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Rebecca Farley

Director, Policy & Advocacy, National Council for Behavioral Health

CMS Updates Essential Benefits for 2016; Improves Prescription Drug Coverage

November 26, 2014 | Health Insurance Exchanges | Comments
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Consumers could have greater access to prescription medications in health plans sold in the state and federal Marketplaces under a proposed essential benefits rule issued by the Centers for Medicare and Medicaid Services (CMS) last week.

The wide-ranging proposed rule – known as the 2016 Notice of Benefit and Payment Parameters – addresses several key aspects of the Affordable Care Act, from states’ authority to review health plans’ premiums, to requirements for contracting with essential community providers, and more. Of most interest to mental health and substance use providers and consumers, the proposed rule outlines new standards health plans must use in developing their formularies and informing consumers about their prescription drug coverage under the plan.

Under current law, qualified health plans sold in the Marketplaces must offer coverage that, at a minimum, offers access to at least one drug in every category and class of the United States Pharmacopeia (USP). In practice, this has meant that many drugs used to care for vulnerable populations, such as recently FDA-approved drugs or combination therapies, have not been available in all qualified health plans.

Noting that “the USP system was developed for the Medicare population [and] some drugs that are likely to be prescribed for the larger [essential health benefits] population were not reflected,” CMS proposes to replace that standard with a requirement that plans adopt a pharmacy and therapeutics (P&T) committee to ensure that the plan’s formulary drug list covers a sufficient number and type of prescription drugs. The new standard is designed to ensure that plans cover drugs based on a qualitative rather than merely quantitative standard. To that end, it provides a list of P&T committee standards (for example, among other requirements, using scientific evidence that would include consideration of safety and efficacy, cover a range of drugs in a broad distribution of therapeutic categories and classes and provide access to drugs that are included in broadly accepted treatment guidelines).

Consumer groups, including the National Council, have repeatedly notified agency officials about our concern that the current vaguely worded non-discrimination standards in federal law create loopholes that some plans have exploited to design benefit packages that do not fully cover people with high health care needs, such as individuals with serious and persistent mental illness. For example, a recent analysis by the consulting firm Avalere found that over 60 percent of antidepressant drugs and 55 percent of antipsychotic drugs were covered only on the highest formulary tier among most major issuers – meaning that these drugs are subject to the highest levels of cost-sharing by consumers.

The new proposed rule includes a reminder to plan issuers that CMS will “identify specific practices that may be considered discriminatory, including restricting services based on age when they may be appropriate for all ages, and placing all drugs for a specific condition on a high cost-sharing tier.”

To increase transparency of information, the proposed rule also requires health plan issuers to provide consumers with an up to date, accurate, and complete list of all covered drugs on their formulary, including any tiering structures and a description of any restrictions on medication access, such as prior authorization or fail-first requirements.

The National Council commends CMS for its attention to the important issues of non-discrimination, transparency, and formulary design. We look forward to working with the agency on implementation of these requirements, and continuing to be a voice for insurance plan practices that protect consumers’ access to lifesaving treatment.

Also of note in the proposed rule were the following provisions:

  • Marketplace re-enrollment – CMS says it is “considering giving consumers the option of being defaulted into a lower cost plan rather than their current plan” given that current rules re-enroll them in their current plan regardless of potential premium increases.
  • “Habilitative services” – CMS proposed that these services be defined using the same definition currently used in the Glossary of Health Coverage and Medical Terms available on the healthcare.gov website.
  • EHB benchmark plan selection – CMS proposes that states select new EHB benchmark plans for 2017 based on plans available in 2014 (current plans were selected based on plans available in 2013).
  • Essential community providers (ECPs) – CMS proposes to codify current sub-regulatory guidance requiring health plans to contract with at least 30 percent of ECPs in their network areas. The definition of ECP does not currently include community-based mental health and addiction treatment providers, although plans that do contract with these providers may count them towards the 30 percent requirement.