CMS Guidance 2018: Managing Part B Drugs (Part 1)

Donna Kerney Correia, PhDHealthcare Industry

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In 2012, CMS published guidance which prohibited mandatory step therapy for Part B drugs and services. On August 7, 2018, CMS published new guidance that rescinded the 2012 guidance and states that beginning 1/1/19, Medicare Advantage (MA) plans will be permitted to use step therapy (ST) for Part B drugs as part of a patient-centered care coordination program that includes patient rewards and incentives. The goal of this guidance according to CMS is to reduce costs and improve health outcomes for patients.

It’s very early and not entirely clear

The CMS guidance was just released. To say it is in its infancy is an understatement. MA plan sponsors are still digesting the language and deciphering its implications for their organizations and plan members.

While at its core, the guidance is clear – that Step Therapy can now be applied to Part B drugs within the parameters outlined – the implementation of new policies and processes that take advantage of the new guidance is much more complex for plan sponsors. CMS provides no specifics on the practical application of the guidance, only broad general statements about keeping in line with selected regulations and complying with national and/or local coverage determinations.

Another added layer of the guidance involves the use of rewards for enrollees. MA plans may offer rewards/incentives to enrollees in exchange for their participation in these plans and the associated care coordination activities. The incentives can be in the form of gift cards (no cash or monetary rebates are permitted) or other items of “reasonable and appropriate” value. According to the CMS, this means “that the reward or incentive is reasonable and appropriate if it is equivalent to more than half the amount saved on average per participant by more efficient use of health care resources, promotion of improved health, or prevention of injuries and illness.” And furthermore, the plan is required to report these reward amounts “to CMS on a per-member basis in comparison to the average planned per participant savings in the annual Part C Reporting Requirements submission.” The specifics for calculation of those savings vs. rewards are not outlined in the guidance.

A few things to consider

  • Part D and Part B drugs can be stepped through each other
    • The guidance permits MA plans to use ST to require use of a Part D drug prior to use of a Part B drug (and vice versa) as long as the cost to the enrollee is not increased
    • How will that be managed given payers lack of integration of data for Part B and Part D covered drugs?
  • P&T Committees are already overburdened
    • How will the P&T Committees handle the added review of Part B drugs for consideration of ST?
    • Will this delay reviews and decisions on Part D drugs, and in turn potential contract negotiations and formulary reimbursement discussions?
  • Rewards/incentives are undefined
    • How are plans determining the “reasonable and appropriate” reward amounts?
    • Will CMS require insight or eventually define the calculations?
  • PBMs manage Part D, but Part B drugs
    • How will the Part B drug management work with PBMs?
    • Will integration result in increased cost to the system overall?

There is more to come

As plan sponsors weigh their options for implementation of ST in Part B and the impact of those decisions both financially and clinically, manufacturers will be considering their market access strategies in Medicare. Changes will be needed. But whether plans and manufacturers can make adjustments for 2019 – or delay until 2020 – remains to be seen. Stay connected with us and keep an eye out for Part 2 of our series on this guidance as we learn more about the payers’ perspectives. Share your insights and comments by contacting us at

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