Pharmacy 'gag clauses' are 'unacceptable' in Medicare Part D, CMS says

CMS is warning Medicare Part D insurers that they could face compliance action if they participate in so-called pharmacy "gag clauses."

The move comes after President Trump during a speech earlier this month unveiled a policy "blueprint" on prescription drug prices that stated his administration will, among other things, look to prohibit pharmacy gag clauses. The clauses sometimes are included in contracts between insurers, pharmacies, and PBMs and prevent pharmacies from proactively telling customers if they would save on a prescription drug by paying for it out of pocket instead of using insurance.

CMS says Medicare Part D plans could face compliance action for participating in gag clauses

CMS Administrator Seema Verma in memo sent Thursday to all Medicare Part D insurers wrote that the agency "finds any form of 'gag clauses' unacceptable and contrary to [its] efforts to promote drug price transparency and lower drug prices."

Verma wrote that CMS requires Part D insurers to ensure beneficiaries are paying the lesser of negotiated prices for drugs or copayments. In addition, she noted that Part D insurers must require pharmacies to disclose any price differences between a drug covered by Medicare Part D and the lowest-cost generic version of that drug. Verma wrote that Part D plans can face compliance actions if they do not adhere to those policies (Morse, Healthcare Finance News, 5/18; Diamond, "Pulse," Politico, 5/18; CMS letter, 5/17).

Medicare 101: Cheat sheets for Parts A through D

Through the years Medicare has grown more complicated, including private supplemental insurance and prescription drug coverage. Download our cheat sheets to learn how each of the four parts of Medicare works, and why they’re so important for provider organizations:

Get all the Cheat Sheets


Next in the Daily Briefing

How Appalachian Regional drove employee engagement from 'rock bottom' to top-notch in just 10 months

Read now