CMS issues final regulations for Medicare Advantage and prescription drug benefit (Part D) programs

BALTIMORE — The Centers for Medicare and Medicaid Services on Monday issued final regulations for the Medicare Advantage and prescription drug benefit (Part D) programs. The final rule is projected to save an estimated $1.6 billion over the next 10 years, the agency reported.

“The policies finalized in this regulation will strengthen Medicare by providing better protections and improving health care quality for beneficiaries participating in Medicare health and drug plans,” stated Marilyn Tavenner, CMS administrator.  “The final rule will give CMS new and enhanced tools in combating fraud and abuse in the Medicare Part D program so that we can continue to protect beneficiaries and taxpayers.”  

"We commend CMS for requiring plan sponsors to both disclose to pharmacies the maximum allowable cost (MAC) reimbursement limits for many generic drugs and to update MAC-based reimbursement every seven days to better reflect market costs," stated Douglas Hoey, CEO National Community Pharmacists Association. "MAC is the black box of pharmacy reimbursement. Currently community pharmacies are forced to sign take-it-or-leave-it contracts with giant pharmacy benefit managers without knowing their reimbursement rates for most drugs dispensed," he said. "Moreover, the cost of scores of generics is skyrocketing 1,000% or more virtually overnight, but the PBMs may wait months before updating reimbursement. That leaves community pharmacies with unsustainable losses of $60 to $100 or more per prescription. In an era of instant communication such payment update delays are indefensible and threaten the ability of community pharmacies to stay open and serve patients."

NCPA noted that CMS may have missed an opportunity to open preferred pharmacy networks to more competition by way of including more independent pharmacy operators. "Although CMS is not moving forward at this time to give seniors more pharmacy choice," Hoey said, "NCPA appreciates the agency's comments in support of an 'any willing pharmacy' policy for PDPs. NCPA encourages CMS to continue to closely scrutinize these arrangements, including whether they may be discriminatory against certain beneficiaries.

As identified by CMS, key final provisions include:

• Requiring Part D prescribers to enroll in Medicare. CMS is requiring that physicians and eligible professionals who prescribe covered Part D drugs be enrolled in Medicare, or have a valid record of opting out of Medicare, in order for their prescriptions to be covered under Part D. Requiring prescribers to enroll in Medicare would help CMS ensure that Part D drugs are only prescribed by qualified individuals. The final rule allows more time – until June 1, 2015 – for implementation;


• Revoking Medicare enrollment for abusive prescribing practices and patterns. CMS will have the authority to revoke a physician or eligible professional’s Medicare enrollment if CMS determines that he or she has a pattern or practice of prescribing that is abusive, represents a threat to the health and safety of Medicare beneficiaries, or otherwise fails to meet Medicare requirements. CMS will also be able to revoke a physician or eligible professional’s Medicare enrollment if his or her Drug Enforcement Administration Certificate of Registration is suspended or revoked, or if the applicable licensing or administrative body for any state in which he or she practices suspends or revokes his or her ability to prescribe drugs;


• Expanded prevention and health improvement incentives. The final rule expands rewards and incentive programs that focus on encouraging participation in activities that promote improved health, efficient use of health care resources and prevent injuries and illness; and


• Broadening the release of privacy-protected Part D data. CMS will expand the release of unencrypted, prescriber, plan and pharmacy identifiers contained in prescription drug event records to give the public broader access to health care data pursuant to CMS’ policies and procedures for release of such data while still preserving the privacy of Medicare beneficiaries.