WASHINGTON, July 18 (Reuters) - The Obama administration on Friday backed down on restrictions of private insurance coverage for hospice drugs under Medicare, saying the regulations were preventing some terminally ill patients from having access to medicine.

The Centers for Medicare and Medicaid Services (CMS) said it would now require prior-approval for coverage of only four categories of drugs: analgesics, anti-nauseants, laxatives and anti-anxiety drugs. In a regulation announced in March, the government had required prior approval for all hospice drugs under the Medicare Part D prescription drug benefit.

“Based on discussions with stakeholders, we are adjusting our rules so that beneficiaries enrolled in hospice will continue to have access to their medications,” CMS spokesman Raymond Thorn said in a statement.

The change follows a June meeting between officials and stakeholders including hospice providers, insurers and pharmacies and patient advocates who described the operational challenges of requiring all hospice drugs to be approved before they could be dispensed.

On Friday, the agency acknowledged in a memo to stakeholders that the March regulations were causing difficulties and “in some cases, barriers to access for beneficiaries.”

CMS issued the initial rule after an investigation by the Department of Health and Human Services found that the Medicare program for the elderly and disabled were paying twice for some drugs.

Under Medicare’s Part A hospital program, hospices receive daily payments for each patient but are responsible for all drugs related to a patient’s terminal illness. Medicare Part D covers only prescriptions and medications for curative conditions that are unrelated to a terminal illness.

The four groups of drugs that remain subject to the restriction are generally used to relieve discomfort in patients near the end of life. CMS said it expects Part D claims for those treatments to be very few, but said it would provide coverage under the program if a provider simply stated that they were “unrelated” to the patient’s terminal illness. (Reporting by David Morgan; Editing by Lisa Shumaker)