 NCSL Medicare Resource Center
Last update July 07, 2006
Update on the Progress of the Medicare Part D Implementation
According to Health and Human Services Secretary Mike Leavitt, Medicare Part D enrollment reached 38.3 million in June. The Centers for Medicare and Medicaid Services (CMS) Office of Actuary reports that in 2006 beneficiary premiums are expected to average less than $24 a month--down from the $37 projected in the july 2005 budget estimate--and the overall taxpayer expense for 2006 is down 20 percent since the July 2005 estimate. Based on the new data, CMS now projects net total cost for the drug benefit over the initial 10-year period to be about $180 billion less than anticipated.
CMS has conducted ongoing analysis of savings through data provided by stand-alone prescription drug plans (PDPs). A range of drug profiles based on the most commonly used medications by Medicare beneficiaries were examined to calculate savings. A full copy of the report is available at http://www.cms.hhs.gov/apps/media/press/release.asp?Counter=1886.
Although CMS did not extend the May 15th enrollment deadline in general for the Medicare population, they did make accommodation in June for low-income beneficiaries and those affected by Hurricane Katrina. For those eligible, the enrollment period has been extended through December 31, 2006 without penalty. The special enrollment period is only applicable to those applicants who apply and and receive the low-income subsidy and individuals who were affected by Hurricane Katrina. If an individual disenrolls from the Part D plan after 2006 and they do not have credible coverage for a period of 63 days or more, they would then incur a late enrollment penalty when they re-enroll in a plan.
Recent Guidance
In April, CMS issued guidance concerning alteration of PDP formularies. Based on best practices and in the best interest of Medicare beneficiaries CMS has called for a limitation of formulary changes during each plan year. All changes must be submitted to CMS for review and approval. A four part policy regarding formulary changes has been implemented as follows:
- Part D plans may expand formularies by adding drugs to their formularies, reducing copayments or coinsurance by lowering the tier of a drug, or deleting utilization management requirements any time during the year.
- Part D plans may not change their therapeutic categories and classes in a formulary other than at the beginning of each year, except to account for new therapeutic uses and newly approved Part D drugs.
- Formulary Maintenance Changes: After March 1, Part d plans may make maintenance changes to their formulary, such as replacing brand-name with new generic drugs or modifying formularies as a result of new information on drug safety or effectiveness. Those changes must be made in accordance with the required approval procedures and following 60 days notice to CMS, SPAPs, prescribers, network pharmacies, pharmacists and affected enrollees.
- Other Formulary Changes: Part D plans may only remove Part D drugs from their formulary, move covered Part D drugs to a less preferred tier status, or add utilization management requirements in accordance with the required approval procedures and following 60 days notice to CMS, SPAPs, prescribers, network pharmacies, pharmacists and affected enrollees.
Plans are not required to obtain approval for the removal of a drug if it has been pulled from the market by the FDA. Full details of required formulary procedures is available at http://www.cms.hhs.gov/PrescriptionDrugCovContra/Downloads/MemoFormularyChangeGuidance_04.27.06.pdf.
On June 22, 2006, CMS released their 2007 Draft Coordination of Benefits (COB) Guidelines for review and comment. The draft 2007 COB Guidance incorporates a number of changes to
clarify existing policy, describe updated systems and processes related to COB, and
explain new and proposed policy and requirements. Comments may be submitted on this draft until COB July 14, 2006 at drugbenefitimpl@cms.hhs.gov . This document provides guidance to Part D sponsors regarding our requirements and procedures for coordination of benefits (COB) between Part D plans and State Pharmaceutical Assistance Programs (SPAPs) and other providers of prescription drug coverage with respect to the payment of premiums and coverage, as well as coverage supplementing the benefits available under Part D.
Summary of draft COB Guidelines relating to state programs.
Recent Medicare Part D Highlights
Secretary's Progress Report IV on the Medicare Prescription Drug Benefit
2007 Final Guidelines--Formularies
This paper is final guidance on how CMS will review Medicare prescription drug benefit plans to assure that beneficiaries receive clinically appropriate medications at the lowest possible cost.
2007 Transition Process Requirements
Requirements for a transition process that will address procedures for medical review of determination. Featurednonformulary drug requests and, when appropriate, a process for switching new Part D plan
enrollees to therapeutically appropriate formulary alternatives failing an affirmative
medical necessity determination. |
