The ACR recently submitted comments to proposed changes to the Medicare Advantage and prescription drug programs for contract year 2026. Although the proposed rule covers a litany of topics, the ACR’s comments focused on the provisions related to the Inflation Reduction Act (IRA), prior authorization and the influence that pharmacy benefit managers (PBMs) have on the placement of biosimilars on formularies.
It is uncertain whether the Trump administration will finalize many of the proposed rule’s provisions, particularly those focusing on the IRA. Here is a summary of the ACR’s comments on relevant provisions.
Inflation Reduction Act
The proposal would codify prior CMS guidance implementing section 11202 of the IRA, which establishes the Medicare Prescription Payment Plan and requires each Medicare Prescription Drug Plan sponsor and Medicare Advantage prescription drug plan to provide enrollees with the option to pay cost-sharing under the plan in capped monthly amounts. The proposal, which would be applicable for 2026 and subsequent years, aims to ease the financial burden for those with high cost-sharing early in the year. It also builds on prior rulemaking that codified the IRA provision that capped annual out-of-pocket expenses at $2,000. The ACR supports this provision because it will significantly improve access to essential rheumatologic treatments, reduce financial barriers and improve patient outcomes.
The ACR also took the opportunity to strongly encourage the Centers for Medicare & Medicaid Services (CMS) to continue strengthening the IRA, particularly the Medicare Drug Price Negotiation Program (MDPNP). The ACR is extremely concerned about maintaining the MDPNP, particularly due to its positive impact on rheumatology in terms of access to medications, insurance coverage and overall healthcare affordability for patients with chronic rheumatologic conditions.
PBM Influence on Biosimilars
Biosimilars are often seen as a key mechanism for reducing healthcare costs by offering lower-priced alternatives to expensive biologics. However, if rebate-driven formulary decisions limit the use of biosimilars, the anticipated cost savings may not be fully realized. In the long term, this could prevent the healthcare system from benefiting from the potential price reductions that biosimilars can offer.
As such, the ACR supports the CMS’s proposal to implement a more holistic review of Part D plans’ formulary and utilization management practices to determine if the biosimilars listed on their formulary constitute a utilization management program that is cost-effective, reasonable and appropriate, and inclusive of incentives to reduce costs. The ACR has long been a supporter of increasing beneficiary access to biosimilars, which typically provide a lower-cost version of the reference product biologic drugs and are vitally important therapeutic options for patients with rheumatic diseases.
The proposed rule also included a request for information on the influence that PBMs have on biosimilar placement in formularies. As many members know, the ACR is co-leading the Underwater Biosimilars Coalition with the Coalition of State Rheumatology Organizations, whose goal is to amend current statute so that providers infusing biosimilars will no longer be reimbursed at levels lower than the acquisition cost. This scenario is largely created by the rebates drug manufacturers offer to PBMs in exchange for prime formulary placement of the payers’ preferred drugs. The ACR’s letter reiterated the Coalition’s desire for the CMS to work with Congress on legislation that would address the matter.
Strengthening Prior Authorization in Medicare Advantage
The CMS is proposing significant beneficial reforms to the prior authorization process in Medicare Advantage (MA), requiring plans to adopt electronic systems for streamlining requests, maintain approvals for the duration of treatment and ensure that clinical decisions are made based on evidence-based guidelines. Specifically, the CMS is proposing the following:
- Define “internal coverage criteria” and clarify that MA plans may only apply such criteria when Medicare coverage policies are insufficient. Any such criteria must be:
- Publicly available and transparent;
- Based on current evidence and widely accepted guidelines from recognized professional medical societies or consensus-based organizations; and
- Consistent with Medicare’s regulatory requirements.
- Require that once a prior authorization is approved, it remains valid for the entire course of treatment, preventing the need for repeated approvals and ensuring continuity of care.
- Mandate that plans provide specific reasons for coverage denials, including the exact Medicare or plan coverage rule or guideline used in the determination, and a detailed explanation of how the criteria were applied.
The ACR supports these proposals.
ACR/ARP members should email the ACR’s advocacy team at [email protected] with any questions and comments they may have. We will monitor the rule’s implementation and serve as an educational resource for members on its provisions and the impact they will have on rheumatology.
