Jan. 7—Medicare would reduce an incentive for preferred pharmacies as part of the proposed rule for the Part D program's 2015 contract year.

The proposed rule from the Centers for Medicare & Medicaid Services (CMS) would redefine negotiated prices to require all price concessions from pharmacies to be reflected in negotiated prices. The change aims to require greater cost savings for beneficiaries in return for offering preferred cost sharing. Medicare officials hope the change will reduce the incentives that drug plans use to steer enrollees to selected pharmacies, "including the sponsors' own related-party pharmacies that charge higher rates than their competitors," according to a CMS fact sheet. 

Drug plans provide incentives for enrollees to utilize preferred pharmacies, which usually charge a lower negotiated rate to the drug plan.

The proposed CMS change came amid rapid growth in the use of preferred pharmacies by Medicare drug plans as a cost-savings tool. In 2014, 72 percent of the nearly 1,200 regional prescription drug plans (PDP) have a preferred network, according to a plan analysis by drugchannels.net.

Local pharmacies have complained that the growth of preferred pharmacy networks has hurt Medicare beneficiaries' access to medications.

Other Provisions Proposed

Another provision of the proposed rule would greatly expand the medication therapy management (MTM) program, which uses patient-specific information to assess patients' health problems and prescribed medications to create a plan for better treating those conditions.

The rule would broaden the MTM criteria to require that drug plans target for inclusion beneficiaries with two or more chronic diseases—up from three chronic conditions required now. The changes would increase the estimated number of participating beneficiaries from 2.5 million to 18 million, at a cost of $111 million.

Other provisions of the proposed rule includes adding two classes of drugs to the categories of medications for which Part D plans are required to provide coverage for "all or substantially all" specific pharmaceuticals. The proposed rule would require formulary inclusion of all drugs within the antineoplastic, anticonvulsant, and antiretroviral drug classes (subject to proposed exceptions), while dropping the required inclusion of all drugs from the antidepressant and immunosuppressant drug classes. Antipsychotics will remain on the inclusion list at least through 2015 while CMS evaluates continues to evaluate whether to drop them.

CMS also proposed limiting drug insurers to two Part D plans in the same service area. Additionally, the proposed rule would prohibit plan sellers from offering new plans that simply replace plans CMS has required to be terminated or consolidated due to low enrollment.

The new rule also proposed requiring Medicare enrollment for physicians and non-physician practitioners who write prescriptions for covered Part D drugs.

Publication Date: Tuesday, January 07, 2014