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CMS Issues Final 2008 Guidance On Vaccines for Medicare Rx Plans May 22,2007 Part D plans planning to offer service in 2008 received CMS guidance on vaccine administration May 14, four days before the plans were due to submit their bids for next year. In the Tax Relief and Health Care Act of 2006, Congress required that the Part D program cover the costs of administering vaccines starting in 2008.Previously, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 required that vaccines be considered covered drugs under the Part D program.Prior to that, Part B covered the cost and administration of flu, pneumonia, and hepatitis B vaccines, and currently covers the administration of vaccines covered by Part D. The CMS issuance to prospective 2008 plans formalized earlier CMS guidance and provided additional clarification to the policy.CMS had issued vaccine administration guidance in the March 22 draft of the 2008 call letter to plans.However, they did not include those details in the final call letter issued April 19. According to CMS, costs of administering Part D-covered vaccines should be considered a component of the negotiated prices for vaccines.Beneficiary cost-sharing for these vaccines should be designed to include both the cost of the vaccine and the administration.Beneficiaries would be responsible for a single copayment when receiving a vaccine, not separate copays for the vaccine and the administration. The agency told plans that they should cover administration of vaccines both in-network and out-of-network providers.This means doctors’ costs to administer vaccines should be reimbursed even though physicians do not normally have contractual relationships with plans.CMS said that whenever pharmacies dispense and administer a vaccine, a single claim should be filed with the Part D plan.However, sometimes a physician from outside the network will obtain and administer a vaccine.In this case, providers should bill beneficiaries for all charges.Beneficiaries, in turn, seek reimbursement directly for their plans. The issue of Part D plans reimbursing for vaccine administration is complicated.Currently, there are private-sector initiatives to allow physicians to bill Part D plans directly for vaccine administration costs and CMS’s guidance would not impede those arrangements from being made.CMS claims the best way to handle vaccine administration would be for plans to receive single claims from providers for the cost of vaccines and their administration. Medicare Advantage plans that offer Part D coverage do not face the same issues as stand-alone prescription drug plans because MA plans already contract with physicians.This would make them better able to bill directly for vaccine administrations and their costs.However, due to the complexity, the Medicare Payment Advisory Commission approved a recommendation in April that Congress reverse its mandate that Part D cover preventative vaccines and associated administration costs.Instead, MedPAC will tell Congress in its forthcoming June 2007 report that vaccines and their administration costs should be covered under Medicare Part B.
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Centers for Medicare and Medicaid Services Should Use Tax Data to Help Find
Low-Income Part D Clients, Democrats Say
May 3, 2007
Democrats on the House Ways and Means Health Subcommittee May 3 urged the Centers for Medicare & Medicaid Services to seek the ability to obtain beneficiary tax data from the Internal Revenue Service.That way it can better identify people who might qualify for the Part D low-income subsidy, according to the Members. However, during a committee hearing, CMS Senior Advisor S. Lawrence Kocot questioned whether such efforts would increase enrollment among low-income beneficiaries.Rep. Lloyd Doggett (D-TX) said he was concerned that CMS apparently had not reached out to the IRS or to lawmakers on possible statutory changes that would let the IRS share beneficiary tax data with CMS and the Social Security Administration.This would help determine who might qualify for the Part D low-income subsidy. Doggett introduced legislation March 15 that would allow for such tax information sharing in order to identify low-income beneficiaries who might be eligible for the Part D extra help.The Department of Health and Human Services Office of Inspector General in a November 2006 report also said that such legislation was necessary to allow for that data sharing. Kocot said he believes the OIG conclusion was not as well informed as it could have been.He said access to IRS data might identify only 100,000 to 200,000 of the estimated 3 million to 4 million low-income beneficiaries still not participating in the Part D program.Kocot also said his agency was concerned about privacy issues that could arise from the sharing of people’s personal tax data.Furthermore, he said he believed there was nothing legislatively that could be done to improve outreach efforts to low-income individuals.Kocot said outreach was best achieved through “relationship building.” Kocot went on to say that more should be done to sign up eligible beneficiaries for the low-income subsidy, much like the CMS efforts in the first year of the Part D program to get more Medicare beneficiaries into it.Some Democrats on the panel described CMS’s outreach efforts as modest because many low-income subsidy recipients were automatically enrolled in Part D plans and they were brought over from the Medicaid rolls.Kocot disagreed with them and described uptake in the Part D program in its first year as far more successful than other programs aimed at low-income individuals that had been around longer.
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Finance Panel To Take Up Medicare Drug Bill After Recess
April 10,2007
The Senate Finance Committee is poised to act on a Medicare prescription drug negotiation bill "as soon as possible" after the Senate returns from its spring recess, according to a Democratic committee aide. Other sources say the bill produced by the committee will be less stringent than a similar bill that passed the House during its "100 hours" agenda in January. Senate Republican aides believe the Senate Medicare drug bill could be a simple "sense of the Senate" resolution stating that the federal government should have the ability to negotiate prescription drug prices for Medicare beneficiaries. Under existing law, the federal government is prohibited from engaging in such negotiations. The Finance Committee aide could not confirm the Republicans' impression that the bill will take the form of a resolution, saying only that Finance Chairman Baucus is talking with his colleagues about lifting the negotiation ban and "what additional provisions may or may not make the benefit work better for seniors." "Chairman Baucus has certainly said that the ban on negotiating drug prices in the Medicare drug benefit should be lifted," the aide said. According to Senate Majority Leader Reid, the Medicare drug bill will be second in the floor queue after the Senate takes up -- and most likely passes -- a bill allowing federal funding for embryonic stem cell research. Assuming Reid sticks to that schedule, the Finance Committee would have only a few weeks, at most, to produce a bill. Finance ranking member Charles Grassley, R-Iowa, is firmly opposed to any attempt to allow the government to participate in private-sector negotiations over drug pricing. His disagreement with Baucus over the issue could complicate the traditionally bipartisan workings of the committee. A source said Grassley's staff has not been included in any discussions of the issue. GOP leaders, meanwhile, are poised for a fight over the drug negotiation proposal, which they say has lost steam since the midterm elections. Democrats made government negotiation of Medicare drug prices one of their key issues in the campaign, but since that time, it is not clear that the issue has much resonance with the public, according to Republican leadership aides. During the Senate floor debate, Republicans plan to cite recent statistics showing high enrollment among seniors in the Medicare Part D drug plan as well as high satisfaction rates with the benefits. Baucus, who was instrumental in negotiating the Medicare prescription drug bill, has been careful not to endorse the House bill, which would require the HHS secretary to negotiate drug prices with manufacturers. Baucus also has indicated that government intervention may be appropriate for certain high-priced cancer drugs, but he has stopped short of saying the government should negotiate prices for pharmaceuticals routinely prescribed for seniors. AARP, meanwhile, earlier this week launched an ad campaign touting the prescription drug negotiation bill, targeting senators that the senior citizens' advocacy group believes could be swayed on the Senate floor. The campaign, which features print and radio ads in 10 states, will culminate with a phone-in campaign to lawmakers scheduled for April 4.
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Ryan White CARE Act Reauthorization Bill Update
April 5, 2007
The Ryan White Comprehensive AIDS Resources Emergency (CARE) Act, the nation’s largest HIV specific federal grant program and a critical source of care and treatment for people living with HIV/AIDS in the United States, was due to be reauthorized by the United States Congress for the third time at the end of FY 2005.Congress was unable to reauthorize the CARE Act until the end of 2006, during which time the program’s authority was extended under current law while Reauthorization discussions continued.In December 2006, the House and Senate finally agreed on a finalized version of H.R. 6143, the Ryan White HIV/AIDS Treatment Modernization Act of 2006. On December 20, 2006, President Bush signed into law H.R. 6143, which revised and extended funding for HIV/AIDS programs in the United States.The legislation calls for strengthening "hold harmless" provisions (a provision that protects grantees from large decreases in funding from year to year) and maintaining funding levels so that states will not receive less than 95 percent of their 2006 funding levels; counting all HIV-positive people for funding regardless of where they live or how the data are reported; maintaining the funding pool for prescription drugs and therapeutics; continuing HHS' development of a framework addressing HIV/AIDS in the U.S. and a follow-up report of its progress in 2008; and maintaining a four-year transition period for states with code-based reporting systems to switch to names-based reporting systems without penalization.Further, HIV-positive people living in the rural South, who often face obstacles getting to urban treatment facilities, could benefit from transportation programs and an increase in available medications with boosted funding to Southern states under the compromise bill.The bill also repeals the Ryan White program after three years, forcing Congress to write a new law and reconsider the program's structural challenges before then. Under this provision, Congress will have to revisit the Ryan White Care Act in FY2009. According to HIV/AIDS advocates, the legislation would make HIV/AIDS services in Southern states "comparable" to other regions of the country. "If you look at our urban areas, primary care may be available, but if you go out beyond the reaches of cities like Birmingham or Charlotte, N.C., or Raleigh-Durham, it is not unusual for people living with HIV/AIDS to travel really far distances to get to a primary care provider," Evelyn Foust, head of North Carolina's HIV prevention branch, said, adding, "They can have a real difficult time getting primary care, and that access makes all the difference in the world." Kathie Hiers, CEO of AIDS Alabama, said the additional $7 million Alabama is scheduled to receive would be used to expand transportation programs for HIV/AIDS patients and increase the number of medications in the Alabama Drug Assistance Program. According to Hiers, 35 medications currently are on Alabama's list, compared with 500 in New York State.According to Senate Health, Education, Labor and Pensions Committee estimates, Georgia would receive an additional $4.1 million annually under the new legislation; Louisiana, $1.1 million; Mississippi, $1.7 million; North Carolina, $10.2 million; and South Carolina, $2.3 million.
AIDS Drug Assistance Program (ADAP) The law includes the following provisions related to the AIDS Drug Assistance Program (ADAP): Title II: Care Grants - The law amends provisions relating to grants to enable states to improve the quality, availability, and organization of health care and support services for individuals and families with HIV/AIDS (Care grants). The law requires the state to use not less than 75 percent of such a grant to provide core medical services that are needed in the state for eligible individuals with HIV/AIDS, such as outpatient and ambulatory health services and medical case management. The law requires the Secretary to waive such requirement if: (1) there is no waiting list for AIDS Drug Assistance Program (ADAP) services; and (2) core medical services are available to all eligible individuals with HIV/AIDS. The law requires the Secretary to develop and maintain a list of classes of core ADAP antiretroviral therapeutics. Further, the law requires states to ensure that: (1) such therapeutics are the minimum required treatments provided by the state ADAP program; and (2) any drug rebates are applied to Care grant activities, with priority given to ADAP activities. The law conditions state grants for pharmaceutical therapeutics on the state having no unobligated funds subject to reallocation. The law allows the HHS Secretary to waive state matching requirements for ADAP if the state has otherwise complied with matching requirements.In addition, the law limits the increase of ADAP grants for states using code-based reporting, versus names-based reporting. Title III: Early Intervention Services - The law amends provisions relating to grants to public and nonprofit private entities to provide early intervention services. The law also prohibits the HHS Secretary from making a grant unless the applicant agrees to expend the grant for core medical services, support services, and administrative expenses.The law requires a grantee to expend: (1) not less than 50 percent of the grant amount to provide specified early intervention services; and (2) not less than 75 percent of grant funds to provide core medical services that are needed in the area involved for individuals with HIV/AIDS.The law allows the Secretary to grant waivers to the core medical services requirement if: (1) there is no waiting list for AIDS Drug Assistance Program (ADAP) services; and (2) core medical services are available to all individuals with HIV/AIDS. Further, the law allows grantees to provide, with the Secretary's approval, support services needed to achieve medical outcomes, such as respite care, medical transportation, and nutritional counseling.
Government Accountability Report
In February 2006, the Government Accountability Office (GAO) released a report entitled ‘‘HIV/AIDS: Changes Needed to Improve the Distribution of Ryan White CARE Act and Housing Funds.’’ The full report can be found at http://www.gao.gov/new.items/d06681t.pdf.Among other things, the GAO highlighted that ‘‘[f]orty-eight of the 51 Eligible Metropolitan Areas (EMAs) would have received more funding if there had been no hold-harmless provision.’’
For more information, please contact us: PAREXEL Health Policy 316 Pennsylvania Ave SE Suite 403 Washington, D.C. 20003 202.546.4713 Or PAREXEL Health Policy and Strategic Reimbursement 5870 Trinity Parkway Suite 600 Centreville, VA 20120 888.372.2068 or 703.310.2259
Medicare Drug Benefit to Cost Less As Plan Bids Drop, CBO Report Says The Medicare Part D prescription drug benefit will cost 26 percent less from 2007 to 2013 than initially estimated, because of lower-than-projected cost of bids by private drug plans that offer the benefit and a drop in the projected number of enrollees, according to the Congressional Budget Office.In a report released January 24, CBO said the drug benefit would cost a net $382 billion from 2007 to 2013.When Congress passed the authorizing legislation in 2003, the cost was estimated to be $518 billion.Part D costs will be lower because drug plan bids for 2007 were 15 percent less than for 2006.This prompted CBO to lower its per capita estimate of providing drug coverage according to a report called The Budget and Economic Outlook: Fiscal Years 2008 to 2017. Fewer beneficiaries are expected to enroll in the benefit because they have other drug coverage.According to CBO, only 78 percent of Medicare beneficiaries will enroll in Part D coverage, 9 percent less than the 2003 estimated.About 30 million Medicare beneficiaries (70 percent) had Part D coverage for part of 2006 according to the report. The CBO report follows a January 8 announcement from the Centers for Medicare & Medicaid Services that cost of the Medicare drug benefit from 2004 to 2013 would be $189 billion lower (30 percent) than originally estimated. CBO in its report said the Part D benefit cost $32 billion in 2006.However, those costs were offset by $1 billion in beneficiary premiums and $4 billion in so-called “claw back” payments states made for Part D coverage of Medicaid beneficiaries, for a net total of about $28 billion.Part D payments will total $46 billion in 2007 and is predicted to reach $142 billion by 2017. Net Part D spending, minus beneficiary premiums and claw back payments, likely will rise from $38 billion in 2007 to $119 billion in 2017, the report said.CBO said total Medicare spending would grow by 15 percent in 2007, reaching $428 billion. Spending is only expected to grow about 5 percent in 2008 because the initial startup period of the Part D benefit will be over.Another factor slowing down 2008 spending is the result of action taken by Congress in 2006 to cancel a projected 5 percent payment cut slated for Medicare physicians in 2007.A 10 percent payment cut is now scheduled for 2008.Congress may not allow the 10 percent cut to be implemented.If current law is not changed, however, CBO said, the cut and projected 5 percent reductions through 2007 will leave doctor payments in 2017 less than 75 percent of what they will be in 2007. Annual growth in Medicare outlays will average 7.4 percent from 2008 through 2017, CBO said.Federal spending per Medicare beneficiary will grow from about $9,000 in 2007 to $13,400 in 2017, while Medicaid spending fell slightly in 2006 as Medicare began to assume the drug cost of Medicaid beneficiaries, according to CBO.CBO also projected that Medicaid spending would rise 6.6 percent in 2007 and reach 7.8 percent annually through 2017 as caseloads are expected to grow and states respond to providers’ demand for pay increases. For more information, please contact us: PAREXEL Health Policy 316 Pennsylvania Ave SE Suite 403 Washington, D.C.20003 202.546.4713 Or PAREXEL Health Policy and Strategic Reimbursement 5870 Trinity Parkway Suite 600 Centreville, VA20120
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CMS PAP Update
The Centers for Medicare and Medicaid Services updated their website recently with updated manufacturer PAP information and other links to assist in clarifying how pharmaceutical manufacturers may continue to sponsor Part D enrollees outside of the Part D benefit
Background
Based on OIG guidance in 2006, pharmaceutical manufacturers were given the option to opt to continue to assist Medicare beneficiaries that enroll in Part D after January 1, 2006 within the Part D benefit and consequently count the Part D cost-sharing assistance towards the enrollee’s true out-of-pocket (TrOOP),or to continue to make cash contributions to bona fide non-affiliated charities.
More recent CMS guidelines have given PAPs the option of continuing to assist Medicare beneficiaries that have elected to enroll in Part D to provide free drug outside of the Medicare Part D benefit, This PAP assistance would not be counted towards the beneficiary’s true out-of- pocket costs.Based on the OIG advisory guidance, the manufacturer would pose a reduced risk in violating anti-kick back laws provided that:
·the PAPs notify the PDPs which drug is being provided outside of the Plan D benefitto ensure that no payment is made by the Plan D and no costs are counted towards the TrOOP;
·the PAP provides assistance for the whole coverage year or the remainder of the coverage year upon the PAP enrollment;
·the PAP assistance remains available even though the drug assistance is periodic throughout the coverage year;
·the PAP maintains accurate records of the subsidized drug to permit the government agency to verify the drugs subsidized outside of the Plan D benefit;
·the assistance is awarded based on reasonable, uniform and consistent measures of financial need without regard to the provider, practitioners, suppliers or PDPused by the beneficiary; and
·the arrangement complies with any preexisting CMS provisions. The updates made to the CMS’ website also include coordination of benefits instructions, Data Sharing Agreement and user guide, Attestation document, and a revised CMS PAP FAQ on operating outside of the Part D benefit.The Coordination of Benefits guidance provides PAPs instruction on how to interact with Part D plans in the event they opt to assistMedicare Part D beneficiaries.
CMS emphasizes that the safest way for PAPs to successfully coordinate benefits with PDPs is via front-end data exchange with CMS.This will alert PDPs through theTrOOP facilitation process to contact the PAP to identify what drug is being provided the by the PAP to the beneficiary and set up edits so to minimize the risk of the drug being additionally reimbursed by the prescription benefit.
In order for PAPs to enter in a front-end data Sharing with CMS a Data Sharing Agreement and the Attestation document are required documents if the PAP decides to enter into an electronic data sharing agreement with CMS to receive prescription drug coverage and/or submit PAP drug utilization.Finally, CMS also posted an updated Question and Answer under their Frequently Asked Question section referencing PAPs providing assistance outside of the Part D benefit.The Outside the Benefit Q & A, summarizes all the information above and additionally illustrates PAP case scenarios for clarification.
MedPAC Says Centers for Medicare and Medicaid Services Should Provide Guidance on Part B Drug Discounts
Thursday, January 4, 2007
The latest system for reimbursing physicians for office-administered drugs for Medicare beneficiaries has resulted in savings, but the Centers for Medicare & Medicaid Services should clarify how transaction discounts are to be used to better reflect sales prices, the Medicare Payment Advisory Commission said in a report released December 29.CMS “has offered no specific guidance on how bundled discounts should be allocated,” the report said.“The agency could say that the average sales price (ASP) methodology is accurate by clarifying rules about the distribution of bundled discounts according to manufacturer reporting requirements.”
According to Impact of Changes in Medicare Payments for Part B Drugs, CMS should make sure guidelines for allocating discounts are clear and that manufacturers can implement them in a timely manner.A random audit system could be used in which manufacturer contracts are compared to reported ASPs, the report said.ASP is based on sales data submitted quarterly by manufacturers.
The ASP system was mandated by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, which also required two MedPAC reports.The first report dealt with drugs used by oncologists.This second report studies Part B drug use by urologists, rheumatologists, and infectious disease specialists.
The current report recommends that CMS clarify ASP reporting requirements for bundled products to make sure the calculations distribute discounts to reflect the transaction price for each drug.The commissioners voted on the recommendation in December of last year.
A bundled sale entails a manufacturer selling two products for a single price or providing a discount for one product depending on the purchase other products.The bundled discounts can lower the ASP reimbursement rate and also impact the choice of a drug purchase.This recommendation could increase payments for some drugs and decrease payments for others.
CMS can reflect the contingencies in the contract when clarifying the rules about the way bundled discounts should be allotted.According to the report, another option is to divide bundled discounts in proportion to the sales of each drug sold under the bundled arrangement.“This option would parallel bundling requirements under Medicaid and be easier to administer, but might not capture possible discounts,” the study said.
As part of the formal recommendation, the commissioners noted the importance of CMS monitoring providers’ acquisition costs regularly to ensure they can purchase necessary drugs at the payment rate.According to the report, most physicians can still buy most drugs at the Medicare payment level, but margins are slim.Therefore, some drugs cannot be purchased at the payment rate.
Switching to the ASP system for reimbursement resulted in substantial price savings on nearly all drugs, the report said.This was not affected by increases in the volume of drugs used or the substitution of newer more expensive drugs.From 2004 to 2005, when the payment system changed to ASP from one based on average wholesale price (AWP), Part B spending fell from $10.9 billion to $10.1 billion.Also in the report, the commissioners suggested changing to a competitive acquisition program (CAP) initially meant as an alternative for acquiring Part B drugs.Physicians could either receive the drugs through a vendor or purchase them on their own and bill Medicare.
The report suggested that Congress let physicians receive some drugs through the CAP program without requiring them to order all their covered drugs through the vendor.This could create a safety net for physicians who are not able to purchase certain drugs at the Medicare payment rate.
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Democrats Detail Prescription For Lowering Drug Prices Thursday, January 4, 2007 Legislation to allow the Secretary of Health and Human Services to negotiate prescription drug prices for the Medicare Part D program is scheduled to be on the House floor January 12. Under this bill, the secretary could choose to limit his price negotiations to just a handful of drugs considered to have high costs and still fulfill his obligations, according to Democratic talking points circulating to Members of Congress.The document cites that type of targeted action taken by former HHS Secretary Tommy Thompson when he successfully talked drug companies into giving the government lower prices for Cipro after the 2001 anthrax attacks. The legislation will carry language prohibiting HHS from restricting access to certain medicines.That provision is meant to ease Republican concerns that government price negotiations would lead to a list of certain drugs being covered by Medicare while others were not.In an attempt to keep pressure on the agency, HHS would be required to report to Congress on the agency’s activities by June 1 and Dec. 1. Republicans argue that no cost savings could be garnered without formularies that would restrict access to drugs.If the HHS program encourages the use of mail-order drugs the way current price negotiation does in the Veterans Affairs Department, small drug stores could be put out of business, according to Republican staff.The current legislative draft is only three pages long, and Democratic aides said there is no way to determine the savings derived from the new HHS program.Republicans plan to point out any discrepancies between the Democrats’ election platform and the actual bill.They might be able to use the upcoming vote as a means for negative advertisements against Democratic candidates in the next election. For more information, please contact us: PAREXEL Health Policy 316 Pennsylvania Ave SE Suite 403 Washington, D.C.20003 202.546.4713 Or PAREXEL Health Policy and Strategic Reimbursement 5870 Trinity Parkway Suite 600 Centreville, VA20120 888.372.2068 or 703.310.2259
Proposed Drug Reg Would Chop $8.4 Billion in Medicaid Outlays
Tuesday, December 19th, 2006
The Centers for Medicare and Medicaid Services (CMS) has announced a proposed rule that would chop $8.4 billion over five years from Medicaid spending.The proposal would change the way limits are calculated on payments by the federal government to state Medicaid agencies for classes of drugs in which a generic is available.
The proposal would revise the method for calculating the limit known as the “Federal Upper Limit” (FUL).The FUL would be set at 250 percent of the average manufacturer price (AMP) of the least costly therapeutic equivalent of the prescribed drug.The FUL is determined by published drug prices.Under the proposal, the secretary of the Department of Health and Human Services would have to publicly post AMPs for drug classes on the Web every month.
States would still be authorized to set reimbursement levels for the drugs involved and the amount to be paid to pharmacists in dispensing fees.They may pay above or below the FUL as long as overall payments for drugs in the class involved do not exceed an annual aggregate cap.State reimbursement levels can vary by region.
The budget savings law (P.L. 109-171) signed in February by President Bush requires that a final version of the regulation be published by July 1, 2007.Community pharmacists said they would bear the burden the cuts will bring about and that in many cases they would have to drop out of the Medicaid program.
According to Bruce Roberts, executive vice president and chief executive officer of the National Community Pharmacists Association, under the administration’s proposal, pharmacists would be losing an average of $3 to $4 for every generic prescription dispensed.“More than half of all prescriptions dispensed by retail pharmacies are for generic medications, so losing money on every one dispensed to a Medicaid patient is a recipe for disaster,” said Roberts.He added that the reimbursement change would force many community pharmacists out of the Medicaid program, reducing the access to lifesaving medications for Medicaid patients.
PAREXEL Background Brief Medicare Part D: A Brief Overview
November 10, 2006 Background
The Medicare Prescription Drug Improvement and Modernization Act of 2003, was signed by President Bush on December 8, 2003.This legislation provides seniors and disabled individuals on Medicare with a prescription drug benefit for the first time in Medicare’s history.
As a result of the legislation, Medicare beneficiaries, regardless of income, health status, or prescription drug usage, have access to prescription drug coverage.Coverage began on January 1, 2006 following a transition period that employed pharmacy discount cards.
Coverage Gap
Under the standard plan the government pays for 75 percent of drug costs only until the beneficiary and the government together have spent $2,250 for the year.At that point, beneficiaries must pay 100 percent of costs until they have spent a total of $3,600 of their own money.Then the federal subsidy resumes, paying 95 percent of any additional expenses.
This coverage gap, known as the “doughnut hole,” was one of the most contentious elements of the 2003 legislation that created the new benefit.It ends federal payments for a person’s drug purchase once an annual spending limit is reached, resuming them after the beneficiary has spent thousands of dollars out of pocket.Proponents saw this as a way to help all beneficiaries, especially those with catastrophic drug costs, without “breaking the bank” in a federal program that is expected to cost the Federal treasury billions of dollars over the next decade.
However, millions of older Americans are now for the first time confronting the temporary break in their Medicare drug coverage that will require them to pay the full cost of their prescriptions or face the painful prospect of going without their medications.
On September 21, 2006, a report commissioned by Democrats in the U.S. House of Representatives said that in 26 states, more than 90 percent of beneficiaries are enrolled in drug plans that have a gap in coverage.The report also found that 84 percent of private drug plans offered nationwide have a coverage gap.The study excluded beneficiaries who enrolled in Medicare Advantage coverage – which provides both health and drug benefits – and dual eligibles who receive low-income subsidies.On that same day, America’s Health Insurance Plans, a trade group representing health insurers, said health insurance plan data shows that about 10 percent of Medicare drug plan beneficiaries have reached the gap.
Presently, Part D beneficiaries who enroll in the program after their first month of eligibility are forced to pay a one-percent per month fee on top of their premium each month.Democrats, as well as many Republicans, are in favor of waiving the late-enrollment fee for the first year of the program, recognizing the challenges in its initial implementation.
Rep. Henry Waxman (D-CA), Ranking Democrat on the House Government Reform Committee, recently released a policy paper highlighting the potential savings from proposed changes to the Part D program.Specifically, Rep. Waxman proposed to: (1) reduce drug prices by directing the federal Medicare program to negotiate with drug manufacturers on behalf of beneficiaries; (2) use the drug price savings to eliminate the doughnut hole; (3) extend the May 15 deadline to allow beneficiaries who missed the deadline to sign up for the benefit without penalty; and (4) simplify plan choices and designs by authorizing the federal Medicare program to offer a standard federal plan.Medicare Part D enrollment for 2007 begins November 15 through December 31.
Coverage to close the Medicare drug benefit’s “doughnut hole” will be harder to find and cost more in 2007, according to a Families USA report that the Centers for Medicare and Medicaid Services (CMS) labeled “a distorted and incomplete picture” of coverage choices offered to beneficiaries.The report defines “meaningful coverage” as coverage for a list of 25 drugs most commonly prescribed to seniors in 2004 in a Pennsylvania pharmaceutical assistance program, some of which are listed twice but by different dosage amounts.The analysis states that of the 25 drugs, 18 are not available in a generic form, and therefore are likely not covered because most plans that offer coverage in the gap cover generic drugs, not brand-name drugs.
The report predicts that the number of beneficiaries without access to “meaningful” coverage in the gap will rise from 375,000 this year to 6.6 million in 2007.These numbers include all Medicare beneficiaries with drug coverage as of June 2006.It does not include “dual eligibles” which are beneficiaries who qualify for both Medicare and Medicaid but now receive their drug coverage in the Medicare drug benefit.Beneficiaries who qualify for the low-income subsidy are also not included.Families USA researchers conclude that where comprehensive gap coverage is offered, premiums for the lowest-priced Medicare drug plans will increase by 87.4 percent, from a median monthly price of $55.08 in 2006 to $103.20 in 2007.
Complaints
As might be expected in starting a new program of this magnitude, the CMS has received complaints from Medicare beneficiaries enrolled in prescription drug plans. The complaint rate for stand-alone prescription drug plans has averaged about 2.5 per 1,000 beneficiaries, and the complaint rate for Medicare Advantage prescription drug plans averaged about 1.6 per 1,000 beneficiaries.
Most of these complaints are about enrollment or disenrollment in a plan, difficulty in getting needed drugs, and how much certain drugs cost or incorrect co-pays at the pharmacy counter.Since the start of this year, more than 1,000 compliance actions have been taken against drug plans.In most cases, drug plans have taken corrective action, according to CMS.Sometimes when plans did not resolve issues promptly, CMS took further enforcement action to achieve compliance, such as restricting plans’ ability to enroll beneficiaries.
Specifically, CMS issued 651 warning letters to plans for topics such as posting errors on Medicare’s “Personal Plan Finder.”There have been 152 notices of non-compliance for problems such as failing to meet call center performance requirements, and 318 requests for specific business plans on topics such as improving call center performance.CMS removed information about the drug plan from the Medicare plan finder in 75 cases where the plans moved too slowly.
CMS is taking actions to find and fix any problems that beneficiaries may have with their drug plan delivering the level of service required by Medicare.Addressing the situation in late summer of 2006, then CMS Administrator Mark B. McClellan, M.D., Ph.D., said “we are filling millions of prescriptions a day at a much lower cost than expected, and we will continue to maintain quality service throughout the Medicare program.”
Drug Plan Finder
CMS reported that changes to Medicare’s “Drug Plan Finder” will make it easier for beneficiaries to compare plan features such as price, benefit, and out-of-pocket costs.Complaint information about drug plans also will be posted on the drug plan finder.The 2007 version of the “Medicare & You” handbook is now being sent to beneficiaries and will explain Medicare coverage.
Nursing Homes and Exceptions to Coverage Policies
Pharmacists and doctors in the nursing home sector say they can’t keep absorbing the financial and operational losses they are experiencing under the Medicare Part D prescription drug benefit.They have called on federal officials to change the program.Pharmacists say Medicare officials should reduce their burdens by allowing them to counsel nursing home residents or their families on which Part D plan to select.Doctors say the paperwork and procedures involved in obtaining exceptions to the coverage policies of Part D plans must be simplified.
Restrictions in marketing guidelines issued by CMS bar pharmacists, doctors and nursing home staff from helping residents compare, pick and enroll in Part D plans.CMS is concerned that lifting these restrictions would cause nursing homes to steer patients into plans that are most financially beneficial to the facilities at the expense of beneficiary needs.Opponents feel the restriction does not best serve the frail mental and physical condition of Medicare enrollees in nursing homes – about one million of whom are mentally impaired.
The Washington Legal Foundation has issued a position paper saying the CMS marketing guidelines violate free speech by restricting pharmacies and nursing homes from giving advice on which plan to join.The paper urged CMS to consider withdrawing the restriction.
Access to Medications
Part D plans vary widely in the access they allow to medications.According to a recent survey by the Kaiser Family Foundation, thirteen of thirty-five Part D plans serving nursing home residents used various “utilization management” tools that limit access to numerous covered drugs.Those plans attempted prior authorization, in which a physician must apply for an exception for an individual patient, for 40 percent or more of their covered medications.Utilization management was ranked by pharmacists as the problem they encountered most often, followed by problems getting through the telephone hotline run by the plans and by Medicare, and problems confirming which drugs are on a formulary.
Even if seniors have carefully researched a Medicare drug plan, they can still encounter obstacles in obtaining medications.Even though substantial majorities of pharmacists (86 percent) and physicians (71 percent) believe that the prescription drug law is helping people on Medicare save
money on their medications, 91 percent of pharmacists and 92 percent of doctors feel it is too difficult to understand, according to the Kaiser Family Foundation.A majority in both
professions report that Medicare beneficiaries who they see are encountering problems in getting their medications, sometimes with serious consequences.
Pharmacy providers are legally obligated to provide the drug ordered by the doctor while having to deal with Part D plans that may or may not cover the medication.Pharmacies currently provide the drug but then approach the plan for reimbursement.Nevertheless, denied claims and providing drugs indefinitely is still considered a serious problem.
While pharmacists have been involuntarily moved to the front lines in Part D, physicians have been less involved and also report that they do not understand the benefit as well as pharmacists.According to a recent survey, sixty-four percent of doctors say they understand Part D “not too well” or “not well at all.”Many attribute their lack of understanding to a dearth of information,
with 78 percent reporting that they have “just some of the info” or “not enough info” to help their Medicare patients understand how the new drug benefit will affect them.
A requirement for prior authorization – used in many drug plans -- is one of several barriers that can delay or deny access.Others include “step therapy” requirements, and “volume limits.”The use of these procedures means that even if seniors have carefully researched a Medicare drug plan, they can still encounter obstacles in obtaining medications.
Formulary
Most Medicare drug plans restrict access to formulary drugs.The Medicare data show that 97 percent of plans place either prior authorization or step therapy requirements on at least one of the 100 most popular drugs, with the average plan restricting access to over 10 percent of the popular drugs listed in its formulary.Some plans restrict access to over 40 of the 100 most popular drugs.
Seniors cannot make a fully informed choice about a Medicare drug plan without knowing exactly what the plans will do.Although the use of these restrictive tactics is common in health insurance plans, it is nearly impossible for seniors to learn their terms until after they have subscribed and been denied drug access.While private insurers already offering the Medicare Part D prescription benefit are expected to offer fewer plan choices in 2007, the number of companies has increased from 9 to 17, Bush administration health officials said.
Outlook For The Future
Some change to the program is likely in next the few years.How much change will be determined by the outcome of the mid-term elections November 7.Democratic leaders have promised to push for negotiated drug purchasing if they win control of the House or the Senate.
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) bars the federal government from directly negotiating prices for Part D drugs with pharmaceutical companies or interfering in negotiations between drug manufacturers and Part D plans.Democrats indicate they would attempt to repeal this provision to grant the Secretary the authority, and impose the obligation, to negotiate lower drug prices for Medicare beneficiaries.
Democrats also express their desire for greater oversight of the Medicare Part D program.They propose careful government scrutiny of how plans are chosen, how they are marketed, and the information disseminated to beneficiaries and they have called for simplification of private sector plan options and expansion of government alternatives for coverage.With continued federal deficits projected into the future, attempts to fill the “doughnut hole” will a heavy challenge for the Congress.
For more information, please contact us: PAREXEL Health Policy 316 Pennsylvania Ave SE Suite 403 Washington, D.C.20003 202.546.4713 Or PAREXEL Health Policy and Strategic Reimbursement 5870 Trinity Parkway Suite 600 Centreville, VA20120 888.372.2068 or 703.310.2259
2007 Medicare Drug Formularies
The Centers for Medicare and Medicaid Services (CMS) released an analysis October 20 comparing Medicare drug plan formularies for 2007 and 2006, concluding that more drugs will be covered next year but that limits on their use will be somewhat greater. For the drug-only private plans offered to beneficiaries in the traditional fee-for-service program, formularies for 2007 show a 13 percent increase in the number of drug “items” covered. They also show a slightly larger number of drugs requiring “step therapy” before they can be used. According to the CMS analysis, these requirements encourage people to try proven, cost-effective drugs first.
However, the formularies for 2007 also indicate a small decline in the percentage of covered drugs with “quantity limit restrictions.” CMS said the limits are applied to some drugs with safety concerns so they are used in recommended doses for things like mental health conditions and treating severe pain.
Next year’s formularies for Medicare managed care plans offering prescription drug coverage show a more than 10 percent increase on average in the number of covered drugs and a slightly higher rate of step therapy. Among the drugs used most by seniors shows an 8 percent increase in these products covered by the drug-only plans and a 6 percent increase in the most popular Medicare managed care plans. For the drugs in these plans, there are slight increases in step therapy, prior authorization and quantity limit requirements, CMS said.
Each prescription for a prior authorization drug must be approved by the drug plan in order for it to be covered. CMS notes that if a person with Medicare is taking a Part D drug that is not on the plan’s formulary, “a required transition period allows the person to get a temporary supply of the drug while they arrange for a different prescription or ask for an exception.”
Medicare Rx Plan Premiums Same For 2007, as Benefit Offerings Grow
Average Medicare Part D drug plan premiums will remain about the same in 2007, and beneficiaries in many states will have more enhanced benefit plan choices than in 2006, according to plan data released Sept. 29th by the Centers for Medicare and Medicaid Services (CMS). CMS also said that a majority of low-income beneficiaries, including dual eligibles who were auto-enrolled in plans this year, would be able to keep their current plans for a zero-dollar premium if they were satisfied with their coverage. Prescription drug plans are required to bid at or below the low-income subsidy threshold to be eligible to provide zero-dollar premium benefits to low-income enrollees.
Monthly premiums for the 2007 benefit year will, as anticipated, average about $24, CMS said, with 83 percent of current enrollees having the option to switch to a lower-premium plan than that for which they are signed up now. Furthermore, CMS said beneficiaries would have more plan options in which coverage is provided through the so-called doughnut hole, with some plans offering coverage for brand-name drugs as well as generics. CMS said some plans will offer gap coverage at premiums less than $40 per month, and a majority of such plans would offer premiums below $50.
Health and Human Services Michael O. Leavitt attributed stable premiums and greater benefit offerings to a successfully competitive bidding process. CMS Administrator Mark B. McClellan said seniors helped fuel competition in 2007 with their positive response to and positive experience with the drug benefit in 2006.
“With next year’s drug coverage, we want to build on the high level of beneficiary satisfaction in 2006 by strengthening the benefit in key ways,” McClellan said. Because of robust competition and smart choices by seniors, plans are adding drugs, and adding more attractive options with better coverage.”
According to America’s Health Insurance Plans President and Chief Executive Officer Karen Ignagni, Medicare beneficiaries and taxpayers would continue in 2007 to benefit from “robust competition and health insurance plans’ innovative tools and techniques.” New enrollees can begin signing up for Part D coverage on November 15th, during the open enrollment period that will end December 31st. McClellan also noted that current Part D beneficiaries also could switch plans during the open enrollment period.
CMS had told plan sponsors earlier in 2006 that they should limit 2007 offerings to two to three plans per region. Even so, beneficiaries will continue to have as many as 50 to 60 plans from which to choose in some states because of the growth in the number of Part D plan sponsors. In addition, the number of national plans went from 9 to 17 giving seniors even greater choices than in the benefit’s first year. Beneficiaries would have greater access in 2007 to Medicare Advantage (managed care) plans with prescription drug plan benefits, with average monthly premiums of about $82.
The growth in plan offerings and shorter enrollment period in 2007 compared to 2006 will create confusion for beneficiaries, Families USA Executive Director Ron Pollack said September 29th in written comments. He thinks the confusion is about to get worse. Pollack also said that the very low-cost plans offered in 2006 (those below $10) had raised premium rates significantly for the 2007 benefit year. CMS’s online Drug Plan Finder – designed to help beneficiaries choose a Part D plan based on their individual circumstances – will be available by mid-October.
Drug Benefit Improves Access to Cancer Drugs, Health Affairs
Study Says
The Medicare prescription drug benefit has expanded access to many cancer drugs, including brand-name drugs, with plans charging relatively low co-payments. However, some prescriptions require prior authorization, which could limit beneficiaries’ access to needed medications, according to a study published last week in the journal Health Affairs.
Cancer outpatient drugs and biological products administered by a physician used to be covered under Medicare Part B, which deals with physician services. Oncologists billed almost 75 percent of Medicare-allowed charges for physician-administered drugs in 2003.
When implementing the drug benefit (P.L. 108-173) this year, the Centers for Medicare and Medicaid Services required participating prescription drug plans (PDPs) to cover “all or substantially all” drugs in certain classes, including anti-neoplastics, which are made up of cancer drugs. The study indicates the CMS requirement was put in place to prevent plans from discriminating against beneficiaries with certain conditions.
This study was conducted by Jennifer Bowman of Avalere Health and colleagues. It examined drugs offered by PDPs in the anti-neoplastics and hormonal classes, including oral, injection, topical, elixir or suspension cancer drugs. The study then analyzed plans’ coverage of the drugs using the February 1st CMS Prescription Drug Plan Formulary and Pharmacy Network Files. It found that virtually all generic cancer drugs were covered and 70 percent of brand-name drugs were covered, but some required prior authorization, in which a physician must apply for an exception for an individual patient. Co-payments ranged from $5 to $40 for the most frequently used cancer drugs found on formularies.
“The fact that these drugs are available and affordable to almost all patients under Part D is a good thing,” said Bowman. “But patients’ access to the drugs could be thwarted both by plans’ ability to require physician authorization when patients go to buy drugs and by the gap in prescription coverage known as the ‘doughnut hole.’”
Under the Medicare drug benefit, Medicare pays 75 percent of drug costs up to $2,250 after an initial $250 deductible and then pays nothing until the drug expenses exceed $5,100. The impact of the doughnut hole on beneficiaries’ use of medications has not been studied but is an important area of research. Through a combination of government regulation and market forces, Medicare beneficiaries currently have access to nearly all of the cancer drugs identified in the study with fairly low cost-sharing.
Health Affairs also published a study conducted by the Rand Corporation. This study looked at how increasing co-payments for specialty drugs used to treat cancer, multiple sclerosis and other diseases are not likely to reduce costs to employers and health insurance plans.
The study examined pharmacy and medical claims from 55 health plans used by 15 large employers between 2003 and 2004. It found that increasing co-payments for traditional medicine reduced drug use by 30 to 50 percent. Usage was reduced by 1 to 21 percent when co-payments for specialty drugs were increased
September 2006 -Medicare Will Urge Seniors to Pay Premiums Directly to Rx Plans for 2007
For the 2007 Medicare drug plan enrollment period, the Centers for Medicare & Medicaid Services will begin encouraging beneficiaries to just pay plan premiums directly to their insurers instead of choosing a monthly deduction from their Social Security payments. The default payment option on the Part D drug benefit enrollment Web tool would be changed from the Social Security deduction option, to the direct payment option. This default was set this year for the monthly Social Security deduction, meaning beneficiaries had to actively change the setting if they wanted direct premium payments to plans. The change does not mean plan premium deductions from Social Security payments will end. The deduction option has had lots of problems with some beneficiaries reporting no premium deductions, while others reported incorrect deductions, and continuing deductions even after they had withdrawn from a plan. Senate Finance Committee Chairman Charles E. Grassley (R-IA) and ranking committee member Max Baucus (D-MT) met with CMS Administrator Mark B. McClellan and Social Security Administrator Jo Anne Barnhart September 7th to discuss the latest in Part D premium deduction errors that resulted in $50 million in erroneous premium refunds to more than 200,000 Part D enrollees who had signed up for automatic plan premium deductions from their monthly Social Security payments. CMS said the problem was caused by a data problem between the Medicare agency and the Social Security agency, and has said it would allow beneficiaries to go back to erroneous refunds over time. For more information contact Christy McMann @ 703.310.2259
September 2006 -Ryan White HIV/AIDS Treatment Modernization Act
The Ryan White HIV/AIDS Treatment Modernization Act amends the Public Health Service Act to maintain a metropolitan area's eligibility to receive an AIDS emergency relief grant until such area fails to meet eligibility requirements for three consecutive years. It amends the formula for awarding grant funds to consider the number of HIV/AIDS (currently, AIDS) cases/ Requires the return of unexpended grant funds to the Secretary of Health and Human Services or the submission of an application for the use of such funds/ Directs grantees to expend not less than 75% of grant funds received on core medical services/ Allows the Secretary to grant waivers to such requirement under certain circumstances/ Establishes a transitional grant program for metropolitan areas with lower numbers of AIDS cases/ Requires the Secretary to develop and maintain a list of clas of core AIDS Drug Assistanc Program (ADAP) antiretroviral medications/ Requires states to ensure that such medications are the minimum required treatments to be included in any ADAP program/Limits the amount by which a grant to an eligible metropolitan area can decrease each year/ Provides for supplemental grants to states that demonstrate a need for supplemental financial assistance/ Allows the Secretary to award grants to assist states in providing eligible individuals appropriate access to pharmaceutical therapies/ Establishes a grant program for the provision of family-centered care involving outpatient or ambulatory care for women, infants, children, and youth with HIV/AIDS and provides for activities to evaluate and address the disproportionate impact of HIV/AIDS and disparities in access, treatment, care, and outcome on racial and ethnic minorities.
August 2006 - CMS Releases Final Marketing Guidelines for Medicare Part D Plans
The Centers for Medicare & Medicaid Services (CMS) released the final 2007 Marketing Guidelines for Medicare Part D plans. These guidelines reflect feedback from the recent public comment period, changes in policy, and clarifications in policy interpretations. Specific updates and policy clarifications included issues that address co-branding, the use of marketing personnel, how plans submit marketing materials to CMS for review, member identification card requirements, and other value-added items and services. For additional information on the guidelines, please contact Christy.McMann@parexel.com
July 2006 - Democrats in Senate Call for Relief From “Doughnut Hole” Gap in Medicare Coverage
Sen. Bingaman (D-NM) is sponsoring a measure, S. 3650, that would allow costs incurred by safety-net hospitals, federal health prograpprograms and pharmaceutical manufacturer-sponsored Patient Assistance Programs to count toward what needs to be spent to get out of the hole. CBO projects the gap in 2013 is going to be $5,066. For more information on proposals regarding the Doughnut Hole Coverage Provision, contact Christy.McMann@Parexel.com
July 2006 - Request for Changes to Part D
Senate Finance Committee Chairman Chuck Grassley (R-Iowa) and Ranking Democrat Max Baucus (Mont.) asked for certain changes to the Part D program involving drug price information to pharmacies. Also signing the letter were a bipartisan group of 19 other Senators. Recommendations include requiring that drug plans disclose maximum allowable costs to pharmacies, ensuring that plans are complying with requirements for filling emergency prescriptions at long-term care pharmacies, and providing access to longer drug supplies at drug stores. For more detail contact: Christy.McMann@parexel.com
May 2006 HHS Inspector General to focus on Part D
According to the Inspector General of the Department of Health and Human Services, the new Medicare Part D drug benefit presents numerous opportunities for fraud and abuse. As a result, the Office of the Inspector General (OIG) will focus more than 18 investigative audits on Part D in the coming year. The OIG's audits, detailed in its workplan posted on the organization’s Web site, will look at everything from how a drug formulary is constructed to beneficiary satisfaction in conducting a risk assessment of Part D. The OIG has identified five areas of potential fraud that currently exist in the Medicaid drug program but are expected to be magnified under the Medicare drug benefit. For more information contact: Christy.McMann@parexel.com
May 2006
FY 2007 IPPS proposed rule
CMS has proposed an overhall of the diagnosis-related group (DRG) reimbursement system. For details on the FY 2007 IPPS proposed rule contact Christy McMann @ 703.310.2259
April 2006 - CAP Effective July 1, 2006
Overshadowed by the Medicare Part D benefit, CMS is on target to implement CAP July 1, 2006. Vendor selection for the program requires that the vendor be licensed in all 50 states, able to supply the 181 covered drugs and have previously distributed Part B drugs. It is expected that physicians will be screening and selecting their CAP vendor as early as May 2006. For more information on CAP contact Christy McMann at 703.310.2259.
March 2006 -Overview of Latest MedPAC Report to Congress Summary:
Congress charges the Medicare Payment Advisory Commission (MedPAC) with reviewing Medicare payment policies and making recommendations each March. The new MedPAC report focuses on improving Medicare payment accuracy and calibrating payment adequacy to the efficient provider. The Commission reiterates its proposals to measure resource use and improve quality, to attain better value for the Medicare program. The commission reviewed Medicare fee-for-service payment systems for eight sectors. For more information on this topic contact: Christy McMann at christy.mcmann@parexel.com
Legislative and Budget Outlook for Fiscal Year 2007
This year, roughly two-thirds of the federal budget is allocated to entitlements and payment on the national debt, items that are not easily changed. Include defense and homeland security in that equation and that leaves only one-sixth of the budget subject to annual review.
Centers for Medicare and Medicaid Services (CMS)
In an effort to control some of those entitlement costs, the President is proposing that Congress implement measures to curb Medicare costs. The budget calls for reducing projected Medicare payments to hospitals and other health care providers by $35.9 billion over the next five years, and will seek further increases in Medicare premiums for high-income people, beyond those already scheduled to take effect. President Bush’s budget calls for substantial savings in the Medicare program in an attempt to rein in growing costs. His budget proposes a legislative package that would save $2.5 billion in FY2007 and $35.9 billion over the next five years. Most of the proposed savings follow the recommendations of the Medicare Payment Advisory Commission (MedPAC), including a zero percent payment update for skilled nursing facilities, home health agencies and inpatient rehabilitation facilities. The proposal also calls for an update of the market basket minus 0.45 percent for hospitals, and a reduction for hospice and ambulance services by 0.4 percent for 2007 – 2009. No changes are proposed for physician payments; under current law, those payments will be cut more than 4 percent in 2007. In the meantime, CMS will continue to work to expand pay-for-performance initiatives.
For a complete overview of the budget highlights contact: PAREXEL at 888.372.2068
One Month Progress Report on Medicare Prescription Drug Benefit
On February 1, 2006, The Department of Health and Human Services released a one month Progress Report on the Medicare Prescription Drug Benefit. The report describes the positive features of the program, areas for improvement, and future program developments. Although the exact evolution of the Medicare drug benefit is unpredictable, PAREXEL has been closely monitoring the Medicare Part D benefit in an effort to assist clients and patients during this time of transition.
For more information on the Medicare Part D Benefit contact PAREXEL at 888.372.2068
Pharmaceutical Assistance Programs and the New Medicare Prescription Drug Benefit
Janurary 2006 -over 42 million Americans now have access to the federal Medicare Part D prescription drug coverage that went into effect on January 1st. A new report by the National Conference of State Legislatures details how states have redesigned their existing pharmaceutical programs to coordinate with the federal plan.
State Pharmaceutical Assistance Programs in 2006: Helping to Make Medicare Part D Easier and More Affordable is online at www.ncsl.org/programs/health/SPAPCoordination.htm. The report shows that state approaches to combine their programs with Medicare Part D fall into four categories: enhancing Medicare with state funds that once paid for state prescription drug programs; redirecting some state-funded prescription drug services to people not covered by Medicare; eliminating state benefits that will now be covered by the federal program; and terminating state programs.
At least 16 states are supplementing Medicare Part D with funding that used to pay for their own programs. Another five – Alaska, Hawaii, Kentucky, Montana and New Hampshire – have put in place new "wrap-around benefits" to plug some of the gaps in the federal program. More than 1.5 million beneficiaries are eligible in these 21 states. Wrap-around programs often pay all or part of the beneficiary’s $250 annual deductible, $32 monthly premium or gaps in coverage and copays that can add up to $2,500. Some also cover products not covered by Medicare, among other approaches.
Several states have shifted resources to provide coverage for populations that don’t qualify for Medicare. For example, Arkansas, Illinois, Maryland, Montana, New Mexico and Oklahoma have enacted new plans aimed at adults under 65 or families.
Almost all programs reduced or eliminated those state benefits that are now available through the federal program. Most enrollees did not see their coverage reduced as a result. As of January 1, Part D beneficiaries with annual incomes below $13,000 have no premiums or coverage gaps. Wyoming will drop from its program all those who are eligible for the federal counterpart. It will continue to cover those state enrollees who aren’t eligible for Medicare.
Five states have terminated their state-funded programs, which were generally similar to the federal one. They are Florida, Kansas, Michigan, Minnesota and North Carolina.
2006 Medicare Physician Payment Rates for Physician-Administered Drugs
December 19, 2005. The Centers for Medicare and Medicaid Services (CMS) released the final first quarter 2006 Medicare physician payment rates for physician-administered drugs. The file contains the actual Medicare allowables that will be used to pay for Part B-covered drugs.
For more information on the 2006 Medicare Physician Payment Rates
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