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CMS Provides More Flexibility for Medicare Part D Plans On Prior Authorization and Step Therapy for Certain Drugs

Posted in Medicare and Medicaid, Private Insurers, Reimbursement Matters

The Centers for Medicare & Medicaid Services (CMS) published a final rule on Thursday, May 16, 2019 that provides, among other things, Medicare Part D plan sponsors with more flexibility to require prior authorization and step therapy for drugs in protected classes. The rule’s intended purpose is to allow Medicare health and drug plans more flexibility in their negotiations for lower drug price, in addition to reducing out-of-pocket costs for enrollees. However, of note, the rule scraped the idea to pass on price concessions negotiated by pharmacies to patients. CMS wanted to implement this policy in plan year 2020, but held off after receiving more than 4000 comments on the issue. Additionally, the final rule did not include CMS’s proposed plan to provide certain exceptions for Part D sponsors to reject a protected class drug because of a manufacturer price spike, or to reject a protected class drug if it embodies only a new formulation of an existing product.

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