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Medicare Part D Participant Information - The Medicare Prescription Drug Benefit for Pharmacy

Resources, Questions and Answers, and Links for Medicare Part D Participating Pharmacies and Pharmacists


FREQUENTLY ASKED QUESTIONS ABOUT THE MEDICARE MODERNIZATION ACT

  • What is the Medicare Modernization Act?
  • Who will administer the voluntary drug benefit?
  • Will I be required to sign new contracts with Medicare plan sponsors?
  • When can I expect Medicare contracts in my store?
  • Can my pharmacy be shut out of Part D plans?
  • What is a "preferred pharmacy"?
  • What will plan sponsors typically offer pharmacies for prescription drug reimbursements and dispensing fees?
  • Can plans require people to use mail order?
  • Can any pharmacy provide 90-day supply at retail?
  • Do I need to provide Usual and Customary (U&C) generic pricing to Medicare beneficiaries at the point of sale?
  • Does the MMA have special provisions for long-term care pharmacies?
  • Patients will be tracking and inquiring about catastrophic coverage. How will I know how much out-of-pocket costs patients have incurred?
  • Will low-income beneficiaries be identified by CMS and auto-enrolled into plans again?
  • If on January 1, 2006, an auto-enrolled Medicare beneficiary comes into a pharmacy without a card, how can a pharmacist determine eligibility and bill the correct plan sponsor.
  • The MMA says plans have the option to pay pharmacists for medication therapy management programs (MTMP). What are the reimbursement rates?
  • What beneficiaries will qualify for MTMP?
  • Will drug plans be able to provide medication therapy management through their mail order operations?
  • Does the MMA require that physicians prescribe electronically?
  • Can pharmacists recommend particular prescription drug plans to their patients?

  1. Q: What is the Medicare Modernization Act?
  2. A: The Medicare Modernization Act was passed on December 8, 2003. It established a voluntary drug benefit for Medicare beneficiaries and created a new Medicare Part D. From June 1, 2004 until December 31, 2005 Medicare beneficiaries have the option to purchase an interim Medicare-Approved Drug Discount Card. Starting January 1, 2006 Medicare beneficiaries will have the option to purchase a full prescription drug benefit. This program is completely voluntary.

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  3. Q: Who will administer the voluntary drug benefit?
  4. A: The Centers for Medicare and Medicaid Services (CMS) has identified two categories of entities to facilitate the prescription drug program to Medicare beneficiaries: prescription drug plans (PDPs) and Medicare Advantage prescription drug plans (MA-PDs). PDPs must offer a basic prescription drug benefit. PDPs will be administered by PBMs and other interested parties (such as NCPA’s Community Care Rx, AARP and other non-PBM entities). In conjunction with a managed care plan, MA-PDs must offer either a basic benefit or broader coverage for no additional cost. Medicare Advantage plans were formerly known as Medicare + Choice plans.

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  5. Q: Will I be required to sign new contracts with Medicare plan sponsors?
  6. A: Similar to the contracting process with the Medicare-Approved Drug Discount Cards, since last March you have begun to receive a variety of new or amended contacts arriving in your stores. For plans that you already have existing business relationships with, it is possible that you will receive addendums to your existing contracts. For new business entities, you will likely need to sign a participating pharmacy agreement to provide pharmacy services to their beneficiaries. NCPA will soon be providing more information about Medicare contracts through its Contract Clearinghouse on www.ncpanet.org.

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  7. Q: When can I expect Medicare contracts in my store?
  8. A: PDP and MA-PD plans will need to have their networks in place by mid-July to receive approval as a plan sponsor by CMS. You can expect to receive the majority of Medicare contracts between April and July 2005.

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  9. Q: Can my pharmacy be shut out of Part D plans?
  10. A: Possibly - the MMA contains a provision that any pharmacy that wishes to participate in a Medicare plan can participate - if they accept the standard terms and conditions of the participating pharmacy agreement. However, plan sponsors can develop “preferred networks” that are not open to all providers.

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  11. Q: What is a "preferred pharmacy"?
  12. A: The Medicare Modernization Act included a provision that plan sponsors could tier their network to include “preferred pharmacies.” Part D plans can establish “preferred pharmacies” which can provide more advantageous copays and co-insurances to beneficiaries in exchange for lower reimbursement to participating pharmacies. Plan sponsors will not receive additional government subsidies for preferred pharmacies. Therefore, CMS does not envision that plans will be able to provide significantly better copays and co-insurances at preferred pharmacies and still meet their actuarial equivalence standards.

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  13. Q: What will plan sponsors typically offer pharmacies for prescription drug reimbursements and dispensing fees?
  14. A: CMS will not dictate what plan sponsors should be offering pharmacies in terms of reimbursements and dispensing fees.

    However in section §423.100 of the final rule, CMS determined that the dispensing fee will include only those activities related to the transfer of possession of the covered Part D drug from the pharmacy to the beneficiary, including charges associated with mixing drugs, delivery, and overhead. The dispensing fee will not include any activities beyond the point of sale (that is, pharmacy follow-up phone calls) or any activities for entities other than the pharmacy. Therefore, activities related to drug utilization review (DUR) and medication therapy management services (MTMS), if covered by a plan, would not be included in the dispensing fee but rather billed separately.

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  15. Q: Can plans require people to use mail order?
  16. A: No, plans cannot require enrollees to use a mail-order pharmacy.

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  17. Q: Can any pharmacy provide 90-day supply at retail?
  18. A: Yes, if the participating plan offers a 90-day supply at mail. Section § 423.120(a)(10) of the MMA requires that a Part D sponsor must permit its Part D plan enrollees to receive benefits, which may include a 90-day supply of covered Part D drugs, at any of its network pharmacies that are retail pharmacies. However, a Part D plan may require a beneficiary to pay any additional cost sharing incurred as a result of receiving a 90-day supply at retail.

    If the plan sponsor does not offer a 90-day supply via mail order, the plan is not required to offer a 90-day supply option at retail.

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  19. Q: Do I need to provide Usual and Customary (U&C) generic pricing to Medicare beneficiaries at the point of sale?
  20. A: Under section 1860D-4(k)(1) of the MMA, Part D sponsors will be required to ensure that pharmacies inform enrollees of any price differential between the brand name price and the lowest priced generic version of a covered Part D drug available at that pharmacy . It is the plan’s responsibility to verify that community pharmacies are complying with this requirement.

    Bottom line: When you fill a Medicare prescription that has a generic equivalent, you must indicate the price differential between the price of that brand name drug and the price of the lowest-priced generic version of that drug available at your pharmacy.

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  21. Q: Does the MMA have special provisions for long-term care pharmacies?
  22. A: Yes, all plan sponsors must contract with any willing long-term care provider to provide prescription drugs to Medicare beneficiaries residing in long-term care facilities. Plan sponsors will be required to network with LTC pharmacies separately from regular network contracting.
    • CMS will be assuring that residents of LTC facilities have pharmacy service that meets their specialized needs including:
    • Drug packaging, labeling, and delivery systems for routine LTC medication use (for example, unit dose, packaging in blister packs, bingo cards);
    • Drug delivery service on a routine, timely basis and access to urgent medications on an emergency basis (for example, 24-hour-a-day/7-day-a-week delivery);
    • Pharmacist on call to handle emergency, after hours, and holiday calls;
    • Emergency boxes and log systems;
    • Standard ordering systems and medication inventories; and
    • Drug disposition systems for controlled and non controlled substances in compliance with state and federal requirements.

    CMS will require plans to demonstrate that they have contracts with a sufficient number of LTC pharmacies to ensure "convenient access" to prescription drugs for institutionalized beneficiaries within the service area. CMS expects that each LTC facility will select one or more eligible network pharmacies to provide a plan's long term care drug benefits to its residents.

    Similar access and contracting provisions exist for home infusion and Indian Tribes, Tribal organizations, and urban Indian organization (I/T/U) pharmacies as well.

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  23. Q: Patients will be tracking and inquiring about catastrophic coverage. How will I know how much out-of-pocket costs patients have incurred?
  24. A: TrOOP (true out-of-pocket) costs will determine the start of the catastrophic coverage. Most third-party assistance, such as that from employers and unions, does not count toward the TrOOP threshold. However, contributions from State Pharmaceutical Assistance Program (SPAPs) will count towards TrOOP.

    It is the responsibility of the PDP to monitor TrOOP. On the retail level, there are two ways for pharmacists to monitor TrOOP on behalf of their patients: (1) through a “TrOOP facilitator” or (2) by calling 1-800-Medicare.

    CMS has contracted a TrOOP facilitator to monitor true out-of-pocket costs for Medicare beneficiaries. On the pharmacy level, pharmacists will need to monitor coordination of benefits (COB) for these beneficiaries to know (1) who to bill and (2) in what order to bill for these claims. One of the roles of the TrOOP facilitator is to provide pharmacists with the information needed to properly bill claims (cardholder ID number, group number, BIN, PCN, etc.). Pharmacists will incur an additional switch fee to receive this information.

    To avoid this switch fee, pharmacists can call
    1-800-Medicare. More information about the role of the TrOOP facilitator will be available at www.medicareresourcecenter.com.

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  25. Q: Will low-income beneficiaries be identified by CMS and auto-enrolled into plans again?
  26. A: Yes, CMS will identify low-income beneficiaries and auto-enroll them into participating plans (if they haven’t already chosen one). All Medicare beneficiaries currently entitled to Medicaid will be auto-assigned into a plan this fall and autoenrolled by January 1, 2006 if they have not chosen another plan. On January 1, all dual eligibles (those qualifying for both Medicare and Medicaid) will lose their Medicaid prescription drug benefits. Other low-income beneficiaries (those who have been pre-approved by SSA through its income and asset application) will be auto-enrolled into plans if they have not chosen one by May 15, 2006.

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  27. Q: If on January 1, 2006, an auto-enrolled Medicare beneficiary comes into a pharmacy without a card, how can a pharmacist determine eligibility and bill the correct plan sponsor.
  28. A: There are two ways for pharmacists to determine eligibility and correct billing information: (1) through the TrOOP facilitator or (2) by calling 1-800-Medicare. By using the TrOOP facilitator, the pharmacy will incur a switch fee. To avoid this switch fee, pharmacists can call 1-800-Medicare. More information about the operation of the TrOOP facilitator will be available at www.medicareresourcecenter.com.

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  29. Q: The MMA says plans have the option to pay pharmacists for medication therapy management programs (MTMP). What are the reimbursement rates?
  30. A: Individual prescription drug plans will determine fees associated with medication therapy management programs, which “may (emphasis added) include pharmacists or other providers”. Plans will have the flexibility to establish their own fees, although these fees must take into account the time and resources associated with implementing the medication therapy management program. CMS will require potential PDP sponsors to explain, as part of their applications, how their fees account for the time and resources associated with their medication therapy management program. MA-PD plans are exempt from this provision.

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  31. Q: What beneficiaries will qualify for MTMP?
  32. A: Section §423.153(d) states that a Part D sponsor must have established a MTMP that --
    • Is designed to ensure that covered Part D drugs prescribed to targeted beneficiaries are appropriately used to optimize therapeutic outcomes through improved medication use
    • Is designed to reduce the risk of adverse events, including adverse drug interactions, for targeted beneficiaries;
    • May be furnished by a pharmacist or other qualified provider;
    • and May distinguish between services in ambulatory and institutional settings.

    Targeted beneficiaries as enrollees in the plan who --
    • Have multiple chronic diseases;
    • Are taking multiple Part D drugs;
    • and Are likely to incur annual costs for covered Part D drugs that exceed a predetermined level as specified by the Secretary. This was later defined as $4,000.

    CMS envisions that plans will use system edits – computerized notices that appear on the pharmacists’ computer when a beneficiary fills a prescription – as the most common method for identifying targeted beneficiaries to individuals responsible for providing the services (e.g. pharmacists). CMS expects that plans and pharmacists will coordinate these edits as part of the terms and conditions of their contracts.

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  33. Q: Will drug plans be able to provide medication therapy management through their mail order operations?
  34. A: Yes, mail order operations will be able to provide medication therapy management services. CMS envisions that MTM encompasses different types and levels of service, some of which are appropriate for mail order operations.

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  35. Q: Does the MMA require that physicians prescribe electronically?
  36. A: In an effort to jumpstart the widespread adoption of e-prescribing, the MMA included a provision for an electronic prescription drug program. E-prescribing is voluntary for physicians. However, physicians and other providers who electronically prescribe covered part D drugs for part D enrolled individuals will have to follow national standards, once they are adopted. CMS has proposed to make the compliance date for these e-prescribing standards Jan.1, 2006, so they will be ready for immediate use when the Medicare drug benefit begins.

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  37. Q: Can pharmacists recommend particular prescription drug plans to their patients?
  38. A: Yes, the final rule specifically addresses this question. CMS will rely on pharmacists to identify the best plans for their patients and sign them up. However, pharmacists will need to be able to provide information about all plans (commonly found on http://www.medicare.gov or by calling 1-800-MEDICARE).

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    ADDITIONAL MEDICARE QUESTIONS

 

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