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Medicare Drug Program
'Co-Branding' Will Be Allowed for Medicare Drug
Plans, Says CMS Clarification
Pay to organizations for referrals to be
'carefully scrutinized'
May 25, 2006 – A report yesterday that Medicare
drug plans will not be allowed to "co-brand" their plans with pharmacies
or other outside organizations, like AARP, has been clarified by the
Centers for Medicare & Medicaid Services, says KaiserNet.org. The new
rule says the practice will be allowed but the associated entities logo
cannot be printed on the member's card. In addition, compensation
between the drug plan and the organization or that could involve the
referral of beneficiaries to a particular drug plan "should be carefully
scrutinized" for compliance with federal fraud and abuse laws, the
guidelines state.
 CMS
Clarifies 2007 Marketing Rules on 'Co-Branding' Medicare Rx Drug Plans
CMS officials on Wednesday clarified that insurers sponsoring
Medicare drug plans in 2007 still will be allowed to partner with
outside organizations to promote their products but will not be
permitted to list the organizations' logos on beneficiaries'
prescription drug cards,
CQ HealthBeat reports (Carey, CQ HealthBeat, 5/24).
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On Tuesday, CMS Deputy Administrator Leslie Norwalk
said in a House Energy and Commerce
Subcommittee on Health hearing that drug plans would be prohibited
from "co-branding" for the 2007 plan year and beyond (Kaiser
Daily Health Policy Report, 5/24). However, in 2007 marketing
guidelines for Medicare drug plans released on Wednesday, CMS said that
co-branding still will be allowed in promotional materials but that drug
plans must not list partner organizations on Medicare drug cards.
According to CQ HealthBeat, co-branding on the drug
cards has confused some beneficiaries who mistakenly think they can only
fill prescriptions at the pharmacies listed on their cards. The
guidelines define co-branding as a relationship between an insurer
sponsoring a Medicare drug plan and another organization that is
designed to promote enrollment in the drug plan (CQ HealthBeat, 5/24).
Drug plans that form co-branding relationships for
2007 must include the phrase "other pharmacies/physicians/providers are
available in our network," the guidelines say (Freking,
AP/San Francisco Chronicle, 5/25).
In addition, any co-branding relationships that
involve compensation between the drug plan and the organization or that
could involve the referral of beneficiaries to a particular drug plan
"should be carefully scrutinized" for compliance with federal fraud and
abuse laws, the guidelines state.
Robert Hayes, president of the
Medicare Rights Center, said the previous policy of listing
co-brands on beneficiaries' drug cards was "creating confusion and
hurting some pharmacies as well." May 31 is the deadline for public
comments on the draft guidelines (CQ HealthBeat, 5/24).
Payments
In other news, a CMS spokesperson said on Wednesday that the agency has
not conducted a formal survey to determine how long it takes pharmacy
benefits managers to pay pharmacy claims under the drug benefit, the
Hill reports (Young, The Hill, 5/25).
Groups representing independent pharmacists said
PBMs in some cases have delayed payments to them by up to 45 days.
However, the
Pharmaceutical Care Management Association, which represents PBMs,
said its members have pledged to process electronic claims within 30
days (Kaiser Daily Health Policy Report, 5/24).
In testimony before the House subcommittee on
Tuesday, Norwalk said, "A recent CMS survey found that up to 18 of the
top 20 [Medicare prescription drug plans] pay pharmacy claims on a
twice-a-month billing cycle of 15 days or less. A 15-day billing cycle
generally provides pharmacies with payment within 21 [to] 25 days.
The top plans account for more than 90% of the drug
coverage for Medicare beneficiaries." However, the CMS spokesperson said
on Wednesday that the agency does not have hard data on billing cycles
and based its figures on an "informal" analysis of reports from drug
plans on when they pay claims.
Pharmacies were not asked about their experiences
with payments, the spokesperson said. Drug plans are required to submit
data on pharmacy claims to CMS by May 31, and the agency will evaluate
and release the information in June, the spokesperson said.
Comments
Rep. Tom Allen (D-Maine), a subcommittee member, said, "For the deputy
director of CMS to come before us and say they have a survey when
they've really just been talking to the plans is something that never
should have happened."
He added, "CMS is so out of touch with the
pharmacies that I suppose it's no surprise that they ask the plans how
the pharmacies are doing."
Rep. Charlie Norwood (R-Ga.), also a subcommittee
member, said, "There needs to be more data there on what's happening."
Crystal Wright, a spokesperson for the Association
of Community Pharmacists Congressional Network, said, "This is
absolutely a one-sided investigation on CMS' part, it seems to me,"
adding, "What CMS is saying is not consistent with what we're hearing"
from pharmacies (The Hill, 5/25).
Editorial
The Senate should "accelerate action on a bill to waive the penalty fee
for senior citizens who missed the May 15 deadline to sign up for the
new Medicare prescription drug benefit," an
Arizona Daily Star editorial states.
According to the editorial, "One of the potential
impediments to getting the bill passed is the concern that some members
of the Senate have about the potential cost of dropping the penalties"
-- an estimated $1.7 billion -- but the "so-called" cost "implies that
existing money will be lost, which apparently is not the case" (Arizona
Daily Star, 5/24).
"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.”
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