Keeping you updated on the latest Medicare and Part D news

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CMS Press Release: Since Affordable Care Act, 7.9 Million People With Medicare Have Saved Over $9.9 billion On Prescription Drugs

Press Release


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FDA Releases Draft Guidance On Use of Scientific and Medical Literature for Drug Promotion

The new FDA guidance on the use of scientific and medical literature to promote drug products enters a grey area between upholding the First Amendment right to free speech and ensuring drug safety. The FDA already regulates company-sponsored or generated studies that include information that has not been specifically approved by the FDA or fail to meet scientific standards. However, when rigorously-conducted, independent studies that are driven by scientific rather than promotional purposes recommend drug uses that are not approved by the FDA, should companies be allowed to distribute them? The FDA’s guidance outlines what qualifies as independent and scientifically sound literature, and what sort of disclosures companies should include when distributing such literature.


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Update on Medicare’s Sustainable Growth Rate

The bipartisan proposal to replace the Sustainable Growth Rate with a 0.5% annual increase for Medicare physicians, as discussed in a previous blog post, passed in the House last Friday but is very unlikely to become law.  The bill, which would eliminate the impending 24% cut to Medicare physician payments on April 1st, would cost an estimated $138 billion according to the Congressional Budget Office (CBO). To offset this cost, House Republicans proposed delaying the Affordable Care Act’s individual mandate by five years. This is unlikely to pass in the Senate, and the Obama Administration has already announced that the bill, with its current funding mechanism, would be vetoed.

The Senate has its own version of the bill, but it does not provide a funding mechanism. The CBO estimates that the Senate version would cost about $180 billion. The Senate bill is costlier because it includes funding to expiring programs for rural hospitals.

Congress has until March 31st to stave off the 24% cuts, which would have serious consequences on the willingness of physicians to participate in Medicare.


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Pharmaceutical Companies Cut Spending on Promotional Activities By Doctors

ProPublica’s “Dollars for Docs” projects found a dramatic decrease in payments to doctors between 2011 and 2012 among some of the nation’s largest pharmaceutical companies. Furthermore, GlaxoSmithKline announced it would stop paying doctors to promote drugs altogether last December. This decline coincides with increased scrutiny from regulators and watchdog organizations. Per the Physician Payments Sunshine Act, all pharmaceutical and medical device companies must disclose payments to physicians. The first wave of disclosures, expected September 2014, will cover the payments made between August and December 2013. Another potential cause of this decline is the expiration of patent protection for several blockbuster drugs between 2011 and 2013. Moreover, pharmaceutical industry has changed its focus towards expensive specialty drugs, which likely require less promotion from doctors. 


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OIG Finds That More Than Half of Part D Plan Sponsors Not Reporting Fraud and Abuse

The Office of Inspector General reviewed Part D sponsor-reported data on fraud and abuse between 2010 and 2012, 64,135 incidents in total, and published the following findings:

  • more than half of sponsors did not report data on potential fraud and abuse
  • of the sponsors that reported data, more than one-third did not identify any potential fraud or abuse in at least one of the reporting years
  • sponsor identification of potential fraud and abuse varied greatly, from 0 to almost 14,000 incidents a year
  • though CMS requires sponsors to investigate and undertake corrective actions, 28 percent of Part D sponsors reported performing no inquiries or corrective actions regarding potential fraud and abuse
  • CMS did not perform quality assurance checks on sponsor reported data or use the data to monitor the Part D program

The OIG recommended that CMS specifically require sponsors to report potential fraud and abuse to CMS and provide guidelines on how sponsors should report incidents. Furthermore, potential fraud and abuse data should be shared with all Part D sponsors and law enforcement to better identify fraud schemes. CMS responded saying that guidance was already provided to sponsors on how to report incidents, and that requiring sponsors to report incidents to CMS would be redundant since a contractor already collects this information. Also, CMS already provides data to law enforcement upon request and works with law enforcement in quarterly Fraud Work Group meetings. The OIG also recommended that CMS investigate the large variations in the number of incidents reported by sponsors, to which CMS fully agreed.

OIG Study

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Physicians Leading Source of Prescription Opioids for High-Risk Users

In a study released last week, CDC researchers analyzed data spanning 2008 to 2011 from the Substance Abuse and Mental Health Services Administration’s (SAMHSA) National Survey on Drug Use and Health (NSDUH), focusing on frequent non-medical opioid users. The CDC defined the population with the highest risk of opioid overdose as those who use prescription opioids non-medically 200 or more days a year. Within this group, people obtained opioids through their own prescriptions 27 percent of the time. Other major sources of opioids for non-medical users include receiving free opioids from friends or relatives (26 percent), buying from friends and relatives (23 percent), and buying from drug dealers (15 percent).

These findings call for a multi-prong approach to prevent opioid abuse. Law enforcement and prescription take-back programs can only address part of the problem; health care providers need to monitor opioid users and prescribers for potential abuse and take action against inappropriate prescribing.


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Update: Controversial Proposed Changes to Medicare Part D Withdrawn

3/10/2014 update: (Reuters) – The Obama administration on Monday told members of Congress that it will not finalize controversial changes to the Medicare Part D prescription drug benefits program “at this time,” following weeks of growing opposition to the proposals from a broad coalition of interests.

U.S. Centers for Medicare and Medicaid Services(CMS) Administrator Marilyn Tavenner said in a letter to lawmakers that her agency will instead seek new input from stakeholders before advancing some or all of the changes “in future years.”

The controversial changes included new rules governing the establishment of preferred pharmacy networks that would have allowed more pharmacies to gain preferred status, and increased CMS authority to get involved in negotiations between pharmacies and Part D plans. Critics argued that increased regulation would lead to rising drug costs and premiums for beneficiaries.

Original Post 3/3/2014: Growing Opposition to CMS’ Proposed Changes to Part D

The 60-day comment period for CMS’ proposed changes to Part D is coming to a close on March 7th, and critics in government and the healthcare industry are speaking out against what they believe to be a harmful and unnecessary increase in government regulation.

The major components of the proposal, as discussed in a previous blog post and in this article, grant CMS greater oversight to regulate Part D plan offerings, plan pharmacy networks, and prescribers.


CMS Proposal Factsheets