Costs for the Medicare prescription benefit will vary from plan to plan. Those individuals who are eligible for both Medicare and Medicaid (dual eligibles) will be automatically enrolled in low-premium prescription drug plans, and their premiums and deductibles will be waived. It is important to note, however, that under the new Medicare prescription drug benefit, dual eligibles will be required to pay small co-pays, something they are not required to do under Medicaid. Other beneficiaries who are eligible for low-income subsidies, or what Medicare is calling Extra Help, may receive similar waivers. For all other people with Medicare who voluntarily enroll in the Medicare prescription drug plans, the costs will include premiums and deductibles, as well as co-pays for drugs.
Financial assistance is available to defer the costs of the new Medicare prescription drug benefit. People with Medicare and Medicaid (dual eligibles) and other partial dual eligibles (such as Qualified Medicare Beneficiaries (QMB), Specified Low-Income Medicare Beneficiaries (SLMB), Qualifying Individuals (QI) and Supplemental Security Income (SSI)) will be automatically enrolled in these assistance programs. Other individuals with Medicare must apply for the for the low-income subsidy program, which is called Extra Help. Medicare estimates that 11 million people with Medicare will receive financial assistance for prescription drug coverage. A variety of state and charitable programs will also be available to help these low-income individuals enroll and pay for the new prescription drug plan, and National Mental Health Association (NMHA) and National Alliance for the Mentally Ill (NAMI) will be providing assistance to patients so that they can determine what is in their best interest (please see sections on Extra Help for consumers and Additional Resources).
The initial enrollment period for the Medicare prescription drug program begins on November 15, 2005 and runs until May 15, 2006. Some individuals will be automatically enrolled into the program. This includes all those who are currently enrolled in both Medicare and Medicaid (dual eligibles) and other low-income individuals with Medicare (partial dual eligibles). Everyone else can sign up for the new prescription drug benefit voluntarily by applying through the Centers for Medicare and Medicaid Services (CMS) or by dealing directly with one of the Medicare Prescription Drug Plans (PDPs) that will be serving their region.
The new Medicare Part D prescription drug benefit (created by the Medicare Modernization Act of 2003) may affect all 42 million people with Medicare. This includes both senior citizens, eligible for Medicare after age 65, and disabled Americans who receive their health coverage through Medicare. All new Medicare prescription drug plans (PDPs) will begin coverage on January 1, 2006, with the initial enrollment period running from November 15, 2005, to May 15, 2006. Medicare beneficiaries who do not currently have drug coverage that is as good or better than that being offered under Part D will incur a penalty (currently projected to be 1% for each month they fail to enroll in Part D) should they choose to enroll at a later date. It is important that psychiatrists and other physicians understand how this new benefit will affect their patients.
The APA’s Office of Healthcare Systems and Financing is conducting a 50-state survey to determine how state Medicaid programs will be approaching the January 1, 2006 transition of their dual eligible beneficiaries (Medicaid beneficiaries who also receive Medicare) from receiving prescription drug coverage under Medicaid to receiving it under Medicare Part D.
While many states are waiting to find out which prescription drug plans will be serving the dual eligible population and the specifics of these plans’ formularies (information that should become available in October 2005), it is clear that the states are very aware of the problems that may arise with the change in dual eligibles coverage.
The survey consists of three questions concerning 1) refill policy for medications prior to January 1, 2006; 2) state coverage for drugs that are excluded from Part D, specifically benzodiazepines; and 3) whether there will be assistance to help dual eligibles pay for drug co-pays that are required under Medicare.
Initial survey results suggest that although CMS recommended that state Medicaid programs provide dual eligibles with refills to tide them through the transition period, most states will be continuing with their current refill policies (i.e., if the standard refill period is for 30 days, only 30-days-worth of drugs will be provided; and if the patient is not entitled to a refill until after January 1, 2006, no refill will be supplied at all). On the issue of non-covered drugs, if the Medicaid program provides drugs that are excluded from Part D to its non-dual eligible Medicaid beneficiaries, it will continue to provide these drugs to dual eligible beneficiaries as well. Since all states currently cover benzodiazepines and there is no indication that this will change, that mean dual eligibles will continue to receive their benzodiazepines through Medicaid. On the issue of co-pays, it appears that Medicaid programs will probably not be able to cover these costs and are hoping help may be available from private organizations in their states.
Residents of long-term-care (LTC) medical or nursing facilities with psychiatric illnesses are a unique and vulnerable population with special pharmacy needs. All facilities that comply with Medicare and Medicaid conditions of participation are covered under the new Part D prescription drug benefit. These are primarily nursing home facilities.
Other living arrangements such as assisted living facilities, other facilities recognized by state law, group homes for the developmentally disabled, and other forms of congregate living arrangements regulated by the states, but not by the Federal government, are not covered as LTC facilities under Part D, and patients who reside in these facilities will be auto-enrolled (if dual eligible) or will have to individually enroll in a Part D plan and access their prescription drugs through regular pharmacies that have contracted with the PDP or Medicare Advantage plan that they are enrolled in. In either case, they will access their prescription drugs through the pharmacies that have contracted with their PDP or Medicare Advantange plan.
The transition of many Medicare patients from their current drug coverage to coverage under Part D creates a number of concerns about how patients will be able to continue to receive the medications on which they are currently stabilized. This transition applies in three different situations: the initial transition of beneficiaries to Part D on January 1, 2006; the transition of new enrollees after that date; and the transition of individuals who switch from one plan to another after the implementation of the benefit.
CMS has acknowledged the specific needs of patients with mental illness to be able to continue on their same drug regimens. In their online FAQs (http://questions.cms.hhs.gov ) states “beneficiaries should be permitted to continue utilizing a drug in these categories that is providing clinically beneficial outcomes.” It is important to understand that CMS’s transition policy is suggestive rather than mandatory and is being revised regularly as more issues come into question. We will provide updates as new information becomes available.
Of special concern are the difficulties that may arise for dual eligible patients, patients with both Medicaid and Medicare, who have been receiving drugs through their state Medicaid programs. Although these patients will be automatically enrolled in a low-premium prescription drug plan (PDP) by CMS to ensure that they will not have a gap in coverage, there are questions about whether the new plans will provide them with the exact same medications they are currently receiving and about the co-pays they will now be responsible for under Part D. Because these patients will be permitted to switch to more appropriate plans as needed, they and their caregivers will likely turn to their psychiatrists to help them make informed decisions.
This discussion of the Part D appeals process is intended to provide you with the information you need to ensure an appeal will proceed as the Medicare regulations intend it to (for a graphic representation of how the appeals process proceeds, click here). All appeals will begin with a denial of a prescribed drug (a coverage determination) by the Part D prescription drug plan (PDP) the patient is enrolled with. It is vital that you have an understanding of how the regulations define the appeals process when you interact with a PDP on a patient’s behalf.
who may access the appeals process;
the various steps that define the process;
the timeframes the PDPs and other entities involved in the appeals process are supposed to adhere to; and,
documentation requirements for different types of exceptions requests.
There’s a lot of detail, and the specificity of the rules governing appeals may make it seem more difficult than it is. We wish we could simplify it, but since we want to provide you with the correct information you need to conduct a successful appeal, all the ifs and howevers that make things seem so confusingneed to be there. If, after reading this, you have questions, you can e-mail the APA’s Office of Healthcare Systems and Financing with your specific questions at [email protected] or call us at 866-882-6227.
A PDP’s formulary coverage policy comprises which drugs are included in the formulary, cost-sharing tiers, prior authorization, step therapy, and dose and quantity limits, among other things. Before the official appeals process begins, an enrollee may request an exception to the coverage policy:
If a medically necessary drug is not on the PDP formulary, or is on the formulary as other than a preferred drug (i.e., it requires a higher co-pay).
If a utilization management (UM) edit, such as prior authorization or step therapy must be complied with before the enrollee can obtain the necessary drug; or
If there are dosage or quantity limits that prohibit appropriate treatment.
So, for example, If a plan denies an exception request based on cost-utilization tools such as step therapy or because the enrollee’s prescription exceeds quantity limits, this denial constitutes a coverage determination and can be appealed.
A coverage determination is usually a formal written decision by a PDP that it will or will not provide or pay for a Part D drug. However, if a PDP fails to respond to a prior authorization request in a timely manner, this would also be considered a coverage determination and the appeals process could go forward. (The terms coverage determination and exception are often used interchangeably and inappropriately, which is one of the many things that often creates confusion in discussions of Part D procedures. But it should be understood that a coverage determination in response to an exceptions request is one type of coverage determination. A denial of a prior authorization request is also a coverage determination.)
Essentially, if a physician prescribes a drug, but the pharmacist cannot dispense that drug because the patient’s PDP has a policy that will not permit it, a request to override that policy, even if it is only a request from the prescriber for prior authorization, constitutes a coverage determination. It is important to let patients know that if the PDP denies a prescription, the pharmacist is required to inform the patient of their rights to appeal the denial and who they need to contact to make the appeal. There is a form available for pharmacists to communicate denial information to prescribers, and you might want to consider giving these to your patients with a prescription.
The request for a coverage determination that will override the PDP’s denial may be made by:
the enrollee’s appointed representative;
or by the prescribing physician.
If the coverage determination received from the PDP is positive, allowing the enrollee to receive the prescribed medication as requested, the process is complete. If, however, the enrollee receives an adverse coverage determination in writing, denying the request for drug access, the official appeals process then may begin. The coverage determination from the PDP should provide information about the right to appeal the determination and how the appeals process is to be accessed. The appeals process cannot officially begin until the coverage determination has been received in writing.
Requests for exceptions to formulary policies are defined by regulation as being based on the three different issues:
The drug is not on formulary or is not a preferred drug;
A UM edit prohibits access to the drug; or
A dosage or quantity limit prohibits proper treatment.
Each of these three has specific and different documentation requirements that stipulated by the Part D regulations (42 CFR §423.578 (b)(5)). Following these requirements is vital for having an appeal accepted as legitimate by reviewers (e.g., the PDP; the Independent Review Entity, or Quality Improvement Contractor; or the Administrative Law Judge (ALJ)). The chart below provides the stipulated requirements.
Utilization management (UM) techniques (sometimes referred to as benefit management tools) are measures taken by prescription drug plans to control access to or use of specific drugs. The Centers for Medicare and Medicaid Services (CMS) states that UM techniques for the new Medicare prescription drug benefit “must include incentives to reduce costs when medically appropriate and assist with preventing over-utilization and under-utilization of medications.”
Each Medicare Prescription Drug Plan (PDP) must have a formulary that includes both generic and brand name medicines covered by the plan. CMS requires that the plans include at least two drugs in every pharmacologic class in a wide range of therapeutic categories based on the USP (U.S. Pharmacopeia) Model Guidelines for drug categories and classes. For the antidepressant, antipsychotic, anticonvulsant, anticancer, immunosuppressant, and HIV/AIDS categories, CMS is requiring that PDPs include “all or substantially all” of the drugs available. However, PDPs are not required to provide all doses and forms of these drugs.