The Medicare Payment Advisory Commission (MedPAC) an important advisory panel to congress, voted to back a package of changes to the Part D prescription drug program that according to MedPAC could save as much as $10 billion over five years. The post-acute proposal will be included in the commission's June report to Congress and would change the way Medicare reimburses skilled-nursing facilities, home health agencies, inpatient rehabilitation facilities and long-term-care hospitals. The proposal aims to establish rates according to specific patient conditions rather than care setting.
HHS would have until 2022 to develop an actual payment prototype, and MedPAC would need to weigh in on it by 2023. Congress has previously called upon MedPAC to develop a plan to pay the represented providers described above under one prospective payment system.
During discussion, commissioners raised tepid concerns with a few of the recommendations, despite ultimately supporting the recommendations in a unanimous fashion. Commissioners also emphasized the importance of having the Part D recommendations made as a "package," noting that several of the recommendations are essential to the success of others. For example, Commissioners noted that an improved exceptions and appeals process would be necessary to ameliorate concerns raised about the removal of antidepressants and immunosuppressants from the classes of clinical concern. Additionally, Commissioners cited several recommendations which will require active monitoring to measure the impact on plan sponsors and beneficiary access.
Despite the support of commissioners, providers expressed concerns, especially on the impact the model may have on patients' out-of-pocket costs. Co-pays currently depend on the post-acute-care setting.
The most controversial of MedPAC's suggestions was to limit which drugs would be a part of the protected class of Medicare Part D. Under the policy, a part D plan is required to cover all or substantially all drugs in six therapeutic classes: antiretrovirals, immunosuppressants when used to prevent organ rejection, antidepressants, antipsychotics, anticonvulsant agents and antineoplastics. MedPAC's recommendation is to remove antidepressants and immunosuppressants used to prevent transplant rejection from the list. MedPAC believes this will save money without affecting medication access by switching patients to generic options. But the exact amount saved and the potential number of people who would be impacted is unknown.
On one hand, beneficiaries might not be harmed by the proposal due to the variety of generics for both types of drugs. Providers and advocates argue that protected class status is necessary to guarantee under Medicare that patients have access to all immunosuppressive drugs. This is sometimes necessary if a physician needs to try a wide array of options. CMS tried this in 2012 and 2014, but Congress and stakeholders panned the idea.
Another controversial recommendation would reduce the reinsurance subsidy for Part D plans from 80% to 20%, while increasing what plans are paid upfront. By law, Medicare Part D subsidizes 74.5% of the expected cost of basic drug benefits, with enrollees paying the remainder through premiums. The subsidy is composed of two components: direct monthly subsidy payments and expected individual reinsurance payments to plans. MedPAC said the change would force plans to more diligently track their spending but one commissioner conceded it has not studied the impact of the proposal on smaller plan sponsors.
The Pharmaceutical Research and Manufacturers of America (PhRMA) issued a strong statement opposing the MedPAC recommendations after the meeting:
"PhRMA strongly opposes the sweeping new Medicare Part D recommendations approved by MedPAC earlier today. Taken together, these recommendations will significantly harm beneficiaries by eroding coverage and protections for some of the most vulnerable enrollees in the program. MedPAC's vote also ignores broad stakeholder concerns raised in response to these proposals.
"In particular, the recommendation to exclude manufacturer discounts in the coverage gap from enrollees' true out-of-pocket spending would in effect widen the coverage gap, increasing beneficiary out-of-pocket spending and hurting patients.
"MedPAC's decision to revisit its 2012 low-income subsidy copay recommendation is similarly misguided and would penalize low-income beneficiaries with a clinical need for brand medicines and could increase other health care costs by reducing adherence to prescribed treatment regimens.
"Finally, MedPAC's recommendation to remove antidepressants and immunosuppressants for transplant rejection from the classes of clinical concern in Part D was soundly rejected by a broad stakeholder coalition and bipartisan members of Congress two years ago. This recommendation would jeopardize access for beneficiaries with significant medical and prescription needs who live with mental illness or recently underwent an organ transplant."