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Medicare Targets Changes for 2007 Drug Program,
Limits Insurers to Two Plans
One pharmacist
drops out of program due to low reimbursements and payment delays
April 4, 2006 The Centers for Medicare and
Medicaid Services yesterday issued a fact sheet outlining quality
improvements proposed for the Medicare prescription drug plan in 2007
that says insurance companies will be limited to two plans, unless
offering plans that fill coverage gaps in the drug benefit. The quality
improvement statement comes as at least one pharmacist drops out of the
program, according to a report by KaiserNet.org.
(See
complete quality improvement statement from Medicare below news
KaiserNet.org news report.)
 Medicare Prescription Drug Benefit Insurers
Limited to Two Plans for 2007, CMS Says
Private health insurers sponsoring Medicare
prescription drug plans will be allowed to offer no more than two plans
next year,
CMS
Administrator Mark McClellan said on Monday, the Wall Street Journal
reports.
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Insurers were allowed to offer three plans this
year, but some beneficiaries have been overwhelmed by the number of
choices, McClellan said. He said the two-plan limit should help simplify
the drug benefit.
"Two plans should be sufficient," he said. However,
some insurers offering plans that fill coverage gaps in the drug benefit
might be allowed to offer three plans, McClellan said (Wall Street
Journal, 4/4).
Pharmacist
In other drug benefit news, a pharmacist in Menlo Park, Calif., said
Monday that he will no longer participate in the program because low
reimbursements and payment delays have caused him to lose too much
money,
CQ HealthBeat
reports.
Richard Burge, CEO of Baneth's Pharmacy, said he
has accumulated $75,000 in debt because he continued to fill
prescriptions for beneficiaries while reimbursements from MedImpact --
the pharmacy benefit manager that administers both plans he accepts --
were reduced or delayed.
Burge accepted beneficiaries from Medi-Cal, the
state's Medicaid program, and Care Advantage, a Medicare drug plan. He
said he lost about $7 for every brand-name drug he distributed and even
more for generic medications. The
Pharmaceutical Care
Management Association, which represents PBMs, said in a
statement, "Job No. 1 in Part D for Medicare drug plans, drugstores and
other stakeholders is to save money for seniors and make sure they have
access to the drugs seniors need. On that score, we are making
significant progress."
CMS spokesperson Peter Ashkenaz said agency
officials are "sorry to see when a pharmacist has to make a business
decision to leave the program."
Survey
In related news, the
Medicare Rx
Education Network on Monday released a survey finding that
87% of beneficiaries who voluntarily enrolled in the drug benefit feel
the program works well, CQ HealthBeat reports. About half of
beneficiaries actively looking to enroll in a plan say they do not have
enough information to chose, while almost 60% of beneficiaries who have
not enrolled say choosing a plan is difficult (Carey, CQ HealthBeat,
4/3).
Editorial
Two surveys from
America's Health
Insurance Plans show that "[e]ven with the myriad
prescription drug plans open to beneficiaries ... seniors are not
overburdened by choice," a
Washington Times
editorial states.
According to the surveys, the "vast majority" of
beneficiaries "had no difficulty enrolling," and most feel that "finding
the right plan is worth the effort of shopping around," the editorial
says. It adds that the drug benefit "seeks a balance between reigning in
the cost of prescriptions and encouraging pharmaceutical advancement"
through "competition between providers."
The editorial concludes, "The success of Part D is
crucial, as the effectiveness of empowering consumers to choose between
competing plans will shape future reforms to the Medicare system"
(Washington Times, 4/4).
"Reprinted with
permission from kaisernetwork.org You can view the entire
Kaiser Daily Health Policy Report, search the archives, and sign up
for email delivery at
www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser
Daily Health Policy Report is published for
kaisernetwork.org, a free service of The Henry J. Kaiser Family
Foundation. © 2006 Advisory Board Company and Kaiser Family Foundation.
All rights reserved.
The Fact Sheet from CMS on Quality Improvement in 2007
CMS Commitment to Continuous Quality Improvement
Drives Requirements and Expectations for 2007 Prescription Drug Plans
Background
The choices beneficiaries are making, the
operational and systems improvements made thus far, and the Centers for
Medicare & Medicaid Services (CMS) commitment to continuous quality
improvement in the Medicare prescription drug program have informed the
instructions to and expectations of the prescription drug plans as the
plans prepare their bids for 2007. Medicare Part D plans must build on
the improved customer service, strengthened data exchange systems, and
other operational enhancements they have made thus far.
The CMS goal is to ensure that the plans meet high
standards of customer service and other key dimensions of performance.
Additionally, because strong relationships with pharmacists and other
health care providers are critical to the successful delivery of this
benefit to Part D enrollees, CMS is requiring plans to continue to
streamline their Part D operations to avoid unnecessary administrative
burdens.
CMSs final evaluation of a prescription drug plan
(PDP) sponsors qualifications to participate in the Part D program
during 2007 continues throughout 2006. CMS will continue routine
monitoring, audits, and data review on the performance metrics being
collected this year. If at any time a PDP sponsor is determined to be
substantially out of compliance with Part D requirements and does not
demonstrate that it has taken adequate steps to correct the problems,
further CMS enforcement actions may include contract termination
proceedings prior to the start of the 2007 contract year.
Promoting Competition That Provides Better
Benefits at a Lower Cost
As of mid-March, over 7.2 million people have,
either on their own, with the help of family or friends, or with the
assistance of one of the thousands of counselors and volunteers across
the country, individually enrolled in Part D, and hundreds of thousands
more beneficiaries are choosing drug coverage each week. Beneficiaries
are choosing plans that best meet their needs, leading to coverage that
serves them better and costs less for them and for taxpayers. Enrollment
data reveal that the vast majority of beneficiaries are choosing plans
that offer benefits other than the standard option as defined in the
law. They are choosing plans that have low premiums, no deductibles,
fixed copays, coverage in the gap or donut hole. In fact, only 16
percent of PDP enrollees chose the standard, statutory option and only 5
percent of MA-PD enrollees chose the standard option. Beneficiaries are
also often choosing plans with access to a broad range of drugs through
very broad formularies.
CMS want to ensure that plan choices offered in
2007 clearly meet beneficiary needs, and enable beneficiaries to compare
different kinds of plans and confidently choose the coverage that is
best for them. CMS intends to negotiate with prescription drug plan
sponsors to ensure that each bid submitted represents variation based on
plan characteristics that will provide meaningful, clearly
understandable and substantially significant options for beneficiaries.
Key options where beneficiaries have different preferences include the
option of a zero versus higher deductible, flat copays versus
coinsurance for covered drugs, enhanced coverage in the coverage gap
versus a more basic benefit, and broader versus more tightly managed
access to particular drugs. CMS expects competition to move toward
providing more support for beneficiary comparisons of plans in these key
dimensions, along with premiums and drug costs. CMS expects that, for
many sponsors, two plan choices will be sufficient unless the sponsor
offers enhanced coverage.
Building On Steps to Ensure High-Quality Service
CMS will review each PDP sponsors compliance with
all requirements of the program to determine whether contract renewal is
warranted. While many plans are performing well or are achieving
significant improvements in key areas of beneficiary service and
support, CMS may consider non-renewal if there has been a substantial
failure to comply with program requirements. As the drug benefit is
just completing its third month, CMS will consider information being
collected now and in the months ahead on plan performance. Special
attention will be paid to key operational areas which impact customer
satisfaction and successful delivery of the benefit, including effective
data systems, customer and provider service, exceptions and appeals
processes and pharmacy support.
Effective Data Systems. CMS expects
sponsors to develop and maintain information systems that accurately
process updated enrollment information at least weekly. CMS expects
that successful plans will follow best practices for timely and accurate
processing and verification of enrollment and copay information,
particularly in the case of plans serving beneficiaries eligible for
Medicare and Medicaid. System interaction metrics for PDP plan sponsors
will be used in these ongoing monitoring efforts.
Effective Customer Service. Key dimensions
of customer service include timely access for beneficiaries and their
representatives, pharmacists, and other health professionals. CMS is
conducting routine surveys to determine plan compliance with Part D
standards concerning call abandonment rates and percentage of calls
answered within 30 seconds. Plans will receive this analysis to inform
their performance and compliance analysis, and information on the
performance of plan service lines will be publicly available in the
weeks ahead. Complaint rates related to customer service are also an
important consideration for future participation by a plan.
Transition Guidance Compliance. CMS fully
expects PDP sponsors to follow both agency transition guidance and their
own approved transition processes. For example, all PDP sponsors must
provide a temporary supply of non-formulary drugs for 30 days in the
retail setting and 90 days in the long term care setting. In addition
to providing the transition supply, PDP sponsors must also inform their
enrollees of the following key information: (1) the transition supply is
temporary, (2) enrollees need to work with their plan and physician to
switch to a therapeutically appropriate on-formulary drug, (3) they have
a right to request a formulary exception if they or their physician
believe a non-formulary drug is medically necessary, and (4) how to
access the exceptions and appeals procedures. CMS is also monitoring
complaints related to difficulties in completing the transition process.
Strengthen Relationships with Providers through
Avoiding Excessive Burdens in the Exceptions and Appeals Process.
Sponsors should develop a one stop shopping area on their website
that provides ready access to all of the transition, prior
authorization, exception and appeals information and forms that
enrollees and their providers need. CMS will monitor provider wait
times, compliance with exceptions and appeals time frames, and complaint
rates to make certain that the results are satisfactory.
Strengthen Relationships with Pharmacists
through Effective Pharmacy Support. PDP sponsors must comply with
contractual agreements with their participating pharmacies. CMS has
been and will continue to investigate and track pharmacists complaints
about plan compliance with their pharmacy contracts. PDP sponsors are
also expected to implement best practices in pharmacy transactions,
including the use of consistent transaction codes and secondary messages
when a requested prescription fill is denied. Plans must comply with
CMS guidance on cobranding, to ensure that beneficiaries receive
accurate information about the broad range of pharmacies available to
serve them.
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