Good news: Your out-of-pocket prescription drug costs under your Medicare Advantage plan may be coming down soon.
A recent change from the Center for Medicare Services (CMS) grants permission to Medicare Advantage plans to allow “step therapy” for Part B drugs. Essentially, this allows plans to start patients on lower-cost generics, where appropriate. Patients would still be able to move to costlier name-brand drugs on Part B medications where the generics are not effective.
Part B drugs differ from Part D drugs in that Part B treatments are delivered in health care facilities and for drugs administered in doctors’ offices, while Part D drugs are those that the consumer purchases from pharmacies. Step therapy has been routine for Part D plans for years, but has been prohibited for drugs administered in health care facilities.
The move by the CMS reverses a 2012 decision by the Health and Human Services Administration.
“By allowing Medicare Advantage plans to negotiate for physician-administered drugs like private-sector insurers already do, we can drive down prices for some of the most expensive drugs seniors use,” Health and Human Services Secretary Alex Azar said.
Big savings possible
According to health industry sources, the decision could save as much as 23% on immunology treatments including Remicade, Simponi and Stelera, and ultimately allow competing Medicare Advantage plans to offer premium reductions beginning in 2019.
The Health and Human Services Department notes that private medical insurance companies implementing step therapy realized savings of 15 to 20%. A portion of any savings realized would be redistributed to beneficiaries, likely via rewards programs, rebates and gift card programs.
“As soon as next year, drug prices can start coming down for many of the 20 million seniors on Medicare Advantage, with more than half of the savings going to patients,” Azar said. “Consumers will always retain the power to choose the plan that works for them: If they don’t like their plan, they don’t have to keep it.”
Step therapy for Part B drugs can begin on new prescriptions beginning in 2019. We’ll be monitoring Medicare Advantage prices as they adjust to the news and begin announcing their prices for 2019 and 2020.
Doctors’ groups have noted some potential downsides to the decision: Requiring patients to try generics first before authorizing brand name drugs could cause effective treatment delays, as the process requires patients to put off taking more effective chemotherapies or other drug regimens.
The CMS is restricting the step therapy directive to new prescriptions only. So, if you’re currently taking a more expensive brand name medication, you won’t have to stop taking your current drug in order to see if the generic is effective for you. You can keep taking your current medication.
However, if you develop a new medical condition, your Medical Advantage plan may need to start with a generic before your plan would authorize the more expensive drug.
If a physician believes that step therapy would be inappropriate and ineffective for a patient, and there is a medical necessity for the patient to proceed directly to a more expensive drug, bypassing the step therapy process, they are to use the appeal procedure established by the plan.
Not all plans will be participating in the step therapy program. If you want to switch to a Medicare Advantage plan that does or does not participate in step therapy, call us before or during the Medicare Advantage open enrollment period of October 15 to December 7. We’ll be able to help you assess your needs and choose the plan that’s best for you.
If you have any questions or would like to speak to a professional advisor, please contact ACBI Insurance at 203-259-7580.