CMS suggests public payer weight loss drug coverage changes

A new CMS proposal seeks to ease Medicare Advantage members' access to weight loss drugs, according to a CMS press release. The proposed rule also addresses a couple of other issues in the Medicare Advantage space, such as transparency and prior authorizations.

Medicare Part D includes a statutory exclusion for drugs when they are used for weight loss, CMS shared in a fact sheet on the proposed rule. However, there is precedence at CMS for ignoring an exclusion if the drug is being used to treat a specific disease. This proposed rule would seek to recognize obesity as a disease that qualifies Medicare beneficiaries, Part D beneficiaries and Medicaid enrollees for coverage of weight loss drugs.

For Medicaid enrollees, anti-obesity medications would be considered covered outpatient drugs.

"CMS now proposes to reinterpret the statute to permit coverage of anti-obesity medications for the treatment of obesity when such drugs are indicated to reduce excess body weight and maintain weight reduction long-term for individuals with obesity," the agency explained in the press release.

The agency distinguished between obesity and overweight conditions in the fact sheet. Weight loss drugs for individuals who are overweight but not obese would not be covered under the new rule.

Additionally, CMS suggested policies around the use of AI in Medicare Advantage spaces, which has been a hot-button issue in 2023 and 2024. Major payers have been accused of using AI tools to increase claim denials. In light of these controversies, the proposed rule would require Medicare Advantage health plans to confirm that their use of AI upholds health equity.

Medicare Advantage prior authorizations and utilization management have become another charged topic in recent years, as provider organizations and researchers have claimed Medicare Advantage plans use prior authorization tools to deny medically necessary claims.

CMS would require utilization management to be considered as part of internal coverage criteria and subject to the same transparency and appeals regulations. The agency also used the proposed rule to clarify certain aspects of previous legislation around prior authorizations and appeals processes, detailed in the fact sheet.

The rule would update the medical loss ratio (MLR) reporting requirements for Medicare Advantage and Medicare Part D plans.

Medicare Advantage plans would have to demonstrate that value-based care arrangements are in place to be included in the MLR process. Plans would not be able to include administrative costs and would have to provide additional information in the case of vertical integration or different payment arrangements. CMS also introduced regulations around auditing.

On top of these adjustments, the agency included changes to the Medicare Plan Finder provider directories, agent and broker requirements, debit card usage, generics' and biosimilars' placement in formularies and more.

Kelsey Waddill is a managing editor of Healthcare Payers and multimedia manager at Xtelligent Healthcare. She has covered health insurance news since 2019.