”
In addition, the policy could lead to greater administrative overhead and reduced options for providers that must manage an increased number of prior authorization requests—in rheumatology specifically, the group said, it could worsen an existing workforce shortage that forces some practices to reject Medicare altogether.
Another wrinkle in the policy that’s confusing to providers is the policy’s reward system, Lindsay Bealor Greenleaf, director of ADVI Health, told FierceHealthcare. Insurers can offer rewards such as gift cards to patients on lower-cost alternatives, but they’re not making the choice themselves to take on a cheaper drug, she said.
Negotiating protected classes in Part D—payers want more
The rule also includes a proposal to allow Part D plan sponsors to negotiate prices in “protected” drug classes. Humana expressed concern in its letter that CMS is adopting a one-size-fits-all approach to allowing the negotiation.
“If all Part D plan sponsors are required to cover every medication within any therapeutic category, the competitive goal of the Part D program is compromised, making it very difficult for plan sponsors to obtain price concessions from pharmaceutical companies,” the insurer said.
It does support, however, CMS’ plan to allow greater use of prior authorization across these drug classes. AHCP also said it believes the agency can allow for more aggressive measures to bring down costs in the protected classes.
America's Health Insurance Plans said in a letter (PDF) to the agency that while it supports the use of formulary tools in the protected classes, it has concerns about the policy, including the lack of a standard road map for payers to rollout tech tools to better inform patients about cost-sharing at the point of prescription.
"We believe standardization is critical for any exchange of healthcare information in a well-functioning electronic system," AHIP said. "The proposal, if finalized, would inadvertently create significant burdens and duplication of efforts by plans and providers and hinder the development of these tools within Part D."
Greenleaf said providers are concerned that weakening the protected classes could hinder their prescribing decisions. This is especially true of oncology, which has some of the priciest drugs included in the protected classes, she said.
In its comment letter (PDF), the Association of American Medical Colleges said it's crucial that CMS examine these concerns instead of hurting patient access solely to cut costs.
“Interruptions or noncompliance with medication regimens can result in exacerbation of illnesses that require emergent care, with many patients seeking emergency care at AAMC-member hospitals,” the group said.