Transitions: Moving Dual Eligibles to Medicare Prescription Drug Coverage Tony Culotta, Director, Appeals and Enrollment Group Babette Edgar, Director, Division of Finance and Operations, Medicare Drug Benefit Group Alissa DeBoy, Special Assistant, Medicare Drug Benefit Group

Overall Transition Strategy

Dual Eligibles: Transition to Medicare Prescription Drug Coverage Ensuring Continuity of Coverage Providing Extra Help Working with States Establishing Appropriate Safeguards Reaching Beneficiaries Protecting Special Populations

Low-Income Subsidy: Providing Extra Help Mid-May –Mid-June – CMS low-income subsidy mailing for dual eligibles who are deemed eligible for the subsidy –Additional information will be available in October, 2005, about specific Medicare prescription drug plans in their area. Beneficiaries will only be responsible for $0 to $5 copayments per prescription –Above 100% FPL – up to $2 or 5$ copay –At or below 100% FPL – up to $1 or $3 copay –institutionalized – $0 copay

Ensuring Continuity of Coverage State Monthly File of Duals May 2005 CMS notifies full duals of subsidy eligibility October 2005 CMS mails letter to full duals identifying plan they will be enrolled into if they don’t choose another plan. Plans informed of assigned enrollees Enrollment materials mailed to beneficiaries by plan Medicare will know plan assignments Beneficiary selects a new plan Beneficiary is enrolled into assigned plan

Working with States Enrollment information for full-benefit dual eligibles including their assigned plans; Comparative information on Medicare prescription drug plans including formularies and pharmacy networks. Targeted educational and outreach materials. Facilitate information sharing between States and plans.

Establishing Safeguards Formulary Review Transition Process Appeals and Exceptions

Protecting Special Populations CMS’s Long Term Care Guidance addresses: LTC Pharmacy Performance and Service Criteria –Performance and Service Criteria for Network LTC pharmacies Convenient Access Formulary Exceptions and Appeals

Outreach Campaign Multi-phased message platform –Awareness (January–June 2005) Focus on Prevention and Develop Partnerships –Decision (July–December 2005) Motivate and Educate Beneficiaries –Urgency (January–June 2006) Target Beneficiaries that have not yet enrolled in order to avoid increased premiums

Outreach Strategy Multi-level approach –National –Regional –State/local –Constituent organizations and Congress Multi-channel approach –Media –Direct mail –Grassroots outreach –Partnerships

Formulary Review

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

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

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

Formulary Review: A Visual Perspective Review of Formulary Classification Systems Review of Drug Lists P&T Oversight Review of Benefit Management Tools

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

Review of USP Categories and Classes USP categories and classes will satisfy a safe harbor. Available at: nalModelGuidelines pdf nalModelGuidelines pdf Two drugs in each category/class

Comparison to AHFS Categories and Classes Used if plan utilizes their own category and class system outside of the USP structure AHFS- American Hospital Formulary System Widely used in the pharmacy industry

Two drugs per category/class Alternative classification structures will be compared to USP and other commonly used classification systems All classification schemes must contain at least two (2) drugs per category and class

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

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

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

Therapeutic Categories or Pharmacologic Classes Requiring Uninterrupted Access Antidepressants Antipsychotics Anticonvulsants Antiretrovirals Antineoplastics Immunosuppressants 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

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

Utilization Tools Review: Checks Prior authorization Step therapy Quantity limitations

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

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.

Drug List Review: Outliers CMS will identify potential outliers during the category and classification review, as well as during the drug list review Outliers for each area of review will be further evaluated to determine if they are discriminatory Plans may be asked to provide reasonable clinical justification to substantiate the potential outlier

How Formulary Process Will Help Enrollee Transition Non-discriminatory formularies Assure broad access to drugs “All or substantially all” drugs are required in drug classes where significant negatives outcomes would be expected if changes in drug regimens occur. Assure efficient exceptions and appeals processes

Transition Process

Transition: Changes for full-benefit dual eligible individuals They will no longer qualify for drug benefits under Medicaid after January 1, 2006 They will receive Part D drug benefits and be deemed eligible for the full subsidy provided to low-income individuals. – Will receive premium assistance. Will not be subject to a deductible. –Will only be charged nominal copayments, no matter what tiers are established by the plan.

Transition Issues Raised During the Regulatory Process Concerns raised over access to certain types of drugs by individuals stabilized on medications. Concerns on the need to educate providers to ensure appropriate changes of prescriptions when necessary to accommodate a plan’s formulary.

Transition Process The final regulation requires plan sponsors to have a transition process for new enrollees prescribed Part D drugs not on the plan’s formulary. This applies to Part D drugs. CMS issued guidance on March 16, 2005.

Transition Guidance General Transition Process for New Enrollees –Pharmacy and Therapeutics Committee role –Filling the gap –Transition Timeframes –Other Transition Methods Residents of Long Term Care Facilities Current Enrollee Transitions and Exceptions and Appeals

Other Transition Issues Affecting Current Enrollees Transition Issues Based on Level of Care Changes –Discharge from a hospital Long Term Care (LTC) facility –Discharge from a hospital to home –Transition from Skilled Nursing Facility-A status to private pay (or Medicaid) status within a LTC facility –Change from Hospice Status –Change from a Psychiatric Hospital to any other status

Coverage of Excluded Drugs Some drugs are not covered at all by Part D (e.g. benzodiazepines and barbiturates ). They may be covered by Medicaid.

Role of Medicaid During transition, states will assist CMS with the identification of dual eligibles and the education of beneficiaries regarding upcoming changes. Coverage for an extended supply in December 2005 is an option Once drug benefit is effective, –Medicaid may still cover excludable drugs –States may choose to wrap around the Medicare drug benefit (i.e., pharmacy plus or state only programs).

Appeals

Appeals Overview Modeled after the Medicare Advantage program Grievances Initial Coverage Determination 5 Levels of Appeal Redetermination by the Part D plan Reconsideration by the Independent Review Entity Hearing with an Administrative Law Judge Review by the Medicare Appeals Council Review by a Federal court

Shorter Timeframes StandardExpedited Coverage determinations: 72 hours24 hours Redeterminations: 7 days 72 hours Reconsiderations by IRE: 7 days 72 hours

Involve the benefits an enrollee is entitled to receive or the amount, if any, that an enrollee is required to pay for a benefit. Include decisions concerning an exception to a plan’s tiered cost-sharing structure or formulary. Coverage Determinations and Appeals

Coverage Determinations: Pharmacy Notice Transaction at pharmacy is not a coverage determination. General notice provided to enrollees at pharmacy.

Coverage Determinations: Exceptions Tiering Exceptions: Permit enrollees to obtain a lower-tiered drug at the more favorable cost- sharing terms applicable to drugs on a higher tier. Formulary Exceptions: Ensure that Part D enrollees have access to Part D drugs that are not included on a plan’s formulary.

Plans are prohibited from requiring additional exception requests for refills. Plans are prohibited from assigning drugs approved under the exceptions process to a special tier. Plans must notify enrollees in advance if they intend to change their formularies or cost-sharing structures during a plan year. Additional Safeguards

Dual Eligibles: Transition to Medicare Prescription Drug Coverage Ensuring Continuity of Coverage Providing Extra Help Working with States Establishing Appropriate Safeguards Reaching Beneficiaries Protecting Special Populations

Questions and Answers