CMS Permits Medicare Part B to impose step therapy on new starts

The Centers for Medicare and Medicaid Services (“CMS”) announced a final rule permitting Medicare Part B plans, including those administered through Medicare Advantage, to impose step therapy on new starts of Part B drugs. CMS noted that this utilization management tool will “ensure that Medicare beneficiaries pay less overall … for Part B drugs.” CMS expects this final rule will result in an aggregate savings of $62 million over 10 years.

Medicare Part B plans provide Medicare beneficiaries with coverage for doctor services and outpatient care. Medicare Part B also provides coverage for a limited number of outpatient drugs, such as those administered at a doctor’s office or in a hospital outpatient setting. In addition to permitting step therapy, the final rule imposes protections for patients who are subject to the new step therapy requirements. As noted, Part B beneficiaries who are actively taking the Part B drug are exempt from the step therapy requirement. The final rule also implements a 365-day lookback period to determine if the beneficiary is actively taking the drug in question, or if the new start step therapy rule should be implemented. This 365-day lookback period in the final rule was extended from the proposed rule 108-day period.

The final rule also provides for a Pharmacy and Therapeutics (“P&T”) Committee which will be composed of a majority of members who are practicing physicians and pharmacists. The role of the P&T Committee is to “ensure that step therapy policies are clinically appropriate and do not impede access to medically necessary care.” In addition, the final rule requires that plans must respond to a beneficiary’s request for coverage, or to an appeal of a denial of such a request, within 24-72 hours.

The Part B step therapy requirement has gotten a lot of attention from the American College of Rheumatology (“ACR”), which includes step therapy as one of its active advocacy platforms. The ACR opposes utilization management strategies “based solely on cost instead of medical value,” and notes that such strategies are often inappropriate and “compromise safety and quality of care.” Regarding the final rule, ACR notes that they are pleased with the extension of the lookback period to 365 days, as the shorter proposed 108-day lookback period would have put many rheumatology patients “at risk for having to go through step therapy all over again.” However, ACR indicated that CMS needs to increase monitoring of Medicare Part B plan’s implementation of utilization management practices. ACR also notes that CMS should require utilization review entities to provide detailed explanations for prior authorization denials or denials of step therapy override.

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