Consumer protection under Part D

At the outset of the Part D planning process, CMS was concerned that plans could design formularies with a coverage structure that would discourage enrollment of certain beneficiaries, namely those with high Rx expenditures. So the plans were required to use either the model formulary devised by USP and enjoy safe harbor or to design and submit their own formulary structure to CMS for review and approval.

As expected, PDPs are using tiered co-pays to encourage consumers to use the least expensive alternative drug products. Medicare plans, however, have "taken the tools to a whole new level," according to a study by Avalere Health. Instead of 15 to 20 drugs on the specialty tier, Medicare plans have an average of 88 drugs on the fourth (highest) tier that have cost-sharing requirements up to one-third the cost of the drugs. There are plans that have placed specialty medications in a separate tier and limited distribution to a designated group of specialty pharmacy providers, often mail order.

CMS will limit plans in 2007 to only one tier designated as a specialty tier and limit the products in the tier to those with negotiated prices greater than $500 per month. Cost-sharing for specialty tiers will be limited to 25% of the cost of the product up to the point where the plan member enters the coverage gap. Furthermore, products in all tiers must be available through a retail pharmacy unless the product is subject to distribution limits imposed by the FDA.

CMS is monitoring plans closely to be sure that they cover critical drugs. On the other hand, the Medicare Modernization Act specifically prohibits coverage of certain products, and CMS has posted a summary of decisions on specific products, such as combination products, that have caused some confusion about their coverage status. This list is available at http://www.cms.hhs.gov/PrescriptionDrugCovContra/downloads/PartDDrugsPartDExcludedDrugs.pdf.

When a plan member decides that an appeal is necessary, CMS regulations are in place to ensure a speedy disposition. CMS has been tracking complaints. Its emphasis is on transparency, i.e., full disclosure of all consumer-relevant information.

Pharmacists, too, should be buoyed by the responsiveness of CMS and Congress to their concerns. Originally some plans were requiring pharmacies to submit claims within 30 days or face denial of payment. Given the startup pains experienced by Part D, CMS ruled that plans must allow up to 90 days for submitting claims because plan transitions and other factors can legitimately delay claim submission. Legislators, too, have listened to pharmacists and introduced bills that mandate timely payment once the claims are filed. The trade association representing PBMs subsequently announced its pledge to adhere to the industry standard of paying clean claims within 30 days of filing.