Drug rule is ditched by Obama

The Obama administration is abandoning a surprise plan to alter Medicare’s drug coverage after receiving withering criticism from Congress and K Street.

Medicare chief Marilyn Tavenner alerted lawmakers Monday that her agency would not go forward with a proposal to give insurers more leeway to limit the number of drugs they cover for Medicare beneficiaries. 

Critics argued that making the change, which was designed to save money, would have hampered seniors’ access to necessary drugs.

Democrats worried the issue would hurt them in the midterm elections, and House

Republicans had scheduled a vote this week on a bill blocking the regulation from going forward.

The about-face is the latest example in which the Obama administration has changed its healthcare policies to try to benefit the president’s party.

Tavenner’s announcement means Medicare will continue to subject six classes of prescription drugs to stringent rules requiring insurers to cover nearly all medications in those classes. 

If the change had gone forward, only three classes of drugs — cancer, HIV and anti-seizure medications — would have been subject to those rules. 

“We will engage in further stakeholder input before advancing some or all of the changes in these areas in future years,” Tavenner wrote in a letter to lawmakers announcing the administration was backing off. 

“We are committed to continuing to work with Congress to continue to ensure that Parts C and D work best for Medicare beneficiaries.”

Seizing the opportunity, Senate Minority Leader Mitch McConnell (R-Ky.) called on the administration to go a step further and withdraw its proposed cut to Medicare Advantage. 

Set to be finalized next month, the rate reduction is opposed by Republicans and some Democrats, and GOP campaign committees are already using it to target opponents.

“We remain concerned about the impact of ObamaCare’s looming cuts to Medicare Advantage, something that was not addressed in today’s announcement,” McConnell said in a statement. 

“Seniors need to know whether the president will stand by his word, and that they can keep the plans they have and like.” 

The Obama administration’s quixotic push to alter Part D in an election year stunned the healthcare world when the regulations came out in January. 

The vote on the House GOP bill to block the regulation is likely headed for approval in a bipartisan vote, and House Republicans have kept the bill on their schedule for the week.

The Centers for Medicare and Medicaid Services (CMS) floated a long list of changes in addition to lifting “protected status” for three types of drugs. 

One provision would have limited the number of Part D drug plans that insurance companies could offer in a specific region of the country. 

Another would have relaxed the rules that govern plans’ preferred pharmacy networks, allowing all pharmacies to participate. 

The regulations would have also permitted federal health officials to participate in negotiations between insurers and pharmacies in Part D for the first time. 

Each change quickly triggered its own fight among industry groups. 

Local pharmacies supported the relaxed rules for preferred networks, for example, while disease and patient groups slammed the changes to “protected status” drugs. 

Altogether, the controversy produced an unprecedented backlash for the administration that united Republicans, Democrats and stakeholders across the healthcare world. 

The CMS was flooded with communications from lawmakers, including a rare, unanimous letter from the Senate Finance Committee highlighting the likely harm to seniors. 

The House Energy and Commerce and Ways and Means committees also weighed in with a unique bi-panel, bipartisan letter opposing the changes. 

Tavenner walked back nearly all of the proposed changes Monday but vowed to finalize several smaller provisions, like strengthening certain standards for drug prescribers, in short order. 

“We plan to finalize proposals related to consumer protections, anti-fraud provisions that have bipartisan support and transparency after taking into consideration the comments received during the public comment period,” she wrote. 

The announcement received swift praise from healthcare groups that emerged to fight the regulations, such as the Washington, D.C.-based Partnership for Part D Access. 

“We are thrilled that CMS has listened to the loud chorus of support for maintaining beneficiary access to the life-saving drugs provided under Medicare Part D,” said Chuck Ingoglia, senior vice president of the National Council for Behavioral Health, which is spearheading the group. 

“Although we need to remain vigilant on this issue, we commend today’s action by CMS will allow millions of seniors to continue to confidently rely upon Medicare to provide them the drugs they need.”

This story was posted at 12:38 p.m. and updated at 5:40 p.m. and 8:37 p.m.