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CMS Abandons Certain Controversial Provisions in its Proposed Medicare Part D Rule

Written by:  Theresa C. Carnegie

Following an onslaught of criticism, CMS told Congress today that it will not move forward with certain controversial provisions of its proposed rule on the Medicare Advantage and Medicare Part D prescription drug program.

In a letter to House Ways and Means Committee Ranking Member Sander Levin (D-MI), CMS Administrator Marilyn Tavenner stated that the agency will not finalize proposals to (i) lift the protected class definition of three drug classes, (ii) set standards on Medicare Part D plans’ requirements to participate in preferred pharmacy networks, (iii) reduce the number of Part D plans a sponsor may offer, and (iv) clarify the Part D non-interference provisions.  Tavenner states:

Given the complexities of these issues and stakeholder input, we do not plan to finalize these proposals at this time.  We will engage in further stakeholder input before advancing some or all of the changes in these areas in future years.

Since its issuance in January, the proposed rules have been sharply criticized by health care industry stakeholders and by members of Congress.  A coalition of more than 200 organizations representing health plans and various consumer and medical groups called on CMS to rescind the proposed rules based on concerns that the rule would reduce beneficiaries’ choice of plans and medicine and would lead to disruptions in care.  The House Energy and Commerce Health Subcommittee followed up with a hearing entitled “Messing with Success:  How CMS’ Attack on the Part D Program Will Increase Costs and Reduce Choices for Seniors.”  Various House and Senate Committee leaders have also called for the withdrawal of the proposed regulations.  Most recently, Congresswoman Renee Ellmers (R-NC) introduced legislation to block the proposed regulations.  The House of Representatives is scheduled to vote on the bill tomorrow.

Despite the announcement today, CMS does plan to finalize proposals related to consumer protections, anti-fraud provisions, and Part D data transparency.  The proposals rescinded by CMS’s letter are not the only controversial provisions in the proposed rule.  The rule expands plan audit and inspection authority, substantially changes RADV audits and appeals, revises the definitions of “negotiated prices” and “pharmacy price concessions," broadens application of prescription drug pricing standards to include MAC lists, and imposes new standards on mail order pharmacy arrangements.  Click here to read a full summary of the proposed rule.

Indeed, by last Friday’s deadline, CMS had received approximately 5,800 comments on the rule and few appeared to offer support.  Stakeholders will now have to wait and see how CMS addresses these comments in the final rule.

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Theresa advises clients on all aspects of the pharmaceutical supply chain. Her practice involves counseling industry stakeholders on a range of business, legal, transactional, and compliance matters.