Medicare terminates prescription drug contract with Fox Insurance Company

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The Centers for Medicare & Medicaid Services on Tuesday ended its contract with Fox Insurance Company after an on-site review revealed serious policy violations. It represents the first time that CMS has terminated a contract with a Part D drug plan since the drug program began in 2006, according to CMS.

In late February, CMS sanctioned Fox for not following Medicare's rules for providing prescription drug coverage to beneficiaries. A review earlier this month found that Fox had enacted policies that limited access to high-cost drugs. The company also made obtaining other drugs more difficult. In some instances, Fox required beneficiaries to undergo unnecessary invasive procedures before allowing access to prescription drugs, according to CMS.

“They were denying access to drugs,” Peter Ashkenaz, deputy director of media relations at the Centers for Medicare & Medicaid Services, told McKnight's. “The vast majority of members in the plan are LIS—low-income subsidy—so they're vulnerable. Many of them have HIV, AIDS or cancer, so not making the drugs accessible to them really would impact their lives.”

Fox provided the following statement to McKnight's: “Fox Insurance is working with their attorneys and collaborating with CMS to address CMS' concerns, and they are confident that, working together, we'll be able to resolve this situation in a relatively short amount of time.”

CMS said it is transferring the more than 123,000 Medicare beneficiaries currently enrolled in a Fox Insurance plan to other coverage. Those beneficiaries will continue to have access to prescription drugs through LI-NET, a Medicare program administered through Humana, CMS said. Fox-enrolled beneficiaries will be able to choose a new prescription drug plan through May 1.