The Centers for Medicare & Medicaid Services (CMS) is proposing Medicare and Medicaid coverage for drugs prescribed to treat obesity, the agency said in a Nov. 26 news announcement.
“In recognition of the prevailing medical consensus that obesity is a disease, CMS is proposing to reinterpret the statute to no longer exclude anti-obesity medications for the treatment of obesity from coverage under Medicare Part D and to require Medicaid programs to cover these medications when used to treat obesity,” the announcement said. “This proposal would provide more Americans access to these transformative medications, improving the health and quality of life for millions of people who have obesity.”
The news announcement also said the proposed rule is addressing Medicare Advantage (MA) plans’ copious use of prior authorizations, as well as MA plans’ utilization management and coverage decisions.
“The Biden-Harris Administration has worked to ensure that the Medicare Advantage and Part D prescription drug programs work for people with Medicare, adopted policies holding plans accountable for providing high-quality health care, and protected the sustainability of the Medicare program,” said CMS Administrator Chiquita Brooks-LaSure in the announcement. “This proposed rule continues to build on this work by expanding access to anti-obesity medications for people with Medicare and Medicaid, further addressing prior authorization concerns in Medicare Advantage, and promoting informed choice and transparency by requiring Medicare Advantage plans to share provider directory information on Medicare Plan Finder.”
To date, the CMS fact sheet on the proposed rule said, “CMS has interpreted the statutory exclusion of ‘agents when used for weight loss’ to mean that a drug, when used for weight loss, is excluded from the definition of a covered Part D drug. This historical interpretation does not distinguish between use of a drug for treatment of individuals with obesity and individuals without obesity. Therefore, under current policy, anti-obesity medications are only coverable in Part D if the drug is being used to treat another condition that is a medically accepted indication other than weight loss or weight management (for example, type 2 diabetes or to reduce the risk of major adverse cardiovascular events in adults with established cardiovascular disease and either obesity or overweight).
“However, CMS has re-evaluated the exclusion and considered changes in the prevailing medical consensus towards recognizing obesity as a disease and the increasing prevalence of obesity in the U.S. population generally, and in the Medicare population more specifically.”
How are GLP-1s impacting the HME industry?
While GLP-1 agonist medications such as Wegovy and Ozempic have been prescribed to treat diabetes for decades, they’ve also become a massively popular way to treat obesity and drive weight loss. According to Harvard Medical School, GLP-1s “act in the brain to reduce hunger and act on the stomach to delay emptying, so you can feel full for a longer time. These effects can lead to weight loss.”
Particularly because of GLP-1s trending use as weight-loss drugs, discussions in the home medical equipment (HME) industry have focused on whether the medications could, for example, reduce the need for sleep apnea equipment, since weight loss can lessen sleep apnea symptoms and risk.
HME providers have also wondered if GLP-1s could impact the growing continuous glucose monitor (CGM) segment.
During earnings calls in the first quarter of 2024, leaders from AdaptHealth (Nasdaq: AHCO) and VieMed (Nasdaq: VMD) said they weren’t concerned that GLP-1s would negatively impact the need for CGMs or CPAPs, respectively.
And in VieMed’s Nov. 7 third-quarter earnings call, CEO Casey Hoyt said, “All I can say is what a difference a quarter makes in terms of the overall narrative around GLP-1 drugs. Based on what we’ve seen from ResMed and others so far, we believe it’s pretty conclusive that GLP-1s are not impeding the growth of the sleep business. As we noted before, in fact, it appears to be bringing more patients into treatment for sleep apnea and other disorders as they lose weight. Despite the increasing use of GLP-1 therapies for weight loss, both obesity and sleep apnea rates continue to climb.”
The proposed rule will be published in the Federal Register on Dec. 10. The public comment period will close Jan. 27, 2025.
