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CMS Memos Signal Significant Changes for MA & Part D Plans

Blair Burnett, Senior Policy Analyst, <em>ACCC</em>, and Asha Ahmed, State Policy Coordinator, <em>ACCC</em>

September 7, 2018
Pills spilled onto medicare card and money

Nearly four months have passed since the Trump Administration released its blueprint for lowering drug prices. In the intervening time, there has been scrutiny of administration discussion on implementation of various proposals outlined in the plan. Most recently, during the month of August the Centers for Medicare & Medicaid Services (CMS) used its authority to the fullest, releasing two policy memos that could significantly alter access to care under Medicare Part B and Medicare Part D:

On Tuesday, August 7, a CMS memo announced newly issued guidance that would allow Medicare Advantage (MA) plans to use step therapy for Part B drugs beginning January 1, 2019. This change comes after an earlier CMS decision to annul the September 17, 2012, Health Plan Management System (HPMS) memo stating that “plans were precluded from imposing additional requirements for access to certain Part B drugs or services, such as step therapy requirements.”

Top-level takeaways from the August 7, CMS memo include: 

  • The agency intends to treat step therapy for Part B drugs in a similar manner to other requirements around prior authorization of Part D benefits and services and will consider rulemaking related to step therapy that might be appropriate for 2020 and future years.


  • MA plans may put their own step therapy policies and procedures into practice as part of utilization management so long as no applicable national and/or local coverage determination exists.
  • CMS strongly encourages that MA Advantage plans with prescription drug coverage (or, MAPD plans) use their qualified Part D pharmacy and therapeutics (P&T) committees to determine when it is medically appropriate to use step therapy for selected drugs in Part B.


  • MA plans opting to apply step therapy must offer beneficiaries an opportunity to participate in drug management care coordination activities in addition to incentives in exchange for enrollee participation.


  • CMS acknowledges that variances in cost-sharing for Part B and Part D drugs may, on occasion, cause beneficiaries to see an increase in out-of-pocket costs for “stepped” Part D drugs.


  • The agency does not anticipate increased costs to enrollees for step therapy for Part B drugs and other utilization management practices.

In response to the CMS August 7 memo, ACCC joined in the Part B Access for Seniors and Physicians (ASP) coalition letter to CMS urging the agency to rethink this change in policy for MA plans and to engage in dialogue with stakeholders on the issues raised by change.

On Wednesday August 29, 2018, CMS issued a memo to Medicare Part D (prescription drug benefit) plans. The memo states that starting in 2020, the agency will allow Part D plans to implement “indication-based formulary design.” Under current Medicare policy if a Part D plan includes a specific drug on its formulary, the plan must cover that drug for every FDA-approved indication, or patient condition, even if the plan would otherwise instead cover a different drug for an indication. Under the new guidance, if a Part D plan limits formulary coverage of a drug to certain indications, the plan must ensure that there are other therapeutically similar drugs on formulary for the drug’s non-covered indications.

This policy decision directly mirrors a proposal within the Trump Administration’s drug pricing reform blueprint. Health policy analysts and industry experts are concerned that indication-based pricing could lead to higher prices for certain high-value drugs. Contrary to CMS claims, some stakeholders worry changes will restrict patient access to certain medications and complications that could arise from the way in which CMS will implement the changes—allowing plans to solely include/exclude an indication or tiering by indication.

ACCC is concerned about the impact of both proposals for cancer patients accessing care across the country. The ACCC Policy Team is continuing to analyze the policy changes described in both the Prior Authorization and Step Therapy for Part B Drugs in Medicare Advantage and the Indication-Based Formulary Design Beginning in Contract Year (CY) 2020 memos and how they will impact ACCC cancer programs and their patients.


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