On January 10th, the Centers for Medicare and Medicaid Services (CMS) issued an unnecessary, damaging proposed rule that would alter Medicare Part D, the successful and popular prescription drug program for seniors. The rule would repeal part of the statutory non-interference provision, impose mandates on preferred pharmacy discounts and limit the number of Part D plans. If implemented, the proposed rule would have a disastrous effect on beneficiaries’ choices and cause large increases in costs to the program, and ultimately future taxpayers.
An uproar ensued. More than 400 patient groups, advocates, and trade associations unleashed a battle cry to stop CMS from causing irreparable damage to the program. Fortunately, the mounting opposition forced CMS to back down, and it communicated to Congress that the agency will not move forward with these major changes to the program – for now. Many fear CMS will make its move after the elections.
{mosads}Hitting the pause button does not mean that the rule and its attendant threats to Part D, are gone. Instead, it awaits the incoming Secretary for the Department of Health and Human Services, Sylvia Matthews Burwell – pending her Senate confirmation. Since a proposed rule has already been published, Burwell would be in a unique position to finalize it any time, without going through the full rulemaking process.
The danger to the program should be eliminated. As the nominee, Ms. Burwell should promise to preserve the competitive, cost-saving nature of the Medicare Part D program. As Secretary, her first act should be to put a stop to these unsound proposals being pushed by CMS bureaucrats.
One consideration for Ms. Burwell is that there is no need for additional regulation or alteration to the program. CMS never made clear its justification for proceeding with the proposed Part D rule. Besides, any technical updates can be addressed without a rule through the annual Medicare Call Letter.
A firewall against these unsound proposals would be a welcome assurance from Ms. Burwell for the millions of seniors benefiting from Part D. The program currently receives high quality ratings from beneficiaries with 91 percent reporting that they are satisfied with the level of access to prescription drugs, and achieves this level of success at a cost $67.8 billion less than initially projected for the 2012 plan year.
Research has painted a picture of the damage that the policies in the rule would inflict on a program for which Ms. Burwell will be the chief steward. Rolling back preferred pharmacy networks as prescribed in the rule could disrupt plans for millions of seniors. Restricting sponsors to only two plans per Part D region will restrict beneficiary choice and cause the consolidation or elimination of plans. Finally, altering the non-interference provision in the Part D statute is significant step down the slippery slope to price controls. Competitive pricing is the foundation for the savings built into Medicare Part D, and the proposal to inject CMS interference into negotiations places that competition at risk – it also happens to be illegal.
Seniors deserve reassurance from Ms. Burwell that their choices will not be limited, their costs will not increase, and that they will continue to receive the cost-sharing benefits provided by a preferred pharmacy. Part D was designed to incentivize competition, and provide seniors with greater access to prescription drugs. The confirmation process is a chance for Ms. Burwell to demonstrate her willingness and ability to ensure the continuation of a Part D program built on vibrant, competitive markets.
Mr. Holtz-Eakin is president of the American Action Forum (AAF) and former director of the Congressional Budget Office. Ms. Boothe is health care policy expert at AAF.