Magazine Article | January 31, 2014

CMS Guts Patient Protection In Part D

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By John McManus, The McManus Group, jmcmanus@mcmanusgrp.com

The Obama Administration welcomed in the new year by releasing a proposed rule that would eliminate patient access protections for Medicare beneficiaries in three therapeutic classes: anti-depressants, anti-psychotic, and immunosuppressive.

Currently, Medicare Part D plans must cover “substantially all” drugs in six protected classes, which ensures beneficiaries can continue to take particular drugs that work for them. The Center of Medicare and Medicaid Services (CMS) proposal would eliminate these protections immediately for anti-depressants and immunosuppressants and lift the protections for anti-psychotic medications in 2015.

Patient groups have reacted with outrage. Ron Honberg, director of policy and legal affairs for the National Alliance of the Mentally Ill said, “By undoing one of Medicare’s signature protections for persons with mental illness, the rule disregards scientific understanding that psychiatric medications are not interchangeable. A medication that works for one person does not necessarily work for another person. Prescribing decisions must be individualized, based on clinical history, side effects, and personal history.”

Although the six protected classes were not created in statute, the Bush Administration used its administrative authority to establish the patient protections for these drugs at the outset of the program, recognizing that many dually eligible beneficiaries were enrolling from state Medicaid plans that generally did not restrict access to these products. In addition, the Administration understood that while patient adherence may increase the Part D spend — something contrary to the economic incentives of a free-standing prescription drug plan — it could substantially reduce overall healthcare costs to Medicare.

In 2008, the Democrat-controlled Congress enacted a Medicare law, overriding President Bush’s veto, which created a two-part test to identify protected classes. The class of drug must be one which:

  1. Restricted access would have a major or life-threatening clinical consequence; and
  2. Beneficiaries have significant need for multiple drugs.

Importantly, that law neither explicitly affirmed the current six protected classes nor suggested that they were inappropriate. In addition, rulemaking by the Obama Administration in 2009 and enactment of the Affordable Care Act in 2010 did not change this two-part test or change the six protected classes.

Thus, it was a surprise to patients and pharmaceutical manufacturers alike that CMS chose to fundamentally deny critical beneficiary protections that have been entwined into the fabric of the program for eight years. Although Part D cost growth has declined from 3 percent to 1 percent in the three most recent years data is available, CMS said the policy change is necessary to provide plans with additional tools to constrain costs and deter overutilization.

Unfortunately, the Obama Administration’s approach to this issue is entirely consistent with its implementation of its philosophy of healthcare “reform” — its misguided fixation on constraining costs trumps patient access.

Millions of enrollees in Affordable Care Act (ACA) plans are now painfully discovering that their provider networks are more akin to Medicaid than to the commercial plans they may be more accustomed to. A December 2013 McKinsey study of 20 metropolitan areas found that two-thirds of ACA plans had “narrow” or “ultra-narrow” networks, with at least 30 percent of the top 20 hospitals excluded. The median premium was 26 percent lower for these plans than comparable benefit packages with broad networks.

For example, Blue Shield of California asked providers to accept a 30 percent discount for its ACA plan, but discovered that 40 percent of the doctors and 25 percent of its hospitals that participate in its commercial offerings declined to participate in its Obamacare network. If the CMS proposal goes through, only anti-retroviral, antineoplastics, and anti-convulsants will retain the protected status that has been critical to patient access and optimal clinical outcomes. Patients with severe mental illnesses or organ transplants will lose access protections to products that may be critical to their unique physiological needs.

The good news is that the Obama Administration’s proposed abandonment of this core beneficiary protection is not final — yet. Patient and disease group advocates and other stakeholders have until March 6 to make their case, provide clinical evidence, and exert political pressure to get the Obama Administration to reverse this dangerous policy.