Proposed Medicare Advantage Changes Address Drug Pricing, ESRD

CMS has proposed changes to Medicare Advantage that will increase plans’ revenues by 0.93 percent. The proposed rule would extend Medicare Advantage eligibility to those diagnosed with end-stage renal disease (ESRD), lower cost-sharing on prescription drugs, and enforce greater transparency and comparability of out-of-pocket healthcare spending for different drugs. CMS also introduced measures to promote using generics and biosimilars.

“Whether you’re a senior dealing with kidney disease, living in a rural area, facing high costs because you need a specialty drug, or just want a better sense of what you’ll owe for prescription drugs, these new CMS proposals will improve your Medicare experience,” said HHS Secretary Alex Azar in the press release. “President Trump has been laser-focused on strengthening and protecting Medicare for our seniors, and these proposed improvements are the latest measures taken under the President’s Medicare executive order.”

The proposal requires Part D plans to provide an online price comparison tool that allows beneficiaries to see real-time prescription drug benefits and estimates. The tool will also include cost and prescription drug alternatives.

Medicare Advantage plans would enjoy more negotiating power in prescription drug pricing under the proposed rule. Plans would have the ability to offer a second “preferred” specialty tier with a competitive, lower price tag on certain specialty drugs.

In order to lower prescription drug prices, CMS aims to incentivize plans to use biosimilars and generics. With that in mind, CMS is seeking comment on the inclusion of generic and biosimilar utilization information in Medicare Advantage star ratings. 

Under the proposed rule, Part D plans would have to share pharmacy performance measures with CMS. This is in response to pharmacy complaints that current measures are unfair.

CMS also wants to add more weight to patient experience in the Medicare Advantage star ratings system, doubling the value of how a patient feels about their plan.

The proposed changes would also allow patients diagnosed with ESRD to access Medicare Advantage coverage. Currently, most patients with ESRD can only receive care through Medicare.

“In addition to giving those with kidney disease more choices, today’s proposals shed desperately needed light on previously obscured out of pocket costs for prescription drugs, “said CMS Administrator Seema Verma. “At the same time, it strengthens plans’ negotiating power with prescription drug manufacturers so American patients can get a better deal. The Trump Administration will stop at nothing to protect America’s seniors.”