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CMS to Allow Medicare Advantage Plans to Use Step Therapy for Medicare Part B Drugs

August 17, 2018

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PRESS CONTACTS
Mary Mullaney, Director, Hospital Payment Policies

The Centers for Medicare and Medicaid Services (CMS) announced Aug. 7 that Medicare Advantage (MA) plans will be able to apply step therapy for physician-administered drugs and other Medicare Part B drugs beginning Jan. 1, 2019. Step therapy is a utilization management tool that requires patients to try a less expensive drug before being given the drug that was prescribed.

This announcement rescinds guidance that prohibited mandatory step therapy for Part B drugs and services. CMS believes that by rescinding this prohibition, MA plans will have better leverage to negotiate lower prices on some Part B drugs.

CMS acknowledges that step therapy can be used to control the utilization of services. However, MA plans may not use step therapy to create an undue barrier to access for beneficiaries or deny coverage of medically necessary or emergency services. Step therapy for Part B drugs must be used in a manner similar to other requirements around prior authorization of Medicare Part C benefits and services and can only be applied to new prescriptions or administrations of Part B drugs and cannot disrupt ongoing Part B drug therapies. Furthermore, an MA plan remains subject to fee-for-service (FFS) Medicare’s step therapy policies and procedures when they are specified in a national and/or local coverage determination.

Medicare Advantage Prescription Drug (MAPD) plans may use step therapy to require a Part D drug therapy be tried prior to approving a Part B drug therapy. MAPD plans may also apply step therapy to require a Part B drug therapy prior to allowing a Part D drug therapy. Due to differences in cost-sharing between Part B and Part D drugs, CMS notes there may be times when beneficiaries experience higher out-of-pocket costs.

Plans that decide to apply step therapy to Part B drugs must offer beneficiaries an opportunity to participate in drug management care coordination activities. To encourage beneficiary engagement in these activities, MA plans may incentivize participation by offering items of value – such as gift cards – to all eligible enrollees.

MA plans that decide to use step therapy for Part B drugs will be required to disclose that Part B drugs may be subject to step therapy requirements in the plan’s Annual Notice of Change (ANOC) and Evidence of Coverage (EOC) documents sent to beneficiaries. Beneficiaries must be able to request an exemption from the plan’s step therapy requirements to access a Part B covered drug. CMS recommends that plans grant an exception whenever it is determined that the drug is medically necessary and is a covered Part B drug.

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