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CMS Allows Step Therapy Under Medicare Advantage Plans

The Centers for Medicare and Medicaid Services (“CMS”) recently announced that, starting next year, Medicare Advantage (“MA”) plans will be allowed to require step therapy on Part B drugs and other physician-administered drugs. Step therapy requires patients to take generic medication as their initial treatment, and only when that treatment is proven to be ineffective, they may step up to more expensive drugs. The point of step therapy is to incentivize drug makers to have the cheapest generic drugs, which will save Medicare money. Step therapy has already been implemented with Medicare Part D drugs, which are drugs from pharmacies, and has proven to be relatively effective in getting drug manufacturers to lower drug prices.

Previously, MA plans were not allowed to implement step therapy for Part B drugs because the Obama administration interpreted federal regulations such that MA plans could not be more restrictive than Medicare, and MA plans could not impose barriers to Part B services that were not in place for Medicare. Although the step therapy policy may pose significant benefits for MA plans, there are concerns about how it will impact patient care.

Requiring healthcare providers to prescribe generic medication to their patients first takes away the providers’ medical decision-making abilities and can slow down the healing process for the patients taking the drugs. The majority of individuals taking Part B drugs are those with chronic or serious ailments. Common Part B drugs include: chemotherapy, autoimmune drugs, oral drugs for kidney disease, and vaccines. Providers are concerned that some patients may have to undergo treatment with less effective generic drugs before being able to be treated with effective non-generic drugs. However, some individuals believe that the FDA would not approve a generic if it were less effective than the non-generic. Regardless, this is where trouble could arise – some patients do not have enough time to wait out multiple therapies and must have the most effective therapies first, such as patients with cancer or rheumatoid arthritis. There will likely be more medical emergencies if patients are administered non-effective generic drug and their condition needs immediate improvement from the medication to avoid harm.

CMS contends that having step therapy will actually be a relief for patients, since they will not have to worry about whether or not their medication is covered by Medicare. Patients can usually be certain that Medicare will cover the cost of generic drugs.

Furthermore, beneficiaries may ask their MA plan for an expedited exception if they need the non-generic drug immediately, rather than having to wait for the initial treatment to fail. If the MA plan denies the request for an exception, the beneficiary has the right to appeal that decision. Also, step therapy will only be applied to new prescriptions, so patients who are currently undergoing treatment with one particular medicine will not have to switch to the generic as a result of this policy. Wachler & Associates will continue to stay up to date with the effects from the implementation of step therapy with Part B drugs. We have the expertise and the dedication to aid you or your healthcare provider in remaining compliant with the changes to MA plans. Furthermore, if you or your healthcare entity has any questions pertaining to healthcare compliance, please contact an experienced healthcare attorney at (248) 544-0888, or via email at wapc@wachler.com. You may also subscribe to our health law blog by adding your email at the top right of this page.