2020 Medicare Part D Formularies


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Starting in 2020, Part D plans will be able to say a drug is on-formulary when treating certain conditions but off-formulary for treating other conditions.

"CMS announced additional flexibilities in the Medicare Part D program to allow for innovative formulary design as a valuable approach to expand drug choices and address the challenge of high drug costs for seniors.
Part D plan sponsors will have the choice of implementing indication-based formulary design beginning in CY 2020. This new guidance expands upon our existing policy by allowing Medicare Part D plan sponsors to tailor which drugs are on their formulary by specific indications.

What is Indication-Based Formulary Design?
Indication-based formulary design is a formulary management tool that allows health plans to tailor on-formulary coverage of drugs predicated on specific indications. Under this type of formulary design, health plans have the ability to negotiate formulary coverage based on specific indications.

How is this Different from Existing Policy?
Existing CMS policy requires that if a Part D plan includes a particular drug on its formulary, the plan must cover that drug for every indication approved by the U.S. Food & Drug Administration, except for those uses that are statutorily excluded from Part D coverage, even if the plan would otherwise instead cover a different drug for a particular indication.

To ensure Medicare beneficiaries are able to make informed enrollment decisions based on information available within the Medicare Plan Finder (MPF), the application of indication based management to a drug will be included in MPF for display under the drug coverage information section."

Reference: https://www.cms.gov/newsroom/fact-sheets/indication-based-formulary-design-beginning-contract-year-cy-2020

"It makes a lot of sense to borrow some of the tools that are used in commercial plans," said Marsha Simon, PhD, president of Simon & Co., a firm specializing in health policy development.

But she warned that allowing plans to exclude certain drugs for certain indications could make formularies too complex and sow confusion for beneficiaries.

"There's no question that adding this additional option for plans makes the program even more complex and even more difficult to understand and more likely to result in a doctor prescribing a drug that's not going to be on the formulary."

Reference: https://www.medpagetoday.com/publichealthpolicy/medicare/74865

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