They Still Don’t Like It

In the October 8, 2014 memo entitled “Contract Year 2014 Part D Formulary Administration Analysis (FAA)”, CMS reiterates their concern with the accuracy of formulary coding. For the April 2013 analysis, 9 out of 88 (10.2 %) plan sponsors were found to have failed FAA, meaning that greater than 20% of the sampled rejects were determined to be inappropriate. The parameters for the 2014 FAA are:

• Sponsors will be required to submit all point-of-sale (POS) rejected claims relating to the following 4 categories: 1) non-formulary status; 2) Prior Authorization (PA); 3) Step Therapy (ST); and 4) Quantity Limits (QL).
• Larger plans (≥ 20,000 enrollees) should submit rejected claims data for service dates of June 1, 2014 through June 14, 2014 and smaller plans (< 20,000 enrollees) should submit rejected claims data for service dates of June 1, 2014 through June 30, 2014.

If you were one of the plans selected for the FAA, you were required to upload files to the Acumen site between October 16 and October 22. CMS will then select a sampling of the rejected claims for review. Those plan sponsors who meet or exceed the failure threshold will receive a notice of non-compliance and depending on how badly the plan sponsor exceeds the failure threshold, additional sampling and compliance actions may result.

Not to beat a dead horse, but this should again remind us of the importance of formulary benefit administration testing—rigorous and extensive at the beginning of the plan year and at every point during the plan year when formulary changes are made. You can’t afford NOT to.

Resources

Beneficiaries should be able to receive the Part D drugs they are entitled to, consistent with CMS guidance, from January 1st through December 31st of the plan year.

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