NPC Comments on Advance Notice of Methodological Changes for Calendar Year (CY) 2021 for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies – Part II

March 6, 2020

Demetrios Kouzoukas
Principal Deputy Administrator and Director
Center for Medicare
U.S. Centers for Medicare & Medicaid Services
7500 Security Boulevard
Baltimore, MD 21244

Jennifer Wuggazer Lazio, F.S.A., M.A.A.A.
Parts C & D Actuarial Group
Office of the Actuary
U.S. Centers for Medicare & Medicaid Services
7500 Security Boulevard
Baltimore, MD 21244

Submitted via

RE: Advance Notice of Methodological Changes for Calendar Year (CY) 2021 for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies – Part II

Dear Mr. Kouzoukas and Ms. Wuggazer Lazio, 

Thank you for the opportunity to comment on the Advance Notice of Methodological Changes for Calendar Year (CY) 2021 for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies – Part II. The National Pharmaceutical Council (NPC) shares the administration’s goal of building a health care system that delivers affordable, high-value care to Americans.

NPC is a health policy research organization dedicated to the advancement of good evidence and science and to fostering an environment in the United States that supports medical innovation. NPC is supported by the major U.S. research-based biopharmaceutical companies. We focus on research development, information dissemination, education and communication of the critical issues of evidence, innovation and the value of medicines for patients. Our research helps inform important health care policy debates and supports the achievement of the best patient outcomes in the most efficient way possible.

The Advance Notice mentions CMS has begun to develop a quality measure related to prior authorizations and notes that the Agency is considering a future proposal to include the measure as part of the Star Ratings program. We appreciate the recognition that patient health can be negatively impacted when appropriate processes are not in place to quickly review and approve requests for medically necessary tests, services, and supplies. As found in a recent Office of the Inspector General report, beneficiaries often face extra steps for access to medications for avoidable or inappropriate reasons.[i] 

Our comments focus on the use of step therapy protocols, a common form of prior authorization, and NPC research on step therapy. Given the varied use of step therapy, it is important for beneficiaries to understand the quality of the health plan — and the potential restrictions they may face with current and future care — when they select their plans. As CMS develops a quality measure related to prior authorizations, NPC recommends including criteria and considerations related to more timely and efficient step therapy protocols when used as part of broader utilization management programs. 

Our comments highlight:

  • Step therapy protocols vary widely and depending on design, beneficiaries, particularly those in the Medicare population, may face negative outcomes associated with changes or delays in treatment;
  • There is broad agreement on the criteria related to the appropriate development, implementation, communication, and evaluation of step therapy protocols and policies. These criteria can inform quality measure design; and
  • Measurement of prior authorization and step therapy should ensure flexibility for unique patient characteristics, prioritize timely and efficient access, and enable appropriate patient protections. These measures can be included in a quality measure information to alert beneficiaries of the quality of the health plan. However, additional features could be evaluated and build on reporting requirements already articulated and required in Medicare Part D’s prescription drug benefit manual as part of the plan formulary review.

Burdensome Step Therapy Protocols Can Result in Adverse Health Effects for Medicare Beneficiaries

Findings on the use of step therapy in commercial health plans provide insight into the utilization and design of these protocols in Medicare Advantage. Research by NPC and researchers at the Tufts Medical Center for the Evaluation of Value and Risk found a wide variation in the frequency with which plans apply step therapy in specialty drug coverage decisions. Utilization of step therapy ranged from 2 percent to 49 percent across the plans in the Specialty Drug Evidence and Coverage (SPEC) database, which obtains information from publicly available coverage decisions issued by 17 of the largest 20 commercial health plans and lines of business. [ii],[iii] 

Even across plans, some protocols are more onerous and burdensome than others. In the SPEC database analysis, of the just over 1,200 coverage decisions that included step therapy, 63 percent required beneficiaries to step through a single therapy while 37 percent required multiple therapies. Fifteen percent of the total coverage decisions included three or more steps; some protocols required failure on up to five treatments before patients could access a specified therapy. Depending on the clinical conditions associated with the step therapy protocol, a beneficiary could face a delay in treatment use or irreversible harm. 

Medicare covers both the elderly and patients with disabilities, meaning beneficiaries tend to be older, in poorer health, have more comorbidities, and take multiple medications. Step therapy protocols often include logistical burdens such as additional lab tests and more doctor visits before coverage is allowed. These burdens can be more challenging in the aged and disabled population of the Medicare program, especially among patients with severe conditions, limited mobility, or few transportation options. The more restrictive a step therapy program is, the more burdensome the step therapy program can be for an elderly patient or a patient with a disability. 

Additionally, beneficiaries may struggle to navigate the Medicare system or the appeals process. Again, delays in treatment could occur, further exposing these patients to harm. CMS should consider the unique characteristics of the Medicare population when developing measures to ensure that appropriate metrics are designed and subsequently used to ensure protections for patients and timely efficient care to appropriate care. [iv] 

A common understanding regarding the quality of prior authorization and step therapy protocols is necessary as beneficiaries must evaluate the quality of the health plans they are selecting. The need is substantiated by the number of provider and patient groups, along with state legislatures, who have developed principles and passed legislation to improve the development and implementation of step therapy and prior authorization processes. Several of these components have gone through extensive consensus-building processes and may serve as a basis to 1) identify where measure development is needed and 2) highlight if existing measures can be adopted or adapted. 

Quality Measures Should Incorporate Areas of Stakeholder Agreement

To better understand the optimal development and implementation of step therapy protocols, NPC employed a consensus process to assess the agreement on a set of criteria across a multi-stakeholder group of experts from the patient, provider, plan, pharmacy, policy and ethics communities. Criteria were identified through a review of current guiding practices and legislation. Using a four-step modified Delphi approach, roundtable participants were asked to rate the overall appropriateness of step therapy and specific criteria and identify criterion as a standard or best practice[v]

While the participants of NPC’s multi-stakeholder roundtable did not reach consensus on whether step therapy was an appropriate utilization management tool, they did agree on criteria related to the development, implementation, communication, and evaluation of these protocols when these processes are used. Of the final 21 criteria rated as appropriate, the majority (14) were rated as a standard that can and should be adopted today. The remaining seven were identified as best practices. The full criteria are listed in Appendix A. We highlight a key subset of these criteria that CMS could consider when developing quality measures for the Star Ratings program below with an emphasis on timely and efficient decision-making. 

Timely Access and Approval

One of CMS’ goals is to ensure timely prior authorization. [vi],[vii] Panelists at the NPC multi-stakeholder roundtable felt that responses to requests for exceptions should occur rapidly to prevent unintended consequences for patients due to delayed access to care. However, some members from the health plan community expressed concern with a specific window if there is incomplete information from providers to make a timely decision. The advancement of electronic prior authorization, more consistent evaluation criteria and transparent description of the available information can overcome these challenges. Further, several states have legislated a 72-hour response time, broadly, and 24-hour response time for emergency situations. Based on feedback at the NPC roundtable, we propose that any quality measure that includes a time component include parameters to define when the clock “starts,” and provide requirements for the plan to clearly articulate to providers what information are needed to minimize administrative burden.

Efficient Access and Approval

CMS’ second goal is to ensure efficient access to necessary and reasonable care. Based on the output of NPC’s roundtable, we agree that efficient access should be a key component of quality measure utilized in the Star Ratings. Efficiency includes several concepts. First, efficient utilization management must be based on high-quality clinical information, allow appropriate flexibility for patients with unique characteristics, and reduce redundant and burdensome steps. We outline these concepts and provide the supporting stakeholder perspectives form the NPC roundtable below. 

First, panelists at the roundtable focused on the need for any step therapy criteria to be based on clinical criteria. These criteria should be based on high-quality, up-to-date evidence and processes should be in place to ensure new evidence is considered when available. For certain areas with rapidly evolving standards of care, such as oncology, current evidence is critical. In addition, step therapy criteria should be developed by an objective multidisciplinary committee with appropriate external clinical expertise. Further, during the appeals process, relevant peer-to-peer conversations may be needed. While many reviews of step therapy protocols may be evaluated by general practitioners, more complex situations require providers of the same specialty or subspecialty. Following these guidelines can help ensure processes are based on a clinical — rather than a cost foundation. 

Second, all panelists agreed that patients should face “no more steps than clinically reasonable” and that trial duration in each step should ensure that the patient does not face nor is at risk for harm. Medicare Part D plans already submit their prior authorization (in addition to step therapy and quantity limits) protocols to CMS, which compares these processes to adopted best practices. If a plan’s proposed step therapy or prior authorization protocols fall outside of those current practices or clinical guidelines, it must justify doing so. Beyond determining whether a justification has been submitted, additional information such as the supporting documents would make this a meaningful component of the quality measure. We propose CMS build upon existing requirements for Medicare Part D and Medicare Advantage plans to report the evidence used or justification of step therapy protocol structure to any steps are clinically reasonable.

Third, at the NPC roundtable, participants agreed that if applied, the burden associated with the steps and prior authorization should be minimized. For example, the panelists agreed that non-medical switching should be limited – changes in approval might be warranted only if there was 1) new evidence for an existing drug or 2) a newly approved therapy might be more appropriate. 

Fourth, appropriate access includes preventions of care interruptions. Once a plan grants authorization for a therapy, approval should be maintained if the patient remains a beneficiary of that plan. Often information is limited to a 180-day lookback despite prior tests or treatment trials that may have been conducted outside the 180-day window. We also heard at the NPC roundtable, that when a patient has completed steps while covered by another health plan, these steps should be acceptable if the patient switches insurance coverage. This also requires health plans to not only seek prior medical history from the prior health plan or allowing provider attestation rather than requiring patients to repeat prior steps. CMS could incorporate each of these elements as a measure of efficient coverage. 

Based on the evidence presented above, NPC proposes the following for CMS consideration in developing a quality measure, or star rating, for prior authorization:

  • We recommend including a time-based measure to identify the timely review of requests for needed services (e.g., a 72-hour response time, broadly, and 24-hour response time for emergency situations) with a clear recommendation on the available information and when the “clock starts” for this window..
  • We recommend building on existing reporting requirements to establish the efficiency of step therapy programs, which would include ensuring a clinical basis for the protocol, allowing sufficient flexibility for patients with unique characteristics, and reducing burdensome steps to promote more efficient (and less-redundant) care.

Are there other issues with respect to prior authorization and step therapy that CMS should consider?

We offer three additional elements for CMS to consider: 1) enabling greater transparency and communication of the processes to patients and providers, 2) emphasizing the potential to request exceptions, and 3) evaluating the administrative and health impacts of such programs. We provide insight into stakeholder motivation for these considerations and suggest how CMS may integrate key components into existing review and monitoring mechanisms.

First, as outlined at the NPC roundtable, transparency and communication of any step therapy requirements to both patients and providers are critical to minimizing patient and provider burden. For example, requirements regarding the step therapy protocol should be easily accessible via a public link on the plan’s website (e.g., CMS website) so patients can know what to expect as they navigate their health care. Panelists agreed on the need to share exceptions or appeals status electronically with patients (e.g., Information availability and accessibility is already included in Medicare Part D reporting requirements as part of their policies regarding provider and patient education, formulary review, formulary changes and the 60-day notification of transition processes, but may not be as easily accessible. Additional formal requirements around transparency and accessibility of the evidence used to develop step therapy programs and efforts to enable electronical communication to the patient and provider would aid providers and patients alike. 

Second, roundtable panelists agreed it was important to provide patients with information on the requirements to request exceptions, submit appeals for coverage decisions and the option for an external review. The availability of this information on the plan website (or within two-to-three clicks from the beneficiary login) could be another objective component to ensure more transparent and efficient processes for patients. 

Finally, CMS could evaluate the impact of step therapy protocols on health and administrative burden. A study conducted by the U.S. Government Accountability Office found denial rates within the health exchange markets ranged from 1 to 45%. Among beneficiaries who appealed these denials, coverage denials were often reversed in favor of patient access. However, few beneficiaries who had a claim denied sought appeals.[viii] It is unclear if this is due to the lack of need for the requested product, a lack of awareness regarding the appeals and external review process, the time required to file the appeal and obtain provider attestation, or other factors. These data point to the burden patient and providers face when seeking exceptions or an appeal (e.g., time, response to calls, repeat requests, etc.) associated with meeting the step therapy requirements. Examples of population health measures could include total annual step therapy requests for exceptions, approvals, denials, percent of appeals accepted and denied, and percent of appeals sent for external review. Ensuring less burdensome processes can alleviate the administrative efforts and reduce potential impacts on patient health. Routine evaluations of step therapy protocols can help identify whether further policies may be needed, when certain protocols are no longer effective and if unintended consequences occur. Without such evaluation, the administrative costs may outweigh the potential impact of getting the right care at the right cost and optimizing patient health. This evaluation information could be considered in the formulary review of Medicare Advantage and Part D plans and various audit procedures. 

Based on these additional considerations, we propose using and building on reporting requirements already articulated and required in Medicare Part D’s prescription drug benefit manual as part of the plan formulary review. 

As our health care system moves towards paying for value over volume, it is vital to ensure that step therapy and prior authorization processes do not adversely affect patient outcomes. Efficient care and affordable care are the ultimate goals for our nation, but these goals should not come at the expense of patient burdens or health outcomes.

The roundtable conducted by NPC created actionable standards and criteria that can be incorporated by health plans should they employ step therapy. Further, these standards and criteria provide insight into the areas of measurement that can monitor the appropriateness and effectiveness of prior authorization and step therapy. We hope to continue this discussion with CMS and other stakeholders as we work towards better patient outcomes and would be happy to meet to expand upon our comments and share our research. 


Jennifer S. Graff, PharmD
Vice President, Comparative Effectiveness Research
National Pharmaceutical Council 

Taruja Karmarkar, PhD
Health Policy Fellow
National Pharmaceutical Council


[i] U.S. Department of Health and Human Services – Office of Inspector General. “Some Medicare Part D Beneficiaries Face Avoidable Extra Steps That Can Delay or Prevent Access to Prescribed Drugs. September 2019. Accessed March 1, 2020.
[ii] Chambers, J., Kim, D., Pope, E., Graff, J., Wilkinson, C., and Neumann, P. (2018). Specialty Drug Coverage Varies Across Commercial Health Plans in the US. Health Affairs, 37(7), 1041-1047.
[iii] Chambers, J., Kim, D., Pope, E., Graff, J., Wilkinson, C., and Neumann, P. (2018). Specialty Drug Coverage Varies Across Commercial Health Plans in the US. Health Affairs, 37(7), 1041-1047.
[iv] Robeznieks, A. 1 in 4 doctors say prior authorization has led to a serious adverse event. American Medical Association. February 5, 2019. Accessed February 26, 2020.
[v] Panelists were first asked to rate each criterion on a scale and were categorized into tertiles (1-3: Not appropriate, 4-6: Neither, 7-9: Appropriate). Second, panelists were asked to identify each criterion as a standard (a criterion that could be implemented today), a best practice (an aspirational criterion to be implemented in the future) or neither. A standard was determined if at least 75% of panelists rated the criterion as a standard. A best practice was determined if less than 75% of the panelists rated the criterion as a standard, but at least 75% of panelists rated it either a standard or a best practice. If the cut points standards or best practices were not met, the criterion did not remain.
[vi] Advance Notice of Methodological Changes for Calendar Year (CY) 2021 for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies – Part II. February 5, 2020. Accessed February 5, 2020.
[vii] Castellucci, M. CMS to alter prior authorization process this year, Verma says. February 11, 2020. Accessed February 26, 2020.
[viii]United States Government Accountability Office. “Private Health Insurance – Data on Application and Coverage Denials.” Report to the Secretary of Health and Human Services and the Secretary of Labor. March 2011. Accessed March 2, 2020.