CMS Releases Part D Drugs and Formulary Requirements

February 19, 2015
|In Part D, Policy & Health Reform, Brain Food
|By GHG Advisors

The long awaited revision to the Prescription Drug Benefit Manual Chapter 6 is hot off the press. Many of the changes have been published previously by CMS in Best Practice guidance or communicated in the course of CMS compliance audits. The changes include additions to the sections on Medically Accepted Indications, drugs purchased in another country, drugs covered under Medicare Part A or B, policy regarding formulary changes, updates to the description of covered commercially available combination products, and updates to existing policies with respect to utilization management

The most pertinent changes include:

  • Part D plans have to apply the Part B definition of a medically-accepted indication to chemotherapy drugs that aren’t covered by Part B (therefore Part D covered drugs). “Part D sponsors will be required to thoroughly understand and apply Part B’s definition of an anti-cancer chemotherapeutic regimen, utilize Part B compendia, and consider peer reviewed medical literature when necessary.“
  • Part D plans should use prior authorization (PA) for those drugs with the highest likelihood of non-Part D covered uses and if a medication is discovered to have been utilized for a non-Part D indication upon retrospective review, the PDE has to be deleted and the accumulators adjusted.
  • To determine the appropriate Medicare A or B or D coverage “bucket” health plans may apply prior authorization, even if the beneficiary is currently taking the drug, and even if a protected class drug is involved.
    • CMS expects Part D sponsors to work aggressively to eliminate any interruptions of current therapy
  • Unless a prior authorization criteria is submitted to CMS and approved at a dosage level, the plan must honor prescription requests for PA approved drugs for all strengths
  • Any QLs below the FDA-approved maximum dose or below the days’ supply entered in the Part D benefit package (PBP) must be submitted and approved by CMS.
  • High cost edits should be above the usual and customary price of drugs to ensure that beneficiaries with valid claims for drugs are not subject to the edit.
  • Concurrent DUR edits of doses at or above FDA maximum approved dosing do not have to have prior approval from CMS. The labeling should clearly identify the dispensing as unsafe or contraindicated not just a precaution in the labeling.
  • For transition, CMS is defining non-formulary Part D drugs to mean both: (1) Part D drugs that are not on a sponsor’s formulary, and (2) Part D drugs that are on a sponsor’s formulary but require prior authorization or step therapy, “since a formulary drug whose access is restricted via utilization management requirements is essentially equivalent to a non-formulary Part D drug to the extent that the relevant UM requirements are not met for a particular enrollee.“
  • If a plan reduces a quantity limit (e.g. 2 tablets daily to 1 tablet daily), this change would require the plan to provide a transition fill if requested.
  • For transition, a new enrollee is one whose ongoing drug therapy (whether the health plan is able to determine ongoing therapy or not) could be potentially interrupted by a drug being non- formulary.
    • So an enrollee who stays with the same contract number but changes PBPs is a new enrollee eligible for a transition supply because his or her ongoing drug therapy could potentially be interrupted. However, an enrollee who moves from one PBP to another may not be eligible for transition if the formulary is the same for both PBPs.
  • CMS is mandating a minimum 108 day look-back period to determine if a member has ongoing medication therapy or not
  • For retail transition, if the smallest available marketed package size is in excess of a 30 day supply, the plan must offer a transition supply when required.
  • CMS is requiring up to a 91- to 98-day transition supply given that many LTC pharmacies and facilities must dispense brand medications in 14-day or less increments.
  • For LTC members, plan sponsors do not have to provide more than one emergency supply fill for a drug
  • Transition benefits accrue to beneficiaries at “network” pharmacies..
  • Beneficiary opioid point of sale edits can be applied during transition. However, for non-formulary opioid medications and formulary opioid medication subject to prior authorization or step therapy under a new plan’s utilization management rules, a temporary supply must be provided during transition.
  • The cost sharing for LIS members for transition fills cannot be higher than the maximum copayments in statute; for non-LIS members non-formulary drugs filled in transition would have the same copayment as non-formulary drugs approved through the exception process and formulary drugs with utilization management edits would have the same copayment during transition that they would have once the um requirement has been met.
  • For a medication that has multiple refills in transition, only one member and provider transition notice is required.
  • Medically Accepted Indication for purposes of Part D is an FDA labeled indication or an indication supported by citation in either the American Hospital Formulary System (AHFS), USP-DI (or its successor publications), or DRUGDEX®.

Three particular requirements of note are practices that we have been recommending to plans for the past five years:

  • thoroughly test the adjudication of the approved formularies in advance of and during the plan year to help identify errors
  • routinely review rejected claims at POS so that discrepancies are discovered timely
  • implement a continuity of care policy

Our Pharmacy experts can create and conduct an in-depth benefit administration test plan for your organization to validate that everything is working precisely as it should on an ongoing basis throughout the year. We can ensure your PBM is processing claims consistent with your CMS-Approved Prescription Drug Benefit.

 

Resources

The rapid changes to Part D regulations make the tracking and implementation of these CMS requirements exceptionally difficult — to say nothing of actually managing to them. Our Part D services are designed with your staff in mind, ensuring that with a mix of counsel and DIY tools your staff will have access to actionable information — faster. Contact us today to learn more >>

Registration for the Gorman Health Group 2015 Forum is now open! Attendees can expect timely, actionable advice on the trends shaping health care from notable speakers, including Barclay’s analyst, Joshua Raskin, and regulatory guidance directly from Jennifer Smith, a Director in the Medicare Parts C and D Enforcement Group at the Centers for Medicare & Medicaid Services (CMS). Register your team for The Gorman Health Group 2015 Forum today!