Avalere Health
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Insights

May 21, 2014

Final Medicare Advantage and Part D Rule Significantly Scales Back Proposed Policies

Published

May 21, 2014

On May 19, CMS released the Final Rule on policy changes to the Medicare Advantage (MA) and Medicare Part D programs for Contract Year (CY) 2015.

Consistent with their earlier rescission of major provisions of the proposed rule, including changes to the protected classes and preferred pharmacy networks, CMS is not finalizing more than 40 provisions from the proposed rule at this time. CMS is moving forward with provisions to include pharmacy price concessions in the negotiated price and to release additional Part D data. CMS also finalized a requirement for Part D plans to disclose and make more frequent updates on pharmacy pricing information. CMS signaled that they are likely to revisit some proposals in future rulemaking, such as the proposed expansion of medication therapy management (MTM) programs.

Although CMS did not finalize policies with the greatest impact to life science companies, notably changing the definition of protected classes and MTM program expansions, CMS signaled that they will revisit rulemaking on these policies in the future. CMS did, however, finalize a proposal clarifying cost sharing requirements for transition fills, which should improve access to needed medications during transition periods.

Health plans also benefit from CMS stepping back from a number of proposed policies, including limits on the number of Part D plans per region, new audit requirements, contract language on quality improvement, and limits on the use of medical record reviews. Additionally, CMS increased agent/broker compensation limits for renewals in response to concerns that the proposed policy would have discouraged agents from selling Medicare products. Plans will also appreciate CMS finalizing the proposal to permit rewards and incentive programs for beneficiaries.

Finally, pharmacies will likely benefit from a new requirement for plans to update their pharmacy reimbursement amounts every seven business days and disclose pricing in advance of use, beginning in 2016. However, CMS did not finalize policies related to plans’ preferred pharmacy arrangements, including the “any willing pharmacy” proposal or the proposed requirement that prices at preferred pharmacies consistently fall below prices at non-preferred pharmacies. CMS also did not finalize requirements for timeliness of fulfillment of prescriptions through mail order.

CMS plans to continue to study a number of policies that were not finalized from the proposed rule such as changes to the protected classes and MTM expansion and will undertake additional rulemaking to address these policies in the future.

View CMS’ final rule.

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