Fact Sheets

CMS APPROVES PROGRAM CHANGES FOR MEDICARE ADVANTAGE AND PRESCRIPTION DRUG BENEFIT PROGRAMS FOR CONTRACT YEAR 2013

The Centers for Medicare & Medicaid Services today issued a final rule with comment period for the Medicare Advantage (MA) and prescription drug (Part D) benefits programs for Calendar Year 2013. These regulations, posted today at the Federal Register, implement MA and Part D technical and program changes that were determined based on public comments to a proposed rule that was published on October 11, 2011, and by applying insight obtained through CMS and stakeholder operating experiences.   CMS believes these provisions strengthen beneficiary protections, encourage high plan performance, improve program efficiencies, and clarify program requirements.

Summary of Major Provisions

Coverage Gap Discount Program

Using most of the existing Part D Coverage Gap Discount Program requirements – as previously implemented through relevant Agreements and guidance – CMS will codify the program through the full notice and comment rulemaking process. Although not required, CMS takes this action to provide additional transparency and a formal framework for operating the Discount Program and enforcing its requirements. 

The Affordable Care Act made several amendments to Part D of Title XVIII of the Social Security Act, including adding sections 1860D-43 and 1860D-14A of the Act and amending section 1860D-2(b) of the Act.  As of January 1, 2011, these amendments have started closing the Part D coverage gap -- or "donut hole" -- for Medicare beneficiaries who do not already receive low-income subsidies from CMS.  Closing the donut hole is accomplished, in part, by the establishment of the Medicare Coverage Gap Discount Program (Discount Program). 

Pharmacy Benefit Manager's Transparency Requirements

Requires Part D sponsors and their contracted pharmacy benefit managers to report various data elements on Part D transaction.  This provision specifies that this information is confidential and generally not for disclosure by the government or by a plan receiving the information, with certain exceptions that allow the government to disclose information in a non-identifiable form. 

Who May File Part D Appeals with the Independent Review Entity

Allows health care professionals to request, on behalf of their enrollees, reconsideration by the Independent Review Entity (IRE) of adverse coverage determinations regarding Part D medications they prescribe without obtaining an appointment of representative form.   CMS believes this change will make the Part D appeals process more accessible to beneficiaries. Legal authority for this provision is provided by section 1860D-4(g) of the Act. 

Plan Star Ratings as a Measure of Administrative and Management Performance and as a Basis for Termination or Non-Renewal of a Medicare Contract

Codifies CMS authority to use its discretion to terminate the contracts of Part C and D sponsors that fail to achieve at least a 3-star plan rating for 3 consecutive years beginning in 2015, using contract year 2013 Plan Ratings issued in 2012. Each year, CMS issues performance quality ratings -- using a star system where 5 stars indicate the highest quality – for Parts C and plan sponsors.  The plan ratings are based on a series of measures that correspond to operational requirements of the Parts C and D programs. CMS has established a benchmark of 3 stars to reflect an average level of performance. CMS requires plan sponsors with lower than a 3-star rating to make timely and effective corrective action plans. This policy takes effect with plan year ratings in 2013. Beginning in 2015, CMS may terminate contracts with plans that have been consistently unable to maintain a 3-start rating.

New Benefit Flexibility for Certain Dual Eligible Special Needs Plans

Allows dual eligible SNPs (D-SNPs) meeting certain integration and performance standards to offer additional supplemental benefits to its eligible subscribers beyond those supplemental benefits MA plans are allowed to offer.   On an annual basis, CMS can approve benefits that better integrate care for the dual eligible population, such as non-skilled nursing services, personal care services and other long-term care services and supports designed to keep dual eligible beneficiaries out of institutions.  CMS would require D‑SNPs that offer these additional supplemental benefits to do so at no additional cost to the beneficiary.  CMS believes that qualifying D-SNPs granted this supplemental benefit flexibility could help prevent health status decline and reduce the quantity and cost of future health care needs. 

Clarifying Coverage of Durable Medical Equipment

Finalizes CMS’ approach to permit a Medicare Advantage plan to limit durable medical equipment (DME) to specific "preferred" brands and manufacturers as long as the plan sponsor complies with several requirements ensuring plan enrollees continue to have access to all DME in categories specified in the Social Security Act.  Beneficiary protections include access to all preferred brands, a transition period permitting enrollees to retain non-preferred DME brands when changing plans, exceptions to plan limitations based on medical necessity, the ability to appeal a plan's denial of DME based on brand or manufacturer, and plan disclosure of DME limitations to its enrollees. 

Establishment and Application of Daily Cost-Sharing Rate as Part of Drug Utilization Management and CMS’ Fraud, Abuse and Waste Control Program

Creates a daily cost-sharing rate requirement eliminating any financial disincentive to Medicare Part D beneficiaries requesting a less than a 30-day fill, and reduces program costs and waste. This provision allows people with Medicare to consult with their prescribers on whether less than a month's supply of a drug would be appropriate. By doing so, a Part D plan sponsor will be able to apply a lower, pro-rated cost-sharing amount when the prescription is dispensed.   This will lower costs to beneficiaries for trial fills or less-than-30 day fills and enables them to align their refill dates.

Access to Covered Part D Drugs Through Use of Standardized Technology and National Provider Identifiers

Requires prescription drug event records submitted by Part D sponsors to include a valid prescriber National Provider Identifier (NPI), which will assist with CMS’ program integrity and anti-fraud efforts. The use of NPI allows prescribers to be consistently and uniformly identified, facilitating identification of potentially inappropriate and fraudulent patterns of prescribing and use of prescription drugs.   This policy will not interfere with beneficiary access to needed medications because Part D sponsors must validate the NPI at point of sale. If this verification is not possible, safeguards in the process will permit the prescription to be dispensed and Part D sponsors to obtain the valid NPI afterwards.

BACKGROUND:

In October 11, 2011 edition of the Federal Register (76 FR 63018), the Centers for Medicare & Medicaid Services (CMS) published a proposed rule with proposed revisions to the Medicare Advantage (MA) program (Part C) and prescription drug benefit program (Part D).  The goals of this proposed rule were to:

• Implement provisions from the Affordable Care Act (ACA) and the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA);
• Strengthen beneficiary protections; exclude plan participants that perform poorly;
• Improve program efficiencies; and clarify program requirements for contract year 2013.

Considerations for Independent Long-Term Care (LTC) Consultant Pharmacists

CMS will continue to consider changes to long-term care facility (LTC) conditions of participation relating to pharmacy services.  In the proposed rule, CMS reported that it was considering a requirement for LTC consultant pharmacists to be independent of any affiliations with the facility's pharmacies, pharmaceutical manufacturers and distributors, or any affiliates of these entities. We argued that such a requirement would be necessary to ensure that consultant pharmacist decisions were objective, unbiased, and in the best interest of nursing home residents.  CMS analyzed industry and stakeholder comments to the proposed provision, and through this review, CMS has determined that this requirement did not provide a comprehensive solution to concerns of the over-prescribing of drugs in LTC settings and so is not finalizing the proposal at this time.

From comments received on this issue, we now believe a more targeted and less disruptive approach is warranted. As such, CMS is soliciting additional comments to help determine a more comprehensive approach to eliminate overprescribing and the use of chemical restraints in LTC.   CMS is strongly encouraging the LTC industry to voluntarily adopt the following changes to increase transparency:

• Separate LTC consultant contracting for dispensing and other pharmacy services;
• Pay fair market rates for consultant pharmacist services;
• Disclose to LTC facilities any affiliations of consultant pharmacists that pose potential conflicts of interest (this may include the execution of consultant pharmacist integrity agreements.)

CMS urges LTC practices and stakeholders to implement changes to address these concerns which will result in a decrease in inappropriate prescribing. If improvements in inappropriate utilization do not occur, we will use a future notice and comment rulemaking to propose requirements to comprehensively address these concerns. 

The Final Rule, where comments can be submitted on the LTC consultant pharmacist provision, is accessible at the Federal Register at:   http://www.ofr.gov/inspection.aspx?AspxAutoDetectCookieSupport=1