State Reimbursement for Medicare Part D Transition
On January 24th, CMS announced they had established a demonstration reimbursement plan which enables states to be fully reimbursed for their efforts to help Medicare dual eligibles have continued access to covered drugs during their transition to Medicare Part D. In addition to reimbursement for amounts paid on prescription drugs, the demonstration plan will provide payments to states for administrative costs incurred in the coordination of the drug benefit by state Medicaid programs. The demonstration plan will be administered under Section 402 Demonstration Authority.
CMS will provide a template for use by states who have reinstituted some coverage through their Medicaid programs for dual eligibles. CMS plans to work with affected states to develop a process for reconciling payments involving beneficiaries in State Pharmacy Assistance Programs (SPAPs) enrolled in Medicare Part D.
Key features of the demonstration plan include:
- State Reimbursement: State Reimbursement: States that meet the conditions of the waiver will have their full drug benefit costs reimbursed through (1) CMS assurance of payment reconciliation with the prescription drug plans and (2) Medicare payment of any net drug cost differential after reconciliation. In addition, CMS will provide funding for administrative costs incurred by states.
- Payer of Last Resort: States will use payment approaches that support pharmacist efforts to primarily bill the Medicare Part D plan, and that promote the use of Medicare point-of-sale billing, before relying on state payment. States will provide input to CMS and plans on ways to enhance plan and program performance for the state’s dual eligible beneficiaries and pharmacists, to help reduce State billing.
- Timely Data Sharing: States that participate will provide timely summary information on claims incurred, including summary amount and beneficiary identification information, to facilitate reconciliation and beneficiary transition to Part D plans. States will also work with CMS to provide valid data on any set of beneficiaries who may not have been included properly in the state’s previous dual eligible files.
- Claims Identification: States will separate claims for the transition period from claims the states would have otherwise paid through a separate state program. In some states, the state has elected to pay all cost sharing, for example, on behalf of some beneficiaries who would otherwise have paid a copayment.
- End Date: This temporary demonstration program would have an anticipated end date of February 15, 2006. Participating states would discontinue payments through their Medicaid systems on or before this date. The secretary may provide a short-term extension of the demonstration program.
- Retroactive Effective Date: The demonstration would be retroactive to the first date the state paid claims.
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