Medicare Part D

Many Medicare Enrollees Can’t Afford Cancer, Specialty Drugs

Large numbers of Medicare beneficiaries who are ineligible for low-income subsidies and have been prescribed high-price prescription drugs for conditions such as cancer don’t initiate their treatment, likely because they can’t afford it, according to new research published in Health Affairs. One of the study’s authors tells AIS Health that severe illness is a possible outcome of noninitiation in the studied clinical areas and adds that proposals under consideration in Congress to cap out-of-pocket spending for Medicare beneficiaries would make a big difference to the affected patients.

According to the paper, “among beneficiaries without subsidies, we observed noninitiation for 30 percent of prescriptions written for anticancer drugs, 22 percent for hepatitis C treatments, and more than 50 percent for disease-modifying therapies for either immune system disorders or hypercholesterolemia.”

Enforcement Actions Show Mounting CMPs from Financial Audits (with table: CMP Amounts Imposed on Medicare Advantage Insurers From February to April 2022)

Between February and April of this year, CMS imposed a total of nearly $1 million in civil monetary penalties (CMPs) on Medicare Advantage and Part D organizations for program violations uncovered during routine audits, including so-called “one-third financial audits.” While CMS has yet to release its annual report that provides a fuller picture of plan noncompliance, the latest round of CMP notices offers some important lessons for sponsors and flags a few potential areas of risk that they should be monitoring in their own operations, according to compliance experts.

Of the 15 CMP notices recently posted to the CMS Part C and Part D Enforcements Actions webpage, six resulted from 2021 program audits and eight were related to 2020 financial audits. Additionally, CMS imposed a fine on Anthem, Inc. for a Part D appeals violation stemming from a previously detected system migration issue that occurred in 2020.

Many Medicare Enrollees Can’t Afford Cancer, Specialty Drugs

Large numbers of Medicare beneficiaries who are ineligible for low-income subsidies and have been prescribed high-price prescription drugs for conditions such as cancer don’t initiate their treatment, likely because they can’t afford it, according to new research published in Health Affairs. One of the study’s authors tells AIS Health that severe illness is a possible outcome of noninitiation in the studied clinical areas and adds that proposals under consideration in Congress to cap out-of-pocket spending for Medicare beneficiaries would make a big difference to the affected patients.

According to the paper, “among beneficiaries without subsidies, we observed noninitiation for 30 percent of prescriptions written for anticancer drugs, 22 percent for hepatitis C treatments, and more than 50 percent for disease-modifying therapies for either immune system disorders or hypercholesterolemia.”

Part D Out-of-Pocket Cap: Limited Impact, Low Cost

A small share of Medicare Part D beneficiaries without access to the low-income subsidy (LIS) program would benefit from the introduction of a $2,000 out-of-pocket (OOP) spending cap for prescription drugs, a provision that is included in the Build Back Better Act, according to a recent Urban Institute analysis. In 2019, a $2,000 cap could have saved approximately 866,000 non-LIS Part D enrollees about $900 each, on average. There are 32.8 million total non-LIS enrollees in the Part D program. The cap would carry a small price tag, increasing total Part D expenditures by $782 million in 2019 and the premium across all Medicare beneficiaries by $4.35 annually. The study concluded that capping out-of-pocket costs for certain Part D beneficiaries would enhance the program without significantly raising costs.

Industry Trade Groups Sound Off About Proposed DIR Overhaul

The main health insurer and PBM trade groups are not fans of CMS’s proposal to reform the direct and indirect remuneration (DIR) system in Medicare Part D, judging by their recently submitted comment letters and interpretation of a recently published actuarial analysis.

The policy in question is part of the 2023 Medicare Advantage and Part D proposed rule, which CMS issued in January. Among a slew of other provisions, the agency is seeking to require part D plan sponsors to apply all price concessions that they receive from network pharmacies at the point of sale. Smaller pharmacies have long complained that the current system — in which Part D plan sponsors can recoup price concessions (i.e., DIR) from pharmacies for dispensed drugs if the pharmacies do not meet certain metrics — makes it difficult if not impossible to do business.

News Briefs: CMS Is Seeking Applicants for the 2023 MA VBID and Part D Senior Savings Models

CMS on March 1 issued a request for applications (RFA) for the 2023 Medicare Advantage Value-Based Insurance Design Model, which will include new elements such as a Health Equity Incubation Program that will encourage testing of interventions in “the most promising focus areas” (e.g., food insecurity) and designing best practices for such interventions. Thirty-four MA organizations are currently offering benefit packages that feature tailored VBID model benefits and rewards and incentives to more than 3.7 million enrollees, according to the model’s website. CMS on Feb. 28 also released an RFA from Medicare Part D sponsors and pharmaceutical manufacturers interested in participating in the 2023 Part D Senior Savings Model. Now in its third year, the insulin-focused model is intended to lower out-of-pocket costs for seniors by featuring “predictable” copayments of no more than $35 for a broad set of insulins. The voluntary model has 106 participants, including five manufacturers. CMS is accepting applications for the VBID model through April 15 and for the SSM through April 8.

Infographic: Out-of-Pocket Prescription Drug Costs Remain a Burden for Medicare Beneficiaries

Most older adults in the U.S. have been diagnosed with one or more chronic illnesses, and managing these conditions presents a significant cost burden, according to a January study in JAMA Internal Medicine. The authors studied eight of the most common chronic conditions, both as single disease states and in clusters, and determined hypothetical annual out-of-pocket (OOP) costs for individual seniors enrolled in Medicare Advantage-Prescription Drug plans and Standalone Part D plans in 2009 and 2019. While annual costs for many of the conditions dropped, likely due to the availability of new generic drugs, OOP costs for atrial fibrillation, type 2 diabetes and heart failure skyrocketed. This was attributed to the introduction of brand-name therapies without generic alternatives that received clinical guideline recommendations. To remedy this, study authors urged Congress to act on drug pricing reforms, including allowing Medicare to negotiate list prices and cap annual OOP costs for seniors.

Drug Pricing Remains Hot Topic, but Legislation Addressing It Has Stalled

While drug prices continue to be an issue of concern to many Americans, whether it can get any legislative traction issue remains unclear. So what might happen on the issue in 2022?

Dea Belazi, Pharm.D., M.P.H., president and CEO of AscellaHealth: Pharmaceutical drug pricing continues to be a contentious policy issue. Recent data has branded drug list prices growing annually by more than 9% over the last decade, which is much higher than gross domestic product (GDP) growth. However, a RAND study found that prices for unbranded generic drugs...are slightly lower in the United States than in most other nations. Additionally, patients’ out-of-pocket costs for specialty drugs have increased faster than GDP growth over the same period — 2.8% vs. 2.3%. Furthermore, the current White House administration and Congress have declared that reining in Medicare prescription drug costs to help older adults and people with disabilities is a top priority. This will put drug pricing in the crosshairs of elected officials, advocacy groups and patients.…

In Blow to PBMs, CMS Floats Reform of Part D Price Concessions

As part of a sweeping new Medicare Advantage rule, CMS recently proposed a policy aimed at reforming a reimbursement system that local pharmacies have long claimed is straining them to the breaking point. PBMs, on the other hand, argue that the proposal could hamper value-based contracting in Part D and potentially increase Medicare spending.

At issue are arrangements in which Part D plan sponsors can recoup money from pharmacies for dispensed drugs if the pharmacies do not meet certain metrics. Generally speaking, these payments to plan sponsors are known as price concessions, and when assessed retrospectively — as they currently are — they are counted as direct and indirect remuneration (DIR).

Sweeping Rule Raises Onus on MAOs, Seeks Pharmacy DIR Reform

CMS on Jan. 6 released a 360-page proposed rule largely aimed at increasing Medicare Advantage plan accountability and strengthening beneficiary protections, particularly for patients who are dually eligible for Medicare and Medicaid. As the first major MA and Part D rulemaking under the Biden administration, the proposed rule would reinstate several policies that were unwound by the Trump administration, such as the return of detailed reporting medical loss ratio (MLR) requirements and provider network reviews for new and expanding MA plans.

The proposed rule, Medicare Program; Contract Year 2023 Policy and Technical Changes to the Medicare Advantage and Medicare Prescription Drug Benefit Programs (87 Fed. Reg. 1842, Jan. 12, 2022), also revisits a Trump-era plan to reform pharmacy direct and indirect remuneration (DIR) — a topic that has long been a thorn in the side of community pharmacies. Specifically, CMS proposed to include all pharmacy price concessions — removing an exception for those that cannot be reasonably determined — at the point of sale in the definition of “negotiated price,” which is the primary basis for determining a beneficiary’s cost of obtaining a Part D covered drug.