On May 19, 2014, the Centers for Medicare and Medicaid Services (CMS or the Agency) released a final rule outlining the requirements for Medicare Advantage (MA) and Part D plans for contract year 2015 (the Final Rule). CMS declined to finalize several provisions that had faced widespread opposition from a number of lawmakers, drug manufacturers, patient advocates and other stakeholders, while at the same time finalizing other provisions that will be of particular interest to manufacturers.
For example, CMS finalized the following provisions:
- Combination Products. CMS will codify its existing treatment, through sub-regulatory guidance, of certain combination products as Part D drugs. In particular, CMS states that only combination products approved in their combination form as a drug, vaccine, insulin or biologic meet the definition of Part D drugs. Combinations of products bundled or packaged together are not Part D drugs, unless that bundle has specifically received FDA approval.
- Prescriber Practices. The Final Rule will permit the Agency to deny a physician’s Medicare enrollment if the DEA or state medical board revokes the physician’s prescribing privileges, and to review physicians’ prescribing patterns and exclude those with abusive practices.
- Expanded Data Release. CMS finalized its proposal to broaden its existing policy on the release of Part D prescription drug event (PDE) records in order to facilitate research and accelerate “the drive toward an information- and value-based system.”
- Reward/Incentive Programs. CMS finalized its proposal to allow MA organizations to offer reward and incentive programs to Medicare enrollees to encourage participation in activities promoting healthy living, within certain parameters outlined in the Final Rule. CMS declined to expand this provision to include Part D plans, despite requests from certain commenters that it do so.
- Affordable Care Act (ACA) Overpayment Provisions. CMS finalized regulations implementing the overpayment provisions under Social Security Act § 1128J, added by the ACA.
CMS declined to finalize a number of provisions from the proposed rule, as forecasted in a March 10 letter from CMS Administrator Marilyn Tavenner to Congressman Henry Waxman (sent shortly after the close of the proposed rule comment period), including:
- Classes of Clinical Concern Changes. CMS proposed significant changes to the longstanding Part D “six protected classes” policy—but, in light of concerns raised by a number of lawmakers and stakeholders, did not finalize those proposals at this time. However, CMS emphasizes its authority to develop new criteria to identify classes of clinical concern and signals that it may seek again to exercise that authority in the future.
- Non-Interference Provision. CMS states that “additional work needs to be done to better explain our policy” on interpreting the non-interference provision and “to address the concerns and arguments advanced by numerous commenters.” CMS states that it does not intend to codify the provision without issuing an additional notice of proposed rulemaking in the future.
- Medication Therapy Management (MTM). CMS declined to finalize proposed changes to its current MTM eligibility criteria. However, CMS states that it will “closely scrutinize sponsors that may be abusing the flexibility provided” currently, and specifically notes concerns about racial disparities in MTM participation.
- Any Willing Pharmacy. CMS declined to finalize its proposed changes to the “any willing pharmacy” contracting provisions and cost-sharing levels—but stated that it may engage in future rulemaking on these issues.
- Part D Access during Disasters/Emergencies. CMS declined to finalize its proposal to codify an obligation for Part D sponsors to relax “refill-too-soon (RTS)” edits during natural disasters.
The Final Rule reflects CMS’ continued efforts to control costs and to reduce fraud and abuse in the Medicare Part D and Medicare Advantage programs. It also imposes important changes for stakeholders to bear in mind from a compliance perspective, and sets the stage for additional potential policy changes in the future.