CMS Indicates Select Controversial Part D Proposals Will Not Be Finalized


Acknowledging concerns regarding some proposals in the January 2014 proposed rule for the Medicare Advantage and Part D Programs, the Centers for Medicare & Medicaid Services states it does “not plan to finalize” certain proposals at this time.

In Depth

In a rare, if not unprecedented step, Marilyn Tavenner, Administrator for the Centers for Medicare & Medicaid Services (CMS) announced in a March 10, 2014, letter to Rep. Henry Waxman (D-Calif.) that the agency “do[es] not plan to finalize” several controversial proposals aimed at changing the Medicare Prescription Drug (Part D) Program that were part of CMS’ January 10, 2014, Medicare Advantage (MA) and Part D proposed regulation (the Proposed Rule). The letter was issued on the first business day after the close of the Proposed Rule’s comment period, during which the agency received more than 7,000 comments. It also comes amidst intense and increasing pressure from various members of Congress and industry stakeholders.

Specifically, CMS’ letter states that it “received numerous concerns” regarding proposals to:

  • Lift the “protected class” status for three of six drug classes—immunosuppressants, antidepressants and antipsychotics—currently enjoying this regulatory protection;
  • Set standards on Part D Plan requirements for participation in preferred pharmacy network;
  • Reduce the number of Part D Plans a Part D Plan Sponsor may offer; and
  • “Clarify” the agency’s interpretation of the statutory non-interference provision

CMS, therefore, does not plan to finalize “these proposals at this time” and will “engage in further stakeholder input before advancing some or all of the changes in these areas in future years.”

(For a more in-depth description and analysis of these proposals, see our January 23, 2014, On the Subject, “CMS Proposes Significant Changes to Medicare Part D Program’s Administration”.)

Administrator Tavenner’s letter leaves unanswered, however, numerous questions regarding the agency’s plans for the Proposed Rule. For example, the letter’s phrase “preferred pharmacy network” is ambiguous, so it is unclear whether the reference includes the “any willing pharmacy” proposals, which some had taken to calling the “any willing preferred pharmacy” proposals. Similarly, it is unclear whether CMS intends to move forward with its proposals regarding pharmacy price concessions and the revised definition of “negotiated price.”These provisions are considered by some to be directly related to the non-interference proposal and the preferred pharmacy networks, even though the proposals are set out in different sections of the Proposed Rule. It also remains unclear what effect, if any, Administrator Tavenner’s letter may have on the proposal set forth in the February 21, 2014, Draft MA and Part D Call Letter regarding network adequacy requirements for preferred pharmacy cost-sharing access.

CMS indicates its intention to finalize proposals related to consumer protections (e.g., ensuring access to care during natural disasters), anti-fraud provisions (e.g., strengthening qualification standards for prescribers) and transparency (e.g., broadening the release of Part D data). The letter is silent on other Part D proposals that garnered significant attention, such as the agency’s proposal to modify the criteria for Medicare beneficiaries’ eligibility to participate in Medication Therapy Management Programs, thus expanding the scope of these programs, and provisions applicable to the MA and Part D Programs, such as the proposal to shift to MA Organizations and Part D Plan Sponsors the responsibility—and costs—of performance audits.

Comments on the Proposed Rule were due March 7, 2014. CMS is expected to release the final regulation sometime in Spring 2014, in advance of the June 2, 2014, deadline for submitting bids for the 2015 benefit year.