UPDATE 1-US administration pulls back on Medicare drug benefit proposals

Mon Mar 10, 2014 1:46pm EDT

(Recasts lead, adds details and background)

WASHINGTON, March 10 (Reuters) - The Obama administration on Monday pulled back from possible changes to the popular Medicare Part D prescription drug program, saying it would not finalize proposals that have spawned fierce opposition from a broad coalition of interests.

Marilyn Tavenner, administrator of the U.S. Centers for Medicare and Medicaid Services (CMS), said in a letter to members of Congress that her agency had decided not to move forward at present. She said it would instead seek further input from stakeholders with the prospect of revisiting changes "in future years."

Lawmakers of both parties have joined insurers, drug makers, pharmacy chains and consumer advocacy groups to express misgivings about the proposals and warn that the changes could limit choices for Part D's 36 million elderly and disabled beneficiaries.

CMS officials have said the changes are necessary to head off future cost increases.

Part D provides drug benefits through private insurers. In January, the administration proposed altering the program by removing three drug classes from "protected" status, broadening pharmacy networks in some plans and limiting the choice of plans in any given region.

Insurers are required to cover all drugs in a protected class.

The proposed changes had been expected to go into effect in coming months and would also have affected drug coverage under Medicare Advantage, which allows beneficiaries to obtain major Medicare benefits through private insurers.

"Given the complexities of these issues and stakeholder input, we do not plan to finalize these proposals at this time. We will engage in further stakeholder input before advancing some or all of the changes in these areas in future years," Tavenner said in a letter sent on Monday to members of the Senate and House of Representatives.

She said CMS would move forward with proposals designed to combat fraud, promote transparency and ensure access to care in natural disaster. (Reporting by David Morgan; Editing by Chizu Nomiyama and Andrew Hay)