By Noah Tong Nov 26, 2024
The Centers for Medicare & Medicaid Services is attempting to cover anti-obesity medications under Medicare Part D and Medicaid, the agency announced Nov. 26.
Under the Contract Year 2026 MA and Part D proposed rule (PDF), CMS is choosing to follow conventional medical thinking that obesity is a disease. As such, the agency is then able to reinterpret a statute that excludes weight loss drugs from coverage.
“During my time as CMS administrator, I heard from countless people about how this coverage exclusion is a barrier preventing people from treating obesity living healthier lives,” said CMS Administrator Chiquita Brooks-LaSure during a press conference.
Medicare has long claimed it does not have the authority to cover anti-obesity medications, which is why the agency is attempting to reinterpret the statute. They say this new approach is better aligned with existing policies, like covering drugs used to treat AIDS wasting and cachexia. In Medicaid, the reinterpretation would allow states to determine whether to cover GLP-1 drugs.
For individuals that are considered overweight but not obese, the drugs would not be covered.
Critics, meanwhile, say radical uptake of GLP-1 drugs for weight loss would be far too costly on the healthcare system. Officials declined to say if semaglutide would be a selected drug under the drug price negotiation program through the Inflation Reduction Act.
CMS projects that 7% of the Part D population, or approximately 3.4 million Americans, would be newly eligible for coverage of anti-obesity medications, increasing by 1% each year.
The agency expects Part D coverage will increase costs by $24.8 billion in Part D and $14.8 billion in Medicaid. Though the policy could create savings in the long-term, CMS did not assume downstream savings in the proposed rule.
Because of Inflation Reduction Act’s $2,000 out-of-pocket cap and the premium stabilization demonstration, officials downplayed fears of surging premiums. The total HHS budget sits at $2.1 trillion.
“We do not expect any short term impact on premiums from this proposal, and in fact, this proposal provides a significant savings for people who currently may be paying out of pocket for these medications,” said CMS Deputy Administrator and Director for the Center for Medicare Meena Seshamani, M.D
“This action will not only save money but will more critically save lives by significantly driving down obesity rates and improving health outcomes for millions — including the millions of Black and Brown Americans who are disproportionately and unfairly shouldering the burden of the obesity epidemic,” said the Health Equity Coalition for Chronic Disease following the announcement.
The proposed rule also reworks prior authorization and utilization management, guardrails for AI safety, provider directories through the Medicare Plan Finder and new requirements of brokers.
The new regulation may be one of the last major efforts of the Biden administration to revamp healthcare before leaving office.
After the comment period concludes, the rule would need to be finalized in Trump’s next term, said a CMS senior official, hinting the current administration would not try to rush to rubber stamp the rule. If the rule was finalized before Trump takes office, it would be subject to rescission under the Congressional Review Act, which could threaten the policy’s implementation permanently.
It wouldn’t be surprising to see Trump scuttle the plan to cover weight loss drugs, given the incoming administration’s desire to slash the federal budget and regulations, as well as potential HHS Secretary Robert F. Kennedy Jr.’s aversion to the drugs. That might be a welcome development for insuresrs footing the bill.
“The excessive prices drugmakers command for GLP-1s have enormous cost consequences for consumers, taxpayers and employers, said the Alliance of Community Health Plans in a statement. “There are limited long-term studies of these drugs on patients with obesity, particularly those who do not have diabetes or other related chronic conditions.”
A host of new actions addressing prior auth is proposed in the rule. They include prohibiting a MA plan from reopening an approved authorization for inpatient hospital admission and other clarifications of existing enrollee liabilities.
The rule codifies the benefits MA plans must cover and better determines the guardrails these plans must follow when determining internal coverage. These changes are designed to simplify coverage criteria for medically necessary determinations. Also codified is a provision mandating MA plans enact a utilization management committee for plan policies.
Prior auth changes were informed by utilization management audits conducted by CMS this year. The agency found that Medicare Advantage plans overturn 80% of denials on appeal, but only 4% of claims decisions are appealed.
Following up on an executive order last month requiring the feds to make sure AI tools don’t result in inequity in health care organizations, today’s rule mandates MA plans cover services equitably and does not discriminate, no matter if a decision spawns from an AI system or not.
The rule also overhauls provider directories.
Right now, the Medicare Plan Finder, which allows beneficiaries to shop for MA and Part D plans, does not include any information on provider directories, though it can be found on a MA plan’s website.
“This can be cumbersome for individuals when they must search the Medicare Plan Finder, as well as a plan’s website, to find provider network information,” said CMS in a fact sheet.
Under the proposed rule, searchable provider information must be given from MA plans to CMS for the Medicare Plan Finder.
But wait, there’s more.
Biden addresses behavioral health in this rule, too, by limiting cost sharing to be equal or less than traditional Medicare. They are pushing for 20% coinsurance for mental health, psychiatric and outpatient substance abuse services. There would also be zero cost sharing for opioid treatment program services. CMS is asking for public comment on how to best implement these policies with minimal upheaval.
“In response to concerns that cost sharing in other service categories will be raised in response to this movement in behavioral health, we also emphasize that the extent to which organizations may shift costs to services utilized by certain groups of enrollees is limited by statutory and regulatory requirements that ensure beneficiaries can access needed health services regardless of their health condition,” CMS added.
The agency also wants to expand its definition of broker “marketing”, as CMS continues to receive complaints of shady tactics meant to deceive consumers, even as CMS has denied more than 1,500 TV ad submissions. This allows CMS to review more ads before they go to air.
Agent and brokers would also be required to discuss a consumer’s eligibility for the low-income subsidy and Medicare savings program, as well as provide more information on Medigap.
CMS is hoping to make a series of technical changes to the medical loss ratio calculation. Part of that incentive, it appears, is to crack down on unhealthy consolidation in the MA market.
“In addition to the proposed changes, we are issuing a request for information on potential policies that CMS could adopt regarding how the MA and Part D MLRs are calculated in order to enable policymakers to address concerns surrounding vertical integration in MA and Part D,” the proposed rule says.
CMS is concerned MLR reporting is less transparent when these organizations are involved.
In response to backlash from the FTC and media outlets that pharmacy benefit managers allegedly push patients toward expensive brand drugs, the rule reinforces language mandating formularies include access to generics and biosimilars. The rule includes several transparency measures for Part D plans and sponsors.
https://www.fiercehealthcare.com/payers/biden-proposes-medicare-medicaid-cover-anti-obesity-drugs