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Capitol Checkup: Medicare indication coverage; pre-existing conditions battle

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Capitol Checkup: Medicare indication coverage; pre-existing conditions battle

The Trump administration has yet to provide evidence to back up its claims that allowing Medicare Part D plans to limit coverage of a drug to only certain uses would expand beneficiaries' choices and lower their costs.

Opponents of the administration's move to indication-based coverage for Part D drugs are arguing that under the change, private insurers and the federal government, not a patient's doctor, would be making the decisions about a person's medical treatment.

It also is unclear whether the U.S. Centers for Medicare and Medicaid Services, or CMS, has the authority to make the change.

Part D plans are sold by private insurance companies to seniors and disabled Americans enrolled in the government's Medicare program. The plans cover prescription medicines sold at the pharmacy counter.

Currently, Medicare Part D plans are required to cover at least two drugs in each therapeutic class — medicines that treat the same disease or condition — according to the Pew Charitable Trusts.

For the so-called six protected classes — anticonvulsants, antidepressants, antineoplastics, antipsychotics, antiretrovirals and immunosuppressants — the plans are required to cover "all or substantially all" drugs.

But for other diseases, CMS told Part D plans that starting in 2020, they could employ indication-based formularies like other private-sector plans, meaning they may pay for only certain uses of a medicine rather than all approved by the U.S. Food and Drug Administration.

For instance, if a drug is approved to treat both Crohn's disease and plaque psoriasis, a Part D plan could choose to include only the latter indication on its formulary — the list of drugs covered.

Under current rules, if a Part D plan includes a particular drug on its formulary, the insurer must cover that medicine for every FDA-approved indication included in the product's labeling, according to CMS.

Giving Part D plans the ability to exclude medicines from their formulary based on their indication would provide insurers "additional negotiating leverage" with drugmakers, "which can ultimately reduce beneficiary and program costs," the agency said.

If Part D plans exclude any U.S.-approved indications, they must ensure there is another "therapeutically similar" drug on their formularies to treat the condition or disease to ensure they are meeting the anti-discrimination requirements, CMS said.

The agency, however, did not specify whether it considered "therapeutically similar" the same as "equal" in terms of efficacy and safety.

A CMS spokesperson told S&P Global Market Intelligence that the Trump administration's new policy "would not lead to an effective drug being replaced with an ineffective one."

Excluding certain indications may lead to some plans adding more drugs to their formularies they otherwise may have left off because of the expense of treating those eliminated conditions, the spokesperson said.

Allan Coukell, Pew's senior director of health programs, agreed.

"Allowing for indication-based coverage could result in some drugs not being available for some indications, but it could also result in drugs that aren't being covered now becoming available for higher-value uses," Coukell told S&P Global Market Intelligence.

But it is unclear whether those added drugs would make much of a difference to patients' lives, health policy expert Rachel Sachs, an associate professor of law at Washington University in St. Louis, told S&P Global Market Intelligence.

"I think there are a lot of unanswered questions," she said.

The two major lobbying groups representing brand-name drugmakers — the Pharmaceutical Research and Manufacturers of America and the Biotechnology Innovation Organization — said they were still reviewing the CMS memo.

"Overall, we believe that approaches to indication-based coverage must continue to support patient access to the medicines that best meet their needs, as well as support innovation, and that it is important to consider how any policy on indication-based coverage interacts with existing beneficiary protections and other structural aspects of the Part D program," PhRMA said.

BIO said it had no other comment, for the time being, on the matter.

But the American College of Rheumatology said the Trump administration's change would leave patients "completely unable to access treatments that doctors and patients choose together."

"It takes clinical decision making out of the hands of providers and puts insurance companies in control of patient treatment plans," the group stated.

The CMS spokesperson noted there is an exception, or appeals, process for Medicare beneficiaries whose Part D plans have excluded coverage for an indication a doctor has determined is medically necessary for treating the patient.

The spokesperson was unable to provide the anticipated cost to taxpayers for CMS' added work in reviewing Part D plans' claims that added drugs were therapeutically similar to medicines they planned to exclude.

Pre-existing conditions midterm battle

Senate Democrats last week offered up more evidence protections for pre-existing conditions will remain a key battleground issue for their party running up to the 2018 midterm elections in November.

The issue weighs heavy for Americans and was the top healthcare campaign concern for voters, cutting across all demographics, the nonpartisan, nonprofit Kaiser Family Foundation reported in late July.

Sen. Tammy Baldwin, D-Wis., led a group of 30 Democratic senators in introducing legislation aimed at blocking the Trump administration's short-term health plans — sometimes called "skimpy plans" or "junk insurance" by opponents — which they said fail to cover Americans with pre-existing conditions.

They said the Trump administration had rewritten the rules on pre-existing condition protections when it expanded short-term health plans on Aug. 1 from three months to 12.

The short-term plans will be able to set limits on how much they will pay for certain services or they could refuse outright to cover innovative cancer treatments or prescription drugs, noted Chris Hansen, president of the American Cancer Society Cancer Action Network.

Americans may be facing lower monthly insurance premiums but they also are likely to be left with inadequate coverage, Hansen said.

Pre-existing condition protections also are under threat from a lawsuit filed by a group of conservative state attorneys general being fought in a Texas federal court, where oral arguments are set to get underway on Sept. 5.

The lawsuit, which is challenging the constitutionality of the Affordable Care Act, could eventually end up at the Supreme Court.

According to the Kaiser poll, 64% of Americans who responded do not want the Supreme Court to overturn the ACA's protections for people with pre-existing conditions.

During a Capitol Hill hearing last month, CMS Administrator Seema Verma told senators that "if the law changes in some way, I would work with Congress to make sure that we had protections in place."

Given that the Democrats are not in control of the Senate, it is unlikely Baldwin's legislation will get any floor action, though introducing the measure allows their party to continue talking about the issue throughout the election season.

A group of Republican senators last month also unveiled their own legislation aimed to protecting patients with pre-existing from being discriminated against. But Kaiser Senior Vice President Larry Levitt said the bill was "something of a mirage," because it would still permit insurers to exclude paying for treatments and services associated with pre-existing conditions.

CMMI has the power

Meanwhile, former CMS Administrator Tom Scully told reporters last week it was highly unlikely healthcare legislation would move on Capitol Hill any time soon, given the partisan environment.

If any changes to the U.S. system were going to happen, they likely will be driven by CMS' Center for Medicare and Medicaid Innovation, or CMMI.

"CMMI has massive potential and massive powers," Scully said during an Aug. 31 forum hosted by the Alliance for Health Policy and APCO Worldwide.

"I do think we can change a lot in a positive way; that's why I took the role," CMMI Director Adam Boehler told reporters. "We look for the thread that you pull out that makes the difference."

The CMMI chief said he anticipated Health and Human Services Secretary Alex Azar to stick strictly to the Trump administration's plan outlined in May to lower drug prices.

"The blueprint is really indicative of what we are going to do," Boehler said.

He declined, however, to say whether the administration continued to believe it could move injectable medicines administered in a doctor's office or clinics covered under the Medicare Part B program to Part D without Congress' help.

Boehler also noted the administration was mulling over integrating assistance payments across government programs for housing, food and healthcare "into one view," though he declined to say whether CMMI planned any sorts of demonstration programs to test the idea.

"I don't want to get ahead of any announcements," he said.