Part D E-Letter

A free service for subscribers to AIS’s monthly newsletter Medicare Part D Compliance News.

In this Issue

PBM Tools Help Reduce Cost of Part D, PCMA Says

Six Protected Classes Have Negative Impact on Part D, Survey Says

GAO Wants New Administration to Focus on Medicare Part D

 

PBM Tools Help Reduce Cost of Part D, PCMA Says

The widespread use of generic prescription drugs and other pharmacy benefit management (PBM) tools has resulted in the program costing 30% less than original projections, according to the Pharmaceutical Care Management Association (PCMA).

However, said PCMA President and CEO Mark Merritt, “the program can save even more [money] in years to come” with increased use of additional tools. For example, he recommended use of mail-service pharmacies, e-prescribing technology, and legislation allowing the “FDA to approve generic versions of expensive biotech medications.” Congress should also “resist new initiatives” to increase drug costs, he said.

Visit www.pcmanet.org/.

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The December issue of Medicare Part D Compliance News will include stories on the impact the Obama administration will have on Part D, CMS’s new guidance on Medicare sales commissions, and the investigation into Health Net Inc.’s allegedly inappropriate Medicare marketing tactics.  

For more information on this and other AIS Part D services, please go to www.AISHealth.com/Products/partdproducts.html.

 

Six Protected Classes Have Negative Impact on Part D, Survey Says

Current government regulations requiring Part D prescription drug plans to include all drugs in certain designated classes could be costing U.S. taxpayers an additional $511 million per year, according to a survey by the Academy of Managed Care Pharmacy (AMCP) released Oct. 29.

Under CMS regulations, Part D plan formularies must include “all or substantially all drugs” in six classes of clinical concern — immunosuppressants, antidepressants, antipsychotics, anticonvulsants, antiretrovirals, and antineoplastics.

AMCP surveyed five Part D program administrators with more than 11 million Part D enrollees (approximately 43% of the total number of Part D enrollees). Those surveyed said that having protected classes “limited their ability to effectively negotiate lower costs with manufacturers since it is known that these drugs must be represented in the formulary.” The survey results reflected that rebates on these protected classes of drugs would be increased by up to 15% for certain classes if the protection was removed.

Moreover, Judith Cahill, executive director of AMCP, says that under the Medicare Improvement for Patients and Providers Act of 2008 (MIPPA) enacted in July the cost could increase “substantially.” Under MIPPA, CMS has the authority to designate, as required, classes of drugs that must be included in Part D formularies. “Although enacted with the best intentions, the new law leaves the door open to even higher future costs,” she says.

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GAO Wants New Administration to Focus on Medicare Part D

On its 2009 Presidential and Congressional Transition Web site, the Government Accountability Office (GAO) has provided president-elect Obama’s administration with a “to do” list for Medicare, and one of the focuses of the list is the Part D benefit.

The GAO said that in regard to Part D, “CMS oversight of beneficiary protections” is warranted due to the agency’s “poor management of data collection.”  And “while complaints from beneficiaries to CMS about Part D have declined, complaint data indicates that beneficiaries continued to have problems getting their requests for enrollment and disenrollment in plans processed in 2007,” it said.

With regard to Medicare program management, GAO advised CMS to:

  • improve the consistency, reliability, and usefulness of grievances data reported by plan sponsors for each of their contracts;
  • improve the Part D coverage determination and appeals processes;
  • determine the magnitude of Medicare payments made to stand-alone Prescription Drug Plans (PDPs) under its retroactive coverage policy;
  • determine the impact of its retroactive coverage policy by monitoring PDP reimbursements to Medicare-Medicaid dual-eligible beneficiaries; and
  • work with key partners to plan, prioritize, and execute end-to-end testing to mitigate the risks associated with implementing Part D information systems changes.

Go to www.gao.gov/transition_2009/agency/hhs/improving-medicare-management.php.

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