Late last week, more than 370 organizations
representing insurers, drug makers, pharmacies, health providers and
patients urged the Centers for Medicare and Medicaid Services (CMS)
to withdraw changes it had proposed for Medicare Part D.
One of the federal government's most successful and cost-effective
healthcare programs, Part D provides drug benefits for the elderly
and disabled through private insurers to 36 million enrollees.
Critics said the changes, if adopted in coming months, could not
only undermine Part D benefits but impact drug benefits available
through Medicare Advantage, a program that allows Medicare
beneficiaries to obtain their major medical coverage through private
"Given the complexities of these issues and stakeholder input, we do
not plan to finalize these proposals at this time. We will engage in
further stakeholder input before advancing some or all of the
changes in these areas in future years," CMS Administrator Marilyn
Tavenner advised in a letter sent on Monday to members of the Senate
and House of Representatives.
The proposals were opposed by both Republicans and Democrats in
Congress. The Republican Party had already begun to look for ways to
leverage popular anger over the changes into campaign attacks on
Democratic incumbents who could be vulnerable in November's election
showdown for control of Congress.
Elated critics of the proposed changes said the government had
effectively agreed to start over in the face of broad, bipartisan
"We applaud CMS administrator Tavenner for the agency's sound
judgment on this issue," said Mary Grealy, president of the
Healthcare Leadership Council, a coalition member that represents
chief executives from the healthcare industry.
Others noted the move curtails a proposal to broaden pharmacy access
and could hurt Medicare beneficiaries in rural areas and underserved
neighborhoods who might have benefited from the change.
The new rules, proposed in January, called for ending a requirement
that insurers offer coverage for all drugs classed as
antidepressants and as immunosuppressants, which are used in
transplants. CMS was contemplating a similar change for
antipsychotics after 2015. In addition, the proposals had called for
broadening the number of pharmacies covered by health plans while
limiting the choice of Medicare Part D policies available in any
"We are deeply disappointed in CMS' decision not to move forward at
this time with the pharmacy choice provision," said B. Douglas Hoey,
chief executive officer of the National Community Pharmacists
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"In many rural communities, independent community pharmacies are
the only pharmacy provider and they are often excluded from
preferred pharmacy arrangements," he said.
CMS officials had argued that the changes were needed to rein in
healthcare spending and create clearer choices for consumers through
greater competition and price transparency.
Senator Ron Wyden, Democratic chairman of the Senate Finance
Committee, defended the agency's new position: "This is good news
and shows that the administration shares our concerns about
potential disruptions for seniors enrolled in the Medicare
prescription drug program."
Republicans said the administrations "backpedaling" on prescription
drugs was not enough to prevent further cuts to seniors' benefits
under President Barack Obama's healthcare law.
"We remain concerned about the impact of Obamacare's looming cuts
to Medicare Advantage, something that was not addressed in today's
announcement," Senate Republican leader Mitch McConnell said in a
statement issued by his office.
The law known as Obamacare calls for restraining cost growth in
Medicare partly by reducing Medicare Advantage payments to insurers
that for years have made the program more costly than traditional
Medicare. Proposed Medicare Advantage reductions, which will not be
finalized until next month, are already being portrayed as cuts to
Medicare in political advertising.
Meanwhile, Tavenner said CMS would still move forward with Medicare
Part D proposals designed to combat fraud, promote transparency and
ensure access to care in natural disaster.
The $70 billion Part D program launched a decade ago under former
President George W. Bush. Over 10 years, its costs of $346 billion
have been 45 percent lower than initially projected.
(Reporting by David Morgan; editing by
Chizu Nomiyama and Andrew Hay)
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