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March 25, 2005

Medicare Update

CMS Issues "Transition Plan" Guidance for Dual Eligible Drug Coverage

On March 17, the Centers for Medicare and Medicaid Services (CMS) released long anticipated guidance to Medicare prescription drug plans on their obligation to ensure a smooth transition for persons dually eligible for Medicare Medicaid that will go into the new Medicare drug benefit on January 1, 2006.

NAMI has been especially concerned about what will happen to dual eligible beneficiaries with mental illness when Medicare drug coverage (known as Part D) goes into effect on January 1. Dual eligible beneficiaries will be required to transition to Part D. Those who do not sign up in November, will be "auto-enrolled" in Medicare drugs plans prior to the January 1 effective date.

For more than a year, NAMI has been advocating for a "continuity of care" standard on private sector Medicare drug plans that would require coverage of medications on which a beneficiary is stable when they move over to Part D. Unfortunately, neither the final regulations, nor the recently issued Transition Guidance, contain this requirement. Instead, the Transition Guidance provides specific procedures covering instances where a Part D drug plan excludes a drug from its formulary (the limited list of covered medications) that a dual eligible beneficiary is currently taking that is covered under Medicaid up until December 31, 2005. This includes a recommendation for a drug plan to provide a one-time refill for a transition supply. This transition supply is intended to cover the period in which a plan enrollee will be able to request a permanent exception from the drug plan exclusion of the medication.

Analysis of the CMS Medicare Drug Plan Transition Guidance

Medicare drug plans (including PDPs and Medicare Advantage (MA) plans will be required to have a transition process that addresses educating both beneficiaries and providers to ensure a safe accommodation of an individual's medical needs with the plan's formulary. At a minimum, CMS expects the transition plan to include:

  1. Medical review - Procedures for medical review of non-formulary 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. CMS expects Pharmacy and Therapeutics (P&T) Committees to be involved in developing the procedures for medical review.
  2. Temporary One-time Supply Fills -- In the guidance, CMS recommends that plans consider a process for filling a temporary one-time transition supply. This transition supply is intended to accommodate the immediate needs of a beneficiary that first presents at a participating pharmacy with a prescription for a drug not on the formulary. The guidance assumes (accurately) that many plan enrollees (especially those who are auto-enrolled) are likely to be unaware of what is covered by the plan or what is included in the plan's exception process to provide access to Part D non-formulary drugs. Such practice will address the beneficiary's immediate need and provide time to work out with the prescriber an appropriate switch to another medication or the completion of an exception request.
  3. Transition Timeframes - The guidance states that drug plans will have discretion to decide the appropriate time frame for a one-time transition supply. As a general indicator, CMS believes that a temporary "first fill" supply of 30 days may be reasonable for a new enrollee.
  4. Other Transition Methods - If a drug plan elects not to use the temporary "first-fill" method, CMS expects the sponsor to describe in detail how it will ensure new enrollees who are stabilized on non-formulary drugs will have access to medically necessary drugs without adverse health consequences. CMS anticipates a potential for a high volume of beneficiaries and providers on their behalf needing to file exceptions or needing alternative prescriptions on a short turn-around basis after inception of the benefit on January 1, 2006.
  5. Transition of residents of Long-Term Care (LTC) Facilities - The guidance clarifies that the transition process must take into account the unique needs of residents of LTC facilities who enroll in Part D plans. Sponsors should work with LTC facilities prior to the effective date of enrollment to ensure a seamless transition of the facility's residents. Plans may need to supply a temporary first fill supply order until an appropriate liaison between the facility, the attending physician, and the plan's LTC pharmacy can be achieved. In the guidance CMS is recognizing that LTC residents are likely to be receiving multiple medications for which simultaneous changes could significantly impact the condition of the enrollee (this is also true for people with severe mental illnesses in community settings as well). Thus under the guidance CMS suggests that a transition period of 90 to 180 days might be appropriate for residents of nursing facilities who require some changes to their medication regimen in order to accommodate plan formularies.
  6. Unplanned Transitions - for unplanned planned transitions, the CMS guidance states that beneficiaries and providers need to utilize the plan's exception and appeals process. However, the guidance also encourages plans to adopt the one-time emergency supply process to ensure that enrollees do not have a coverage gap while proceeding through the plan's exception process.
  7. Public Notice - The CMS guidance makes clear that Medicare drug plans must make the transition processes available to beneficiaries in a manner that is similar to information provided on formularies and benefit design.

The CMS Transition Guidance is available at below under "Related Resources"

Additional information on the Medicare drug benefit and the final regulations is available here.

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Related Files

CMS Transition Guidance (PDF File)