Pharmacy medical billing: Lower Drug Prices in Medicare Advantage and Part D

Pharmacy medical billing: Lower Drug Prices in Medicare Advantage and Part D

CMS is allowing Medicare Advantage plans to cross negotiate Part D drug prices Starting in 2019, insurers may use step therapy to choose the least expensive drug first before moving on to another prescription.

For the first time in the history of healthcare US, Medicare Advantage plans that also offer a Part D benefit have now the option of cross negotiating for Part D drugs to get the lowest prices.

Starting January 1, 2019, plans may ensure that a beneficiary who is newly diagnosed with a condition begins treatment with a cost-effective biosimilar before progressing to a more costly drug therapy if the initial treatment is ineffective.

The key changes of the proposed rule are as follows:

Implementing the broader use of prior authorization and step therapy for protected class drugs, determining the use for protected class indications.

Under CMS’ proposal, PA requirements would be allowed for any protected class drug with more than one medically-accepted indication to determine that the drug is being used for a protected class indication, regardless of its status as a new start or existing therapy.

CMS would also allow indication-based formulary design and utilization management for protected class drugs.

Providing Part D plans with greater flexibility to negotiate discounts for drugs in “protected” therapeutic classes, so beneficiaries who need these drugs will see lower costs;

Requiring Part D plans to increase transparency and provide enrollees and their doctors with a patient are out-of-pocket cost obligations for prescription drugs when a prescription is written;

Codifying a policy similar to the one implemented for 2019 to allow “step therapy” in Medicare Advantage for Part B drugs, encouraging access to high-value products including biosimilar; and

Implementing a statutory requirement, recently signed by President Trump, that prohibits pharmacy gag clauses in Part D.

Exclude the protected class drug from a formulary if the drug represents only a new formulation of an existing single-source drug or biological product, regardless of whether the older formulation remains on the market.

This proposal is intended to address the situation, for example, where a manufacturer introduces a more expensive extended-release version of a drug to the market while also withdrawing from the market the predecessor immediate release version when no generic was available.

Such a scenario could arise with a protected class drug that might leave Part D sponsors with no option but to add the new, more expensive product to their formularies and could result in increased costs for Part D enrollees and the Part D program.

  • Exclude a protected class drug from a formulary if the price of the drug increased beyond a certain threshold over a specified look-back period.
  • CMS proposes to require Part D sponsors to include information about negotiated price changes and lower-cost therapeutic alternatives in the Part D explanation of benefits.
  • The Proposed Rule will require Part D sponsors to include the cumulative percentage change in the negotiated price since the 1st day of the current benefit year for each prescription drug claim in the EOB.
  • This information would provide drug price trend information for the beneficiary for all their covered Part D drugs.

Additionally, the Proposed Rule would require Part D sponsors provide information about drugs that are therapeutic alternatives with lower cost-sharing, when available as determined by the plan, from the applicable approved plan formulary for each prescription drug claim.

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