CMS Announces Plan to Allow Drug Step Therapy for Part B in Medicare Advantage

The Centers for Medicare & Medicaid Services issued new guidance this week allowing step therapy in Medicare Advantage for physician-administered drugs. CMS says the proposed policy would give Medicare Advantage plans better leverage to negotiate drug prices, which would conceivably lower costs. The Academy, however, believes this is a legally questionable policy with a potentially dangerous effect in eye care.

This policy  has the potential to deny patients access to proven Food and Drug Administration-approved treatments, while removing physicians’ and patients’ treatment choices from care. It could even pit us against health plan representatives who would make the final say on treatment. 

Step therapy is a type of prior authorization for drug treatments. Treatment is required to begin with Medicare Advantage plans' most-preferred drug therapy, and physicians are allowed to select alternatives to the preferred drug only under defined circumstances. 

CMS’ authority on this issue comes with some limitations. Under the policy, Medicare Advantage plans would share half of the savings netted from step therapy with individual patients, in the form of a payment or gift card. 

Medicare Advantage plans would also need to couple such a policy with a drug management care coordinator program. Additionally, on-going Part B therapy could not be disrupted. No beneficiary currently receiving drugs would be required to change their medication. 

The policy change would take effect Jan. 1, 2019 as part of a Medicare Advantage patient-centered care program. However, the Academy believes that the challenges of implementing such a program before Medicare Advantage enrollment begins means few plans will be able to implement step therapy for 2019. 

Step therapy is already used by private payers, to questionable patient outcomes. But to adopt such a policy for nearly a third of Medicare’s patients is a major move that the Academy opposes. The Academy also questions the proposal’s legality. 

The Academy in 2014 argued successfully against step therapy’s legality. It was based on a 2012 CMS memo that concurred with our legal assessment. This week’s announcement rescinds the 2012 memo, leaving patients and physicians to challenge the legal authority for allowing step therapy under Medicare Advantage.