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  • Washington Highlights

    CMS Finalizes Formulary Requirements for Medicare Advantage and Part D Plans

    Mary Mullaney, Director, Hospital Payment Policies

    The Centers for Medicare and Medicaid Services (CMS) May 16 issued a final rule allowing Medicare Advantage (MA) and Part D plans to utilize step therapy and prior authorization for drugs in six drug categories (“protected classes”) and for some Part B drugs [see Washington Highlights, Nov. 30, 2018]. The rule also includes the requirement for Part D plans to implement an electronic real-time benefit tool (RTBT) to make available beneficiary-specific drug coverage and cost information to prescribers. Plans will also be required to include negotiated drug pricing information on the Explanation of Benefits (EOB).

    MA and Part D plans will be permitted to utilize prior authorization and step therapy for beneficiaries initiating therapy (i.e., new starts) for all drugs within the protected classes except for antiretrovirals. CMS also finalized its policy to allow MA plans to implement step therapy for Part B drugs for beneficiaries initiating therapy; however, the decision must be reviewed and approved by the plan’s pharmacy and therapeutics committee. The timeline for appeals of a denial in these instances has been shortened to align with current Part D rules.

    Part D plans must adopt one or more RTBTs that are capable of integrating with at least one prescriber’s ePrescribing system or electronic health record no later than Jan. 1, 2021.

    Effective Jan. 1, 2021, CMS will require the Part D EOB include drug price increases and lower-cost therapeutic alternatives.

    Finally, Part D plans are prohibited from including in contracts the restriction on pharmacists’ ability to discuss with beneficiaries the availability of lower-cost drug options, otherwise known as the “gag clause.”