AARP, Other Groups Express Concern About Reference-Based Pricing
AARP on Tuesday is expected to issue a warning to seniors and send a letter to CMS to express concern about reference-based pricing, under which some Medicare drug plans charge beneficiaries additional payments for choosing brand-name drugs if generic versions are available, the Wall Street Journal reports. Various other groups, including the National Senior Citizens Law Center, also have written to CMS asking that it require insurers offering Medicare drug plans to more clearly disclose out-of-pocket costs for beneficiaries.According to the Journal, the additional charge to beneficiaries is typically the difference between the cost of the generic and the brand-name drug, plus their usual copayment. In some cases, this can result in beneficiaries paying almost the full cost of a brand-name drug.
In 2009, 30 insurers will use reference-based pricing in 63 of their drug plans, or in nearly 10% of all Medicare prescription drug benefit plans, according to CMS. About three million beneficiaries, or about 12% of all Medicare prescription drug benefit beneficiaries, are enrolled in drug plans that use reference-based pricing in some situations, according to Avalere Health.
Insurers maintain that reference pricing is one way to encourage consumers to choose less-expensive generic medications, which helps keep overall health costs down, the Journal reports.
CMS recently began requiring insurers inform Medicare beneficiaries about which drugs are subject to reference-based pricing and says it is considering ways to guarantee that disclosures about system payments are as transparent as possible to consumers.
In its letter, AARP is expected to ask CMS to revise its Plan Finder, which lets consumers compare how much they would pay for a certain medication under various drug plans. The tool currently does not account for reference-based pricing.
AARP also will ask CMS to allow a special drug benefit enrollment period for beneficiaries who signed up for drug plans using the reference-based pricing system and for the agency to outlaw use of reference-based pricing in Medicare drug plans (Zhang/Fuhrmans, Wall Street Journal, 12/15). This is part of the Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
