CMS Guidance 2018: Managing Part B Drugs (Part 3)

Donna Kerney Correia, PhDHealthcare Industry

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Part 2 of our 3 part series on the new CMS guidance for Part B drugs in Medicare Advantage (MA) plans revealed payers are taking a wait-and-see approach to implementation. As the current focus is on 2020 formulary development, MA plans will likely take additional time to consider their options before taking action.

The industry is buzzing

Every day it seems there is some news out of CMS or the administration about Medicare, prescription drugs and reducing healthcare costs. The CMS guidance issued in August represents only one aspect of the changes and efforts to promote flexibility for plans to improve quality and reduce costs. The administration anticipates that the guidance will give plans more leverage to negotiate with manufacturers to lower costs. The flexibility afforded by the ability to cross-manage Part B and Part D drugs means MA plans can broaden the scope of treatments for patients to use. How manufacturers plan to approach payers with potential contracting arrangements given this scenario remains to be seen.

What’s to consider

CMS has put forth “guidance,” leaving plans with both flexibility, and to some extent ambiguity, with regard to the practical execution of any changes in their programs. As MA plans move into 2019 (the guidance is effective 1/1/19), they will have a number of factors to consider as they work through any implementation.

  • Do they want to make any changes?
  • Which products/categories should they target first?
  • How can they get pharma to the negotiating table?
  • How do they structure a rewards incentive program to encourage enrollee participation?
  • What costs will be incurred with implementation?
  • What will be the impact (benefits and risks) for their enrollees?
  • How do we communicate with the parties involved (providers, members, pharma, CMS)?

These are just a few of the broad areas that plans need to think about before making any decisions.

Payer and manufacturer interactions

Plans and manufacturers are used to the processes and negotiations for Part D drugs. Plans will need to decide whether they will use their Part D P&T Committees for review of Part B drugs for purposes of implementing step edits, or whether a new process or committee will be created. Manufacturers also have to think about how they position their products with payers in light of the guidance.

At a minimum, the dynamics in the coming year between payers and manufacturers with Part B (and Part D) drugs will be interesting. Connect with us and share your thoughts by contacting us at

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