Issues for Part D Compliance

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1 HCCA- MEDICARE PRESCRIPTION DRUG PART D COMPLIANCE CONFERENCE Issues for Part D Compliance Craig Miner, RPh, JD Division of Drug Plan Policy Babette S. Edgar, Pharm.D., MBA Division of Finance and Operations

2 Topics Part D Drugs Exclusions The Formulary Review Process The Formulary Maintenance Process 2

3 Part D Drugs 3

4 What is a Part D Drug? ( ) Rx Only Drugs approved by FDA for safety and efficacy as described in 1927(k)(2) Biologicals as described in 1927(k)(2) Insulin and medical supplies associated with the injection of insulin Vaccines Used for Medically Accepted Indications 4

5 Medically Accepted Indications FDA Approved or Off-Label if supported by citation in either: AHFS USP-DI, or DRUGDEX 5

6 Exclusions 6

7 Exclusions Drugs or classes of drugs, or their medical uses, which may be excluded under 1927(d)(2) (except smoking cessation agents) Any drug for which, as prescribed and dispensed or administered to an individual, payment would be available under Medicare part A or part B for that individual 7

8 1927(d)(2) Exclusions Agents when used for anorexia, weight loss, or weight gain; Agents when used for cosmetic purposes/hair growth; Agents when used for symptomatic relief of cough & colds; Prescription vitamins & mineral products (except prenatal vitamins & fluoride preparations); Nonprescription drugs; Covered outpatient drugs when manufacturer seeks to require associated tests or monitoring as a condition of sale; Barbiturates; Benzodiazepines 8

9 1927(d)(2) Exclusions and Combination Products Commercially Available--Products that contain at least one Part D drug component are part D drugs when used for a "medically accepted" indication, unless CMS makes a determination that such product, as a whole, belongs in one of the categories of drugs excluded from coverage under Part D Extemporaneously Compounded--Only Part D components are Part D drugs 9

10 1927(d)(2) Exclusions State Medicaid Programs my continue to provide coverage and receive Federal Match Part D plans may provide supplemental coverage for excluded drugs (except OTCs) not subsidized by CMS 10

11 Medicare Parts A and B Medicare Part A (Hospital Insurance) Inpatient hospital, hospice, home health, SNF coverage Medicare Part B (Supplemental Medical Insurance) Physician and hospital outpatient services, some drugs and biologics, DME, glucose test strips, other medical services 11

12 Exclusions based upon Medicare Part B Coverage Drugs furnished incident to a physician s service Separately billable ESRD drugs (EPO) Durable Medical Equipment Supply drugs Drugs covered as supplies integral to a diagnostic or therapeutic service Drugs used in immunosuppressive therapy Certain Vaccines Parenteral Nutrition Oral Cancer Drugs Clotting Factors Antigens IVIG 12

13 Formulary Review 13

14 Pharmacy & Therapeutics Committee Requirements What is a P&T committee? All formularies must be developed and revised by a P&T committee Membership of the committee - Majority of members who are practicing physicians and/or practicing pharmacists - At least one practicing physician and at least one practicing pharmacist who are independent and free of conflict relative to sponsor, plan, pharmaceutical manufacturers - At least one practicing physician and one practicing pharmacist who are experts regarding care of elderly or disabled individuals 14

15 Formulary Review: Rationale MMA requires CMS to review Part D formularies to ensure: beneficiaries have access to a broad range of medically appropriate drugs to treat all disease states formulary design does not discriminate or substantially discourage enrollment of certain groups 15

16 Guiding Principles for Formulary Review Relying on Existing Best Practices Provide Access to Medically Necessary Drugs Flexibility Administrative Efficiency 16

17 Formulary Review: Approach Ensure the inclusion of a broad distribution of therapeutic categories and classes Utilize reasonable benchmarks to check that drug lists are robust Review tiering and utilization management strategies Identify potential outliers at each review step for further CMS investigation Obtain reasonable clinical justification when outliers appear to create access problems 17

18 Formulary Review Checks Review of USP Categories and Classes Comparison to AHFS Categories and Classes Two Drugs per Category and Class USP Formulary Key Drug Types Tier Placement Widely Accepted Treatment Guidelines Therapeutic Categories or Pharmacologic Classes Requiring Uninterrupted Access Common Drugs for Medicare Population Quantity Limit Review Prior Authorization Review Step Therapy Review Insulin Supplies and Vaccines Review Long-Term Care Accessibility Review 18

19 Review of Categories and Classes USP categories and classes will satisfy a safe harbor. Available at: mg/finalmodelguidelines pdf Alternative classification structures will be compared to USP and other commonly used classification systems (AHFS or other) Two drugs in each category/class 19

20 USP Formulary Key Drug Types Review drug list for inclusion of at least one drug in each of the Formulary Key Drug Types identified by USP. Available at: Third column in USP document Most best practice formularies contain one or more of these agents 20

21 Tier Placement Review tier placement of drugs to ensure that access is not discriminatory Looking for at least one drug to be placed in a lower tier for each drug class Specialty tier is exempt from this requirement 21

22 Widely Accepted Treatment Guidelines Review drug list for inclusion of drugs/drug classes from widely accepted treatment guidelines - Inclusion based on best practice - Serves as a check, not an exhaustive list 22

23 Therapeutic Categories or Pharmacologic Classes Requiring Uninterrupted Access All or Substantially All Review certain drug classes to ensure that beneficiaries being treated with these classes have uninterrupted access to all drugs in that class via formulary inclusion, utilization management tools, or exceptions processes Antidepressants Antipsychotics Anticonvulsants Antiretrovirals Antineoplastics Immunosuppressants 23

24 Common Drugs for Medicare Population Review drug list for inclusion of the most commonly prescribed drug classes for the Medicare population in terms of cost and utilization 24

25 Utilization Tools Review: Checks Prior authorization Step therapy Quantity limitations 25

26 Insulin Supplies and Vaccines Review Formularies must include alcohol swabs, needles, syringes, and gauze Vaccines not covered under Part B must be covered under Part D 26

27 Drug List Review: Long Term Care Accessibility A review will be performed to ensure that all the medically necessary Part D covered products are included in the formularies. IV drugs, Compounded medications Alternate dosage forms, such as, but not limited to liquids, crushable etc. 27

28 Formulary Maintenance Categories and classes may only be changed at the beginning of each plan year unless new drugs or new uses appear Drug additions, deletions, or tier changes must be submitted within 30 days of P&T decision Negative formulary changes require a 60 day notification to CMS, affected beneficiaries, SPAPs, providers and pharmacy networks 28

29 October-December Formulary Additions Formulary additions No UM restrictions No new NDC codes of drugs already on formulary May be included in marketing materials Will not be reflected in the Plan Finder until January Submission date of December for effective January 1, 2006 date 29

30 New Generic Drugs Additions Options Add new generics following aforementioned process Add new generic and submit written notice to by 11/15/05 for effective date of 1/1/06 After 11/15, no changes to corresponding brand will be permitted until 60 days after the contract year begins 30

31 Provision of Notice Regarding Formulary Changes Prior to removing/changing drug from formulary Plan must: - Provide 60 days notice to CMS, SPAPs, prescribers, network pharmacies, and pharmacists - For enrollees, must provide either: Direct written notice at least 60 days prior to date the change becomes effective, or At the time a refill is requested, provide a 60 day supply of drug and written notice 31

32 QUESTIONS 32

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