Trump Administration Announces Changes to Medicare Advantage

The Centers for Medicare and Medicaid Services (CMS) has announced it will allow Medicare Advantage plans to implement “step therapy” for drugs covered by Medicare Parts B and D. Under the proposed changes, plans will be permitted to require patients to attempt a less expensive treatment option before they can be prescribed a more expensive one.

Medicare Advantage plans, administered by private health insurers, currently cover medical benefits for 20 million seniors. Typically, drugs covered under Medicare Part B are more expensive and are administered by physicians, while those covered under Part D are cheaper and are available in pharmacies. Under the new policy, Medicare Advantage plans may require patients to try a Part D therapy prior to allowing a Part B therapy; they also may require that a cheaper Part B therapy is used before a more expensive Part B therapy.

According to CMS Administrator Seema Verma, MPH, the new step-therapy policy will help lower prescription drug costs by offering Medicare an opportunity to negotiate better deals for patients. “It may help [Medicare Advantage plans] negotiate better discounts, encourage drugmakers to lower costs, and encourage patients to choose high value medications,” she said.

Patient advocacy groups expressed skepticism that step-therapy policies would protect the interests of patients. Ellen Albritton, a policy analyst at Families USA, argued that CMS “is putting up more barriers between patients and the drugs they need to stay healthy and live.”

Others warned that the policy could have a negative impact on patients with chronic health conditions. “[Patients with cancer] should not be forced to ‘fail first’ on a drug that is known not to work for them before they are allowed to take the recommended treatment,” argued Chris Hansen, president of the American Cancer Society Cancer Action Network.

Drug manufacturers also voiced their opposition. The Pharmaceutical Research and Manufacturers of America (PhRMA) said it has “serious concerns” with the new policy, arguing that the program would only delay access to needed medicines.

At least one advocacy group, though, supported the changes. “I understand [the concerns] because I have a disease that will kill me if not treated correctly,” said David Mitchell, president of Patients for Affordable Drugs. “But if science says drugs are equally effective, I’m OK starting with the cheaper one.”

Source: CMS memo, August 7, 2018; Reuters, August 7, 2018; The Hill, August 9, 2018.

SHARE