Transitions: Moving Dual Eligibles to Medicare Prescription Drug Coverage

1. 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

2. Overall Transition Strategy

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

4. 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

5. Ensuring Continuity of Coverage Beneficiary selects a new plan Beneficiary is enrolled into assigned plan State Monthly File of Duals May 2005 CMS notifies full duals of subsidy eligibility Enrollment materials mailed to beneficiaries by plan. 1-800-Medicare will know plan assignments 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

6. 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.

7. Establishing Safeguards • Formulary Review • Transition Process • Appeals and Exceptions

8. 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

9. 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

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

11. Formulary Review

12. 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

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

14. 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

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

16. 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

17. Review of USP Categories and Classes • USP categories and classes will satisfy a safe harbor. Available at: http://www.usp.org/pdf/drugInformation/mmg/finalModelGuidelines2004-12-31.pdf • Two drugs in each category/class

18. 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

19. 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

20. Review drug list for inclusion of at least one drug in each of the Formulary Key Drug Types identified by USP. Available at: www.usp.org “Third column” in USP document Most best practice formularies contain one or more of these agents USP Formulary Key Drug Types

21. 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

22. 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

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

24. 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

25. Utilization Tools Review: Checks • Prior authorization • Step therapy • Quantity limitations

26. 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

27. 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.

28. 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

29. 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

30. Transition Process

31. 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.

32. 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.

33. 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.

34. 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

35. 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

36. 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.

37. 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).

38. Appeals

39. 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

40. Shorter Timeframes Standard Expedited Coverage determinations: 72 hours 24 hours Redeterminations: 7 days 72 hours Reconsiderations by IRE: 7 days 72 hours

41. Coverage Determinations and Appeals • 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.

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

43. 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.

44. Additional Safeguards • 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.

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

46. Questions and Answers