On August 7, 2018, the Centers for Medicare & Medicaid Services (CMS) announced it will provide Medicare Advantage plans the option of applying step therapy for physician-administered and other Part B drugs. Medicare Advantage (MA) plans will have the choice of implementing step therapy to manage Part B drugs, beginning January 1, 2019 as part of broader care coordination activities.
Step Therapy Specifics
The agency rescinded guidance that was issued in September 2012 prohibiting step therapy. If a Medicare Advantage Organization (MAO) chooses to take advantage of this option, it must offer and encourage enrollees to participate in a drug management care coordination program. Enrollees who choose to participate in such a program must receive rewards and incentives from the MAO equal in value to at least half of the planned per participant savings from the program.
CMS explained that its new guidance is based on Section 1852 of the Social Security Act, which allows MAOs to implement utilization management tools. In its 2012 guidance, the agency stated that it interpreted its regulations under 42 CFR 422.101 to prohibit step therapy for Part B drugs unless such step therapy was specifically permitted under a national coverage determination (NCD) or a local coverage determination (LCD). In the recently released guidance, based on the agency’s statutory interpretation, CMS now advises MAOs that step therapy is permitted for Part B drugs where the NCD or LCD is silent on the use of step therapy.
Additionally, MAOs offering both Part C and Part D (MAPDs) benefits may also use step therapy to require Part D therapy before Part B therapy or vice versa. MAPDs are also encouraged to use their pharmacy and therapeutics committees to determine when use of step therapy for Part B drugs is medically appropriate.
MAOs must further disclose that Part B drugs may be subjected to step therapy requirements in Annual Notice of Change and Evidence of Coverage documents. CMS reminded MAOs that any step therapy measure for Part B drugs should not result in increased costs to beneficiaries, that MA plans must provide access to all Part A and Part B benefits, and that beneficiaries must be able to request an exception from a step therapy requirement for a Part B drug. Additionally, MAOs may only apply step therapy to new prescriptions and may not interrupt ongoing drug therapies with step therapy requirements.
Responses
As has been reported, the response from the industry and advocacy groups has been mixed so far. The Pharmaceutical Care Management Association called the shift in policy “an important step toward reducing costs for the [Medicare] program and beneficiaries.” However, the American Cancer Society Cancer Action Network stated that step therapy “can create an extra hurdle for cancer patients to go through before getting the appropriate drug they need” and that “cancer patients 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.” Moreover, in a statement to Politico, PhRMA expressed “serious concerns with the new CMS guidance regarding Medicare Advantage coverage of Part B medicines and the implications for patients suffering from complex conditions.”