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Medicare Drug Benefit Update: CMS Issues Guidance Requiring Plans to Offer Broad Coverage of Medications to Treat Mental Illness

June 23, 2005

In a major victory for Medicare beneficiaries living with mental illness, the Centers for Medicare and Medicaid Services (CMS) recently issued guidelines to the private sector plans that will be administering the upcoming Medicare drug benefit requiring them to offer broad uninterrupted coverage of "all or substantially all" medications within specific therapeutic categories. These therapeutic classes include anti-psychotics, anti-convulsants and anti-depressants.

Ensuring broad coverage of medications within these classes was a major priority for NAMI. The new Medicare drug benefit will go into effect on January 1, 2006. Under this new benefit (known as Part D) drug coverage will be offered through private sector prescription drug plans (PDPs) and Medicare Advantage (MA) plans. While the Part D program will be voluntary for many Medicare beneficiaries, it will be mandatory for low-income individuals who are concurrently eligible for both Medicare and Medicaid (dual eligibles).

Over the past 18 months, NAMI has been pushing hard to ensure that these PDPs and MA plans are held accountable for maintaining broad and uninterrupted access to the full range of treatments for illnesses such as schizophrenia, bipolar disorder and major depression. This includes not only covering all of the FDA approved drugs within specific classes, but also limiting the ability of Medicare drug plans to impose restrictive policies such as prior authorization, step therapy, "fail first," or higher tiered co-payment requirements.

The guidance to plans issued last week specifically requires drugs plans to cover "all or substantially all" of the drugs within six categories, including anti-psychotics, anti-convulsants and anti-depressants.

The guidance can be viewed as a "Related File" at the end of this document.

The guidance specifically notes that interruption of therapy within these categories "could cause significant negative outcomes to beneficiaries in a short timeframe." The guidance also notes that such a policy for broad coverage is consistent with practices in the private sector, the Federal Employees Health Benefits Program (FEHBP) and state Medicaid programs. Moreover, the guidance also notes that plans will be required to direct "special attention to patients already stabilized on these drugs before enrollment with a plan." Further, the guidance notes that "for such patients, we generally expect that plans would not use management techniques like prior authorization or step therapy, unless a plan can demonstrate extraordinary circumstances." This is a major step forward in ensuring that drug plans will not be able to restrict access to critical treatments for dual eligible beneficiaries when they transition into Medicare Part D coverage in January.

Coverage of Certain Excluded Drugs

In addition to the guidance on formularies, CMS has also issued guidance to state Medicaid programs on efforts to ensure coverage of certain classes of drugs that were specifically excluded from the Medicare Part D program by Congress. These include benzodiazepines that are commonly prescribed to treat anxiety disorders and acute mania. The Medicare Modernization Act (MMA) legislation passed by Congress in November 2003 specifically barred PDPs and MA plans from covering benzodiazepines, as well as several other categories of drugs. Earlier this month, CMS issued guidance to state Medicaid programs specifically authorizing them to receive federal Medicaid matching funds if they elect to supplement Medicare drug coverage and cover benzodiazepines.

A copy of this letter to State Medicaid programs can be viewed can be viewed as a "Related File" at the end of this document.


Related Files

Medicare Guidance (PDF File)
Letter to State Medicaid Programs (PDF File)