Statement of The Honorable Mark McClellan, M.D., Ph.D., Administrator, Centers for Medicare and Medicaid Services, U.S. Department of Health and Human Services
Testimony Before the Subcommittee on Health of the House Committee on Ways and Means May 03, 2006 Chairman Johnson, Representative Stark, distinguished members of the Subcommittee, thank you for the opportunity
to update you on the new Medicare prescription drug coverage, and especially
the steps we are taking to maximize enrollment as we enter the final days of
open enrollment period. I also want to address the steps that we are taking
concerning preparations for 2007 to make the prescription drug benefit program
even better. I want to take this opportunity to thank those of you who have
participated in CMS’ enrollment events throughout the country. I appreciate
your interest in this topic, but more importantly I am very grateful for your
personal assistance and that of many of your colleagues in driving the
awareness of and enrollment in Part D. Members of Congress have been an
important part of this massive grassroots education effort and I am very
hopeful that this partnership we have created can continue as we begin to drive
greater awareness and use of the prevention benefits which the Congress
included in the Medicare Modernization Act (MMA).
More than
8 million beneficiaries have new individual prescription drug coverage since
the program began and more than 93.8 million prescriptions were filled for
these beneficiaries with drug coverage during March -- averaging 3 million
prescriptions filled per day. The vast majority of beneficiaries are
using their coverage effectively and each week hundreds of thousands of
beneficiaries are enrolling in the new program. CMS has already exceeded the
enrollment target with more than 30 million beneficiaries with drug coverage through
Part D or a former employer as of April 18, 2006. In addition, almost 6 million
Medicare beneficiaries get drug coverage from other sources with prescription
drug coverage such as the Department of Veterans Affairs equal to Medicare.
This brings the total to approximately 36 million Medicare beneficiaries who
are now receiving prescription drug coverage.
According to data collected through
beneficiary satisfaction surveys, 84 percent of seniors enrolled in the
Medicare prescription drug program are satisfied with their coverage and 52
percent say they are enjoying significant cost savings.[1]
Further, a U.S. Chamber of Commerce study shows that 85 percent of enrollees
say their plan covers the medicine they need and a study conducted by the
Kaiser Family Foundation reveals that 82 percent of enrollees who have filled a
prescription under the benefit reported having no problems.[2]
CMS worked with the plans,
pharmacists, States, and hundreds of other partners leading up to the start of
the drug benefit to educate beneficiaries and their caregivers about the their
choices and to help people understand how to make decisions based on cost,
coverage, convenience, and peace of mind. There are still twelve more days to
enroll before the May 15, 2006 enrollment deadline for the year, and we need to
help beneficiaries get the savings and security of prescription drug coverage
now.
We have put into place many
outreach resources to get the information to beneficiaries so they can enroll.
To minimize an anticipated last minute rush to enroll, CMS is making a
monumental effort to enroll beneficiaries as soon as possible. In the last
month, there have been more than 1,880 events per week across the country to
provide beneficiaries with personalized help so they understand the
prescription drug coverage options available to them and so they can enroll in
a plan. I know that you and other Members of Congress have been very helpful
with events in your district as well. I have personally contacted many of the
high enrollment plans to express my concern that they put adequate resources
into their call centers. However, we know there will be a large number of
enrollments as the May deadline approaches. While this may lead to longer wait
times on both our call lines and plan sponsor lines, we have worked with the
plans and we will make every effort to enroll everyone who wants to enroll. But
to minimize problems, you should encourage your constituents to act now.
Millions of seniors and people with
disabilities are already using this benefit to save money, stay healthy, and
gain peace of mind. This includes several million individuals who, because
they also qualify for Medicaid, or the low-income subsidy (LIS), will have very
low or no premiums deductibles and cost sharing. CMS estimates that almost 270
million prescriptions were filled during the first three months of 2006 for all
Medicare beneficiaries with drug coverage. Because of strong competition in
the prescription drug marketplace, there has been slower growth in prescription
drug inflation in recent years, due in part to increasing generic drug
availability. Also, the proliferation of tiered co-payment drug plans and use
of formularies have caused the use of generic drugs to increase and further
slow drug spending growth. Consequently, the new Medicare prescription drug
coverage is costing much less for beneficiaries, taxpayers, and the States than
anticipated.
Beneficiaries are
choosing plans that best meet their needs, leading to coverage that serves them
well and costs less for them and for taxpayers. Enrollment data reveal that
the vast majority of beneficiaries are choosing plans that offer benefits other
than the standard option as defined in the law. They are choosing plans that
have low premiums, no deductibles, fixed copays, and coverage in the gap. In
fact, only 16 percent of prescription drug plan (PDP) enrollees chose the
standard, statutory option and only 5 percent of Medicare Advantage
prescription drug plan (MA-PD) enrollees chose the standard option.
Beneficiaries are also often choosing plans with access to a broad range of
drugs. Beneficiaries eligible for the low-income subsidy have a very
comprehensive benefit, with no coverage gap and usually no deductible.
CMS anticipates that plan sponsors
will consider current enrollment statistics when submitting their bids for
2007, and will limit their plan options accordingly. CMS’ expectations for
plan bids are outlined in the 2007 Call Letter, which I will discuss shortly.
We are hearing
reports from our partners about the cost savings people with Medicare are
experiencing. It is estimated that the Medicare drug benefit will pay on
average about half of total drug spending in 2006 for seniors who are not
eligible for extra help.
The
beneficiaries who qualify for the low-income subsidy receive substantially
greater assistance, with a benefit that will cover on average over 95 percent
of their drug costs.
CMS and Our Partners have Raised
Awareness Nationwide
With the passage of the Medicare Modernization Act
of 2003 and the creation of the Medicare prescription drug benefit, the
Congress posed awareness, education, and operational challenges to CMS
unprecedented in scale or impact since the onset of the Medicare program more
than forty years ago. Notwithstanding a short timeline, CMS has risen to the
challenges as evidenced by the most recent enrollment numbers, which exceed our
target. With the outstanding help of our partners, CMS has instituted a
grassroots initiative across the country, with partnerships which we believe
will last long after the May 15th enrollment deadline. We have an extensive
partnership network with more than10,000 local
partners including senior organizations and centers, youth groups, churches,
civic and social organizations and federal state and local government agencies.
Before implementation of the drug
benefit, CMS provided most information directly to beneficiaries using the
traditional tools, including the Medicare & You Handbook, 1-800-MEDICARE,
and www.medicare.gov. However, with the
passage of the MMA, CMS saw the need to improve our existing tools and to
develop new strategies in order to reach a wider audience and to target
specific hard- to -reach populations, including rural areas and minority
communities. In addition to print, radio and television advertisements, CMS
has a multi-pronged approach to raise awareness and assist beneficiaries and
their caregivers in making decisions about prescription drug plans.
CMS knew from the outset that it
was essential to provide beneficiaries with more hands -on assistance than was
available in our traditional educational materials through outreach events and
one-on-one training. This effort would have to be both a high-touch and
high-tech outreach campaign, with high-tech resources like the personalized
Plan Finder web tool for use by our partners and our beneficiaries, as well as
high-touch efforts involving one-on-one personal contacts using an intricate
web of grassroots partners collaborating and leveraging each other for the
maximum benefit of people with Medicare.
In addition, rather than just
reaching beneficiaries, CMS cast a wider net to reach caregivers, family and
friends of beneficiaries.
During 2004, CMS began reaching out to develop
partnerships, and now the network is incredibly diverse and committed. For
several months, we held training sessions throughout the country to educate our
partners about the benefit structure and the enrollment tools so they could
help raise awareness, educate, and enroll beneficiaries. CMS provided special
training for social service coordinators to help them counsel low-income
seniors. CMS relied heavily on our partner organizations to work with
beneficiaries on a one-on-one basis.
President Bush,
Secretary Leavitt, and I, along with CMS’ regional office staff, have traveled
over 500,000 miles across the country in a mobile office bus to form grassroots
partnerships that help people with Medicare make an informed decision about
prescription drug coverage. About 70 percent of these mobile office stops
have taken place in rural communities throughout the country. Many Members of
Congress have served as honorary chairs for these events and we appreciate
their involvement in forging over 240 grassroots community and statewide
networks, each led by a community partner. The mobile office reached rural
areas across the country to complement our dedicated funding for outreach to
rural areas. Since January 1, 2006, 269 events have involved the participation
of an elected official. We appreciate your participation in outreach and we
welcome your continued involvement in activities to reach beneficiaries.
We have
continued to work harder than ever to help beneficiaries and their loved ones
learn about their drug coverage. Since January, CMS and its partners have
hosted over 22,000 events. Our partner organizations are also providing
personalized counseling by request to help beneficiaries enroll in a plan that
best meets their needs. CMS worked with the Social Security Administration
and various organizations to provide training and conduct outreach to
beneficiaries who may qualify for low-income assistance. In addition, we
forged partnerships with other federal agencies, which have helped to
disseminate information to beneficiaries, especially to those who might qualify
for the low-income subsidy.
Also, CMS
regional offices along with State Health Insurance Assistance Programs (SHIPs),
senior advocacy organizations, and agencies on aging have held thousands of
information and enrollment events. In fact, CMS has more than doubled its
funding to SHIPs since 2003, recognizing the importance of SHIP assistance to
beneficiaries. In 2004, CMS provided more than $21 million and increased that
to more than $31 million in 2005. The funding level will remain high, even
after the initial enrollment period for prescription drug coverage ends, to
ensure that SHIP counselors will continue to play an important role in
educating beneficiaries about the drug benefit and their plan options in the
months ahead.
We recognized that to achieve the promise of the MMA
we would need to reach all segments of the Medicare population, especially
underserved populations and those with language and other cultural barriers. To
target these hard to reach populations, including minority, low-income, limited
English-speaking, homebound, and rural populations, CMS has a contract with the
National Association of Area Agencies on Aging. Strategies included
contracting with Aging Network community-based organizations and nine National
Aging Organizations with local affiliates to conduct outreach to low-income
populations. Thus, we developed specialized campaigns for the African
American, Hispanic, American Indians, and Asian American Pacific Islander
communities, utilizing new partnerships, creating materials in other languages,
and doing specialized paid media campaigns.
In summing up a new set of outreach initiatives for
African-American beneficiaries, Dr. Sandra Gadson, president of the National
Medical Association, has described the importance of this targeted outreach to
specific populations such as African American beneficiaries. “If we think we
have a health disparity crisis in the African American community today, imagine
if we do not succeed in enrolling the most needy of our eligible seniors and
people with disabilities.” She noted that many of the organizations she was
working with had not supported the law, but that it was clearly time to put
politics aside in helping people take advantage of the new coverage…coverage
that for low income seniors, as Jim Firman, of the National Council on Aging
has said, is the most important new health care benefit in 40 years.
These extensive, grassroots-level
partnerships are truly unprecedented for the Medicare program. We are reaching
out to people with Medicare, many people, all over the country …“where they
live, work, play, and pray.” It has completely changed awareness about the drug
benefit, and has helped millions make a decision about Medicare coverage
already. It has helped personalize Medicare in a way that we could never do
from our national offices. And I believe this will be a fundamental and
lasting change in the way that Medicare works. This has been a very exciting
time for CMS as we now have many new important relationships which we will
continue to nurture for future outreach and education efforts aimed at
continuous improvement in the quality of health of the Medicare population.
In addition to
events around the country, we have worked to enhance our traditional methods of
outreach and education. For instance, CMS treats the Medicare & You
2006 handbook, which is mailed to all 42 million beneficiaries and includes
detailed information about the new prescription drug coverage, as a continuous
quality improvement project. Every year, in an effort to make the handbook a
valuable and understandable beneficiary resource that is straightforward and
easy to read, CMS conducts consumer testing of the draft handbook at two
separate stages. Additional testing is sometimes done for specific sections.
CMS also solicits input from our partners, including Members of Congress.
CMS
Prioritizes Customer Service to Our Beneficiaries and Our Partners
As always, customer service is a
priority at CMS to ensure beneficiaries and our partners are given accurate,
timely information. With implementation of a brand new part of Medicare, CMS
understands that people with Medicare, their families, doctors, and pharmacists
will have questions about the new Medicare drug benefit. CMS’ 1-800 MEDICARE Call Center has customer service representatives (CSRs) available to answer
Medicare questions 24 hours a day, seven days a week with assistance in English
and Spanish and many other languages as well. CMS’ helpline and
www.medicare.gov have served as critical
tools for beneficiaries, caregivers, and enrollment assistance centers to sign
up for the prescription drug benefit.
CMS has handled more than 22
million calls between November 15, 2005 and April 24, 2006, and the Agency
takes great care in answering these calls as promptly as possible and providing
accurate, useful information to callers. Because of the great interest in the
new drug benefit, call wait times have been longer than we would like at times.
CMS has worked diligently to improve the wait times caused in part by data
translation problems to ensure accurate information is available in a timely
manner to those seeking assistance. As shown in Figure 1, on average, callers
have experienced wait times of less than two minutes from January to mid-April,
with longer waits sometimes occurring during peak call periods.
Figure 1
Figure 1:
Call Volume and Wait Times to 1-800 MEDICARE
In order to
help beneficiaries understand their drug plan choices and select the plan that
best meets their needs, CMS increased the number of Customer Service
Representatives (CSRs) from 3,000 in June of 2004 to as many as 7,800. We
have also acquired additional infrastructure including telephone lines,
workstations, and seats at call center sites. We have refined our CSR scripts
by reducing redundant information, indexing scripts for quick access, and
including probing questions to help the CSRs better identify the caller’s
concerns. In addition, all beneficiary toll-free numbers were moved to a
single 1-800 number with a centralized Interactive Voice Response (IVR) system,
allowing beneficiaries who call 1-800 MEDICARE to get answers to all Medicare
questions through a single number, which has helped to channel calls
appropriately and improve efficiency. Further, the IVR system was enhanced to
incorporate more plain language, user-friendly functionalities, and synonyms
for common beneficiary terms.
CMS has
implemented a major enhancement through the use of Smart Scripts, which provide
the CSRs with an easily followed path of responses to the most frequently asked
questions. Smart Scripts are a new type of script that has hyperlinks built
into the body of the text. When activated, these hyperlinks will take the CSR
directly to related information about that subject. In addition, we have CSRs
participate in the content workgroups for the actual development of scripts and
job aides. CMS has also implemented a CSR feedback system and streamlined our
approval process for updating the scripts in a timely manner to respond to the
changing needs of our customers or to incorporate policy updates.
All CSRs receive one week of
classroom training followed by two or three additional days of practice calls,
simulation, quality monitoring, and follow-up coaching to ensure peak
performance. CSRs are required to be certified with a written examination and
test calls prior to taking live calls. CMS has taken steps to strengthen the
call centers’ capabilities and reduce wait times in order to address
beneficiaries’ concerns as they arise. CMS hired and trained additional staff
to use the Prescription Drug Plan Finder tool to help beneficiaries get the
information they need to enroll in a drug plan that suits their needs.
I am pleased to say that CMS
customer satisfaction surveys indicate that the bulk of callers who interact
with our CSRs, 87 percent, are satisfied with their experience. They are
particularly pleased with how courteous and patient the CSRs are (rated at 97
percent). These responses came not only from people with Medicare, but also
friends or relatives calling on their behalf, who made up 23 percent of callers
during March 2006.
In addition to beneficiary
satisfaction surveys, CMS also evaluates the 1-800- MEDICARE CSRs through
“mystery shopping” to ensure they are providing accurate and complete responses
to callers. “Mystery shopping” calls are made to CSRs by an independent
specialized quality evaluation contractor who has developed scenarios and
scripts to measure the CSRs on various topics to determine if CSRs are being
“fully responsive.” A response is considered “fully responsive” if all key
points are conveyed to a caller. We have consistently found that the
information provided by the CSRs was fully responsive to the caller’s needs
most of the time.
CMS’ Medicare web site,
www.medicare.gov,
has also been a source of useful information for people with Medicare. Since
the first of the year, our frequently asked questions have been accessed more
than one million times. CMS also has responded
to more than 19,000 e-mails received through the site, with 93 percent of them
being resolved satisfactorily in the first response. In addition, the
medicare.gov web site has been visited more than 829 million times since
January 1, 2006.
With the array of educational tools
available, I am confident that beneficiaries are getting the information they
need to enroll. We have seen steady enrollment since November 15th.
CMS Works with Plans to Improve
Their Customer Service
In addition to this significant
strengthening of our 1-800-MEDICARE capabilities, we have issued guidance to
the plans instructing them to increase the numbers of CSRs in their own call
centers and take other necessary steps to provide timely and effective
responses to inquiries from enrollees and health professionals. Plans have
responded and reported significant increases in the number of CSRs in their
call centers, and as a result, plan performance has improved.
While many plans are now providing
timely phone access, some have not responded adequately. Therefore, CMS has
increased monitoring of plans’ call center activities to help assure a high
level of performance. We are surveying all prescription drug plans to assess
whether they provide correct information to beneficiaries and pharmacists
within a reasonable time. We expect continuing improvements as we address
systems and data transfer issues. The 2007 Call Letter provides specific wait
time metrics to which the plans must adhere, which I will outline shortly.
CMS Provides Caseworkers for One-on-One
Counseling
While millions of prescriptions are
being filled for people with Medicare, CMS is very concerned about those
individuals who are encountering difficulties at the pharmacy counter. This
is certainly distressing for those individuals and their caregivers.
CMS has established a system to
help resolve urgent issues on a case-by-case basis. CMS has hundreds of
trained caseworkers who are working as rapidly as possible to resolve urgent
issues to help ensure that people with Medicare get their prescriptions
filled. CMS urges people with Medicare or their family members who are having
difficulties to call 1-800-MEDICARE, and if necessary, their case will be
forwarded to our caseworkers. Urgent cases have high priority for rapid
resolution.
While the number of individual
cases is small in comparison to the millions of prescriptions and individuals
who are successfully receiving their prescriptions, CMS is committed to
ensuring that every individual receives his or her needed medicines, is
properly identified, and is charged the appropriate copays.
CMS Takes Steps to Identify
Areas of Concern
While considerable progress has
been made, change of this magnitude in such a short time span is bound to
encounter some difficulties. CMS is very concerned about anyone who has
experienced problems in obtaining their medicines. We make no excuses for the
problems. They are important, they are ours to solve, and we are finding and
fixing them. We have and are continuing to take action to address issues so
that all beneficiaries enrolled in a Medicare prescription drug plan can obtain
their medications without incident. CMS also has been correcting data
transmission problems between Medicare, health plans, pharmacists, and the
States.
CMS developed the Complaints
Tracking Module (CTM) to capture complaints CMS receives from beneficiaries,
providers, or plans about prescription drug plans, pharmacies, subcontractors,
and providers. The design of CTM evolved from CMS’ experience with the Medicare
approved prescription drug cards. Because it is a web-enabled system, it can
accept large numbers of daily transactions simultaneously from many users
across the Agency. Information can be efficiently exchanged, which allows for
quicker resolution and accountability. CMS launched the CTM into production
October 3, 2005 and began tracking complaints in January 2006 and we have seen
a general decline in the number of complaints during this time.
In addition, in order to assist
pharmacists, who have been outstanding in their commitment to service, CMS is
working to ensure they have the resources and support they need. CMS is also
coordinating with the States that used their state reimbursement systems to pay
for prescriptions that should be paid by the new Medicare prescription drug
plans. We are also monitoring plan activities and will use our enforcement
measures, if necessary, to ensure they are adhering to the requirements of
participating in the Medicare prescription drug program. The 2007 Call Letter
outlines CMS plan sponsor evaluation criteria. These efforts build on the
preparations that were made long before the January 1, 2006 launch of the
Medicare prescription drug benefit. In addition, the 2007 Call Letter contains
policy statements developed in response to lessons learned during the Part D
program implementation. It also features reiteration of existing program
requirements to emphasize their importance to CMS and to our
beneficiaries.
CMS Applauds and Supports the Outstanding
Work of Pharmacists
Pharmacists are the linchpin of the
prescription drug benefit and all over the country they have been tremendous in
implementing the new program. Traditionally, the start of a new year is one of
the busiest times for pharmacists with new enrollments occurring in commercial
and government plans in January. With the launch of the new Medicare
prescription drug benefit, the task facing pharmacists was an additional
challenge and CMS applauds and supports their tremendous efforts. Pharmacists
are working hard to meet the demands of the new program, and CMS will continue
to provide them and their software vendors and support associations with the
tools they need to serve their customers.
CMS Provides
Dedicated Support to Pharmacists
CMS has provided a number of ways for pharmacists to obtain help in filling
prescriptions for plan enrollees. To help pharmacists identify what plan a
beneficiary is in, CMS collaborated with pharmacists starting in 2004 to create
an electronic eligibility and enrollment query system that operates as part of
their existing computer systems. If the enrollee does not have a card or
proof of enrollment in a prescription drug plan, pharmacists can use this
eligibility system (the E1 system) to obtain information needed to fill the
prescription. Using instructions and updates provided by their software
vendors, retail pharmacists now generally have the ability to perform real-time
eligibility determinations on their existing computer systems. Pharmacists
can also call plans directly, on lines dedicated for pharmacists. They can
contact Medicare’s own CSRs on the toll-free pharmacy support phone lines if
need be, and CMS also has specially trained case workers in our regional
offices who can intervene in special cases to make sure that enrollees get the
medications they need.
To help resolve issues pharmacists
encounter in dispensing medications to those newly enrolled in the Medicare
prescription drug plans, CMS has increased its call handling capacity at the
pharmacist help line. In addition, the line is now available 24 hours a day.
This increased capacity has reduced the wait time to less than a minute for
pharmacists who want to use this mode of communication for eligibility and
enrollment determination.
CMS Supports Simplification
Initiatives
We have heard concerns from
pharmacists about different claims processing and administrative systems used
by the various Medicare prescription drug plans. We have helped make sure
that plans are aware of the challenges posed by their varying requirements. We
have supported external discussion efforts between plan and pharmacy
representatives to make rapid technical progress towards more standardized
electronic responses and prior authorization process for the pharmacists. CMS
remains supportive of this initiative undertaken by the plans and pharmacists
to improve how the new program operates on a day-to-day basis. This is one of
many examples of how various parties are working together to improve the
systems associated with the new program.
CMS has also
identified a number of business process issues that can be simplified for
plans, physicians and beneficiaries. To supplement established prescription
drug reject codes, America’s Health Insurance Plans (AHIP), the National
Association of Chain Drug Stores (NACDS), the National Community Pharmacists
Association (NCPA), and others have announced standardized coding messaging
designed to assist pharmacists and better serve beneficiaries when they fill
prescriptions at pharmacies. Specifically, these standardized electronic
messages will help pharmacists quickly determine the appropriate course of
action for filling beneficiaries’ prescriptions under four different
circumstances: (1) when a particular drug is not covered; (2) when prior
authorization is required; (3) when plan quantity or other coverage limitations
have been exceeded; and (4) when the pharmacy is not part of the Part D plan’s
network.
This consensus agreement on new message coding protocols
will make transaction processing more streamlined and efficient which will save
time and prevent phone calls and delays between plans and pharmacists. This is
important not only for the Medicare drug program, but may produce benefits
throughout our entire health care system, as these and other protocols are
applied to other public and private programs. CMS now views these consistent
messages as best practices for the drug benefit, and we expect all Part D plan
sponsors to adopt and implement these practices as soon as possible. We will be
looking at these and other best practices as measures of plan performance.
To further the goal of simplifying procedures in the new
drug benefit, last week the American Medical Association (AMA) and America's Health Insurance Plans (AHIP), in conjunction with CMS, released a standardized
exceptions form designed to assist physicians in requesting exceptions and
prior authorizations on behalf of Medicare beneficiaries enrolled in Medicare
drug plans. This form allows for a simplified process for physicians to apply
for coverage determinations on behalf of all of their Medicare patients,
regardless of which Part D plan the beneficiary is enrolled in.
In addition to the new messaging
standards, we sent information to the plans which will expedite their processes
for making sure they are not inappropriately paying for drugs that should be
covered under Part B, and we have worked with Epocrates, an electronic
prescribing software company, to ensure that their product provides accurate
and easy access to plan formularies. We’ve also held weekly prescribers’
conference calls and bi-weekly meetings with the AMA and other organizations to
find out what prescribers are experiencing, to supply them with information on
our activities and answer their specific questions.
CMS issued a fact sheet on February
24, 2006 to provide physicians with updated, practical information about the
exceptions and appeals processes. This fact sheet describes the physician’s
role in these processes and emphasizes the short decision-making timeframes.
In addition, on March 24, 2006, CMS held a “Coverage and Appeals” training
session for providers and other CMS partners. We had close to 1,500 sites
calling in for the training, and we conservatively estimate that 3,000 people
were listening in.
CMS Facilitates Creation of the
Pharmacy Quality Alliance
CMS continues to engage in rigorous
outreach to the pharmacy community, through national, state and local pharmacy
organizations and their newsletters and email lists, as well as their standards
organization and technical societies.
I am very
pleased to announce the establishment of the Pharmacy Quality Alliance (PQA).
Similar to the Ambulatory Quality Alliance (AQA), the mission of the Pharmacy
Quality Alliance is to improve health care quality and patient safety, and to
reduce overall healthcare costs. The PQA will use a collaborative process in
which key stakeholders agree on a strategy for measuring performance at the
pharmacy level; collecting data in the least burdensome way; and reporting
meaningful information to consumers, plans, providers, and other stakeholders
to inform choices and improve health outcomes.
The Alliance highlights the role of the pharmacist as a member of the integrated health care
team and recognizes the value the pharmacist can bring to the equation of total
patient care. CMS may further support this collaborative process by
developing a demonstration project to provide further evidence on the impact of
Medication Therapy Management (MTM) and other pharmacist interventions that
could help promote high quality patient care and lower costs in both the
Medicare and Medicaid programs – a win-win for plans, pharmacists, and most
importantly, beneficiaries.
Individuals
with more than one chronic disease often require treatment with several
prescription medications, which increases their risk for drug related
problems. Additionally, they represent a disproportionate amount of health
care expenditures. Each Part D sponsor must have an MTM program for
beneficiaries who have multiple chronic diseases and are taking multiple Part D
drugs with projected annual costs of at least $4,000. The quality of care for
these individuals can be improved and medical costs can be reduced through MTM,
which promotes appropriate medication use, reduces the risk of adverse events,
and optimizes therapeutic outcomes.
MTM programs
may be furnished by a pharmacist or other qualified provider and must be
developed in cooperation with pharmacists and physicians. This creates
opportunities for the pharmacists to play active roles in the MTM services
provided. To realize the full potential of MTM, quality metrics for MTM and
related pharmacy services must be developed so that more can be done to support
high-quality pharmacy care.
Physician Outreach Provides
Information about Formularies, Exceptions, Appeals, and Expedited Requests
Physicians are
a key partner in the implementation of the Medicare prescription drug benefit,
and CMS conducted extensive outreach about formularies, exceptions, appeals,
and expedited requests to promote effective interactions with physicians and
beneficiaries. CMS used the Physicians Regulatory Issues Team (PRIT) web site
to provide advice for providers and an invitation for them to call or email CMS
with issues or concerns about the Medicare prescription drug benefit. In
addition, CMS sent a letter to physicians outlining specific sources of help
and information. Some specific steps we have taken to ease processes for both
physicians and pharmacists include the following:
- A web-based formulary finder
linked to all plan formularies.
- Information about Epocrates, an
electronic handheld and web-based drug and formulary reference for
physicians, that is providing plan formulary information including both
tier and step therapy information and is updated constantly.
- An exceptions and appeals contact
list for each prescription drug plan so physicians can help a patient by
filing an exception or appeal for a medication or a medication’s tier.
- Information about coverage
determinations, exceptions, appeals, and expedited requests.
- AHIP, AMA and others developed a
standardized form that physicians can use to request prior authorization
and coverage for non-formulary drugs.
- To facilitate communications
between pharmacists and physicians, we posted a form for pharmacists to
use to inform physicians that their patient’s plan is requiring use of
another drug, step therapy, or prior authorization.
- We have encouraged plans to
accept prior approval requests by fax, rather than requiring phone calls
from physicians, since that is less time consuming for the physicians.
- A chart and other support tools
to determine quickly if the drug a physician prescribed is a Part B or
Part D drug.
- Information about the CMS
web-based email and weekly conference calls where physicians can get
direct help with their concerns.
Strong Enrollment Trends
Continue
As a result of successful outreach
efforts, participation in the drug benefit is off to a strong start. CMS has
exceeded the enrollment target and over 30 million beneficiaries have drug
coverage from Part D or a former employer. The number of Medicare
beneficiaries receiving coverage continues to grow at a rate of hundreds of
thousands of beneficiaries per week. As shown in Figure 2,
Overall prescription drug coverage
figures as of April 18 are:
- Stand-Alone Prescription Drug
Plans (PDPs): 8.1 million people with Medicare have enrolled in
stand-alone prescription drug plans. This total includes 1 million
beneficiaries who had their enrollment facilitated by CMS. This subset of
beneficiaries were either automatically approved for the low income
subsidy or applied for the subsidy through the Social Security Administration
or states, but had not selected a prescription drug plan on their own.
- Medicare Advantage with
Prescription Drugs (MA-PDs): Nearly 5.8 million beneficiaries receive
coverage through Medicare Advantage plans with drug coverage (MA-PDs).
More than 950,000 MA-PD beneficiaries have signed up on their own since
prescription drug coverage was added to Medicare Advantage plans.
- Medicare/Medicaid: About
5.8 million beneficiaries were automatically enrolled in prescription drug
plans, plus about 500,000 enrolled in Medicare Advantage plans with
prescription drug coverage.
- Retiree Coverage: More
than 6.8 million retirees are enrolled in an employer or union sponsored
plan that has applied for the Medicare retiree drug subsidy. In addition,
about 1.4 million retirees are in employer- and union-sponsored coverage
that incorporates Medicare group drug coverage.
- Federal retiree coverage: 3.5 million
- TRICARE: There are 1.9
million beneficiaries with TRICARE retiree coverage.
- FEHB: There are 1.6
million beneficiaries with FEHB retiree coverage. This figure includes
spouses with Medicare who are covered under a FEHB family policy by
retirees who also have Medicare coverage.
-
Additional Sources of Prescription Drug Coverage for Medicare Beneficiaries:
Approximately 5.8 million Medicare beneficiaries have alternative sources of “creditable”
prescription drug coverage:
- Veterans
Affairs (VA): There are an estimated 3.2 million beneficiaries with
creditable drug coverage through the VA.
- Indian Health Service (IHS): There are an estimated 0.1 million
beneficiaries with creditable drug coverage through the IHS.
- Active
Workers with Medicare Secondary Payer: There are an estimated 2.0
million beneficiaries who are active workers with creditable drug
coverage through an employer group health plan.
- Other Retiree Coverage: An
estimated 500,000 retirees are continuing in coverage from a former
employer or union that supplements individual market Medicare drug
coverage or is not coordinated with Medicare drug coverage.
So, in addition to over eight
million beneficiaries in stand-alone prescription drug plans, many millions
more are getting more comprehensive coverage in Medicare Advantage plans, and
millions more continue to receive retiree coverage—exactly as the law was intended
to work.
Figure 2: Enrollment in Medicare Prescription Drug
Benefit, Medicare Advantage-PDPs, the Retiree Drug Subsidy, FEHBP, and TRICARE[3][4]
In addition to general
participation, CMS research indicates that our partners’ and our outreach efforts
have been particularly successful in minority communities. Seventy percent of Medicare-eligible
African Americans, 75 percent of Asians, and 70 percent of Hispanics have
enrolled in Part D or have coverage from an employer taking the retiree drug
subsidy. These figures exclude FEHB and TRICARE.
Polls show that people are finding
the enrollment process easy and are saving money from participating in the
benefit. An AARP survey found that 78 percent of those enrolled in a Medicare
prescription drug plan say they are satisfied.[5]
An AHIP survey released on March 13,
2006 found that nine out of 10 seniors who are dually eligible
for Medicare and Medicaid say they have experienced no problems using the new
Medicare drug benefit.[6]
According to AARP’s survey, of those surveyed who had prescription drug
coverage before 2006, 63 percent indicated that their Medicare drug plan is
either better or as good as their previous coverage. Further, the survey
found that 40 percent of survey participants thought if Medicare had not added
the new prescription drug benefit, they would need to give up things such as
groceries, full dosages of medication, or cut back on savings.
More than 30 million Medicare
beneficiaries now have prescription drug coverage and CMS is encouraged by the
strong enrollment numbers. Outreach efforts will continue to promote enrollment
for those who have not yet enrolled.
Competition Helps Lower Drug
Prices
Competition in the prescription
drug marketplace and among sponsors of Medicare prescription drug plans have
helped reduce prescription drug costs for Medicare beneficiaries, which a
number of recent studies have illustrated.
CMS analyses demonstrate that
Medicare beneficiaries with common chronic conditions can save a substantial
amount on their drug bills by enrolling in a Medicare prescription drug plan
(PDP) compared to what they would pay with no drug coverage.[7]
For instance, people with Medicare who select the lowest-cost plan in their
area may find savings up to 71 percent off the prices they would pay without
prescription drug coverage. The analysis also demonstrates that a range of
plans available to beneficiaries can provide significant savings. This is
also true for a very broad range of plans if beneficiaries are willing to use
generic versions of their existing drugs, when available, which are required to
have the same active ingredients and work in the same way as the brand-name
drug. These results indicate that beneficiaries can see substantial savings
on their drug bills by focusing on a few plans with the features they prefer –
such as a low premium, or fixed copayments, or coverage in the gap, and low
out-of-pocket costs.
Even larger savings are possible –
as much as 83 percent – by switching to drugs in the same class that treat the
same condition as a beneficiary’s current brand-name drug, for example drugs
that treat common conditions like stomach acid problems, allergic rhinitis,
high blood pressure, and high cholesterol levels. According to Consumers
Union, considering these alternative drugs could save beneficiaries billions
more in drug costs each year.[8]
Beneficiaries can get personalized information on these additional savings from
www.medicare.gov, 1-800-MEDICARE, and many of Medicare’s partners.
A number of external reports
strongly support these findings. For example, the Pharmaceutical Care
Management Association (PCMA) released a study in February 2006 indicating that
Medicare drug plans offer significant price discounts compared to what beneficiaries
would pay without coverage.[9]
The study found that prices under the Medicare prescription drug program were
on average 35 percent less at participating retail pharmacies and 46 percent
less through mail order pharmacies. Further, for 25 commonly used
medications, the PCMA study found savings from 18 percent on brand name drugs
at retail pharmacies to 26 percent at mail order pharmacies. In addition, a
January 2006 report prepared by the Lewin Group demonstrates that beneficiaries
with chronic conditions, particularly those with multiple conditions, will see
significant savings on their prescription drug bills by enrolling in a Medicare
prescription drug plan.[10]
For example, while beneficiaries with one chronic condition will save on
average $396 on their medications with Medicare drug coverage, accounting for
26 percent of their current drug spending, those with four or more conditions
will save an average of $1,774, or 41 percent, on their medications. These
studies have made “apples to apples” comparisons of drug prices available at
retail pharmacies instead of, for example, common, but misleading, comparisons
between retail pharmacy and mail-order prices. In addition, in their recent
forecast of prescription drug spending trends, the independent Medicare
actuaries have concluded that overall drug spending in the presence of the
Medicare drug benefit will be slightly lower when compared to spending in the
absence of a Medicare drug benefit, even though Medicare beneficiaries will be
able to fill millions more prescriptions than would have been possible without
the drug coverage.
Beneficiary premiums are expected to average $25
a month – down from the $37 projected in last July’s budget estimates – and the
overall cost to taxpayers for 2006 has dropped about 20 percent since the July
2005 estimate, according to the CMS Office of the Actuary. The savings result from lower than expected costs per beneficiary;
projected enrollment in the drug benefit has not changed significantly. For
the 10-year period from 2006-2015, the net total cost of the drug benefit to
Medicare is now estimated to be about $130 billion less - $797 billion compared
to an estimated $926 billion last year.[11]
In addition, the state phase-down contributions are now projected to be $37
billion (about 27 percent) less over the 10-year period.
Market Forces Drive Plan Simplification
In addition to reducing the cost of
prescription drugs, market forces are working to simplify the plan offerings,
resulting in more attractive alternatives for beneficiaries. For instance, the
standard plan design calls for a $250 annual deductible. However, to increase
their number of enrollees, 85 percent of sponsors chose to not include a
deductible in their plan design and, in fact, most beneficiaries are selecting
plans without a deductible. CMS is continuing to work on ways to display
comparable plan information to make it as easy as possible for beneficiaries to
review different plan options and make apples-to-apples comparisons between
them. We are encouraged by a recent Washington-Post-ABC News poll, indicating
that three-quarters of enrollees said the paperwork to sign up for the benefit
was easy to complete, and that nearly two-thirds are saving money under the new
program.[12]
Medicare and its partners are
already making available personalized information on important plan features,
and we are working with many outside organizations to enhance the resources
available to beneficiaries to help them identify the specific plan or plans
that are a good fit based on their own preferences. As individuals have
different needs and preferences when it comes to their health-care coverage,
presenting plan features in a way that facilitates comparison on the basis of
plan attributes and performance indicators will make it easier for
beneficiaries to choose the plan with the features that are most important to
them.
In our research, we found that the
vast majority of the new enrollees in stand-alone drug plans have chosen plans
offering a plan design other than the "standard" drug benefit. Many
beneficiaries chose coverage with a low or no deductible, fixed copayments for
most prescriptions instead of coinsurance, and/or coverage in the coverage gap
– coverage options made possible by the strong competition in the Medicare drug
benefit. In fact, as Figure 3 shows, CMS found that nearly 69 percent of PDP
and almost 90 percent of MA-PD enrollees chose a plan with no Part D
deductible. A very small percentage (2 percent) of PDP enrollees selected
plans with a deductible between $1 and $249, and 29 percent of the enrollment
was in plans with a $250 deductible.
Figure 3: Percent of Enrollment
by Deductible Amount
The range of premiums offered by
PDPs varies between $1.87 and $104.89, and the Part D portion of the MA-PD
total premium ranged from $0 to $147.12. The majority of PDP enrollees are in
plans with drug premiums below the national average. In fact, as shown
in Figure 4, while 38 percent of PDP plans offered premiums below $32.20, 73
percent of the beneficiaries enrolled in one of these plans. It appears that
beneficiaries place a high priority on premium when selecting a plan.
Note 1: $32.20 is the 2006 National
Average Premium
Note 2: This is after excluding the
full-benefit dual eligible beneficiaries.
Figure 4: Percent of Plans and
Enrollees by Premium
CMS Automatically
Enrolled Full Benefit Dual Eligible Individuals into Plans
To prevent a lapse in
prescription drug coverage for full benefit dual eligible individuals, CMS
worked diligently to make sure they were enrolled in a Medicare prescription
drug plan before January 1, 2006. In November 2005, any individual who was a full
benefit dual eligible for even one month, beginning in March
2005, was automatically enrolled in a prescription drug plan. While other
individuals generally have the opportunity to change plans only at the end of
the calendar year, dual eligible individuals have the opportunity to change
plans once a month. This flexibility allows them further opportunities
to select a plan that best meets their needs.
CMS has also worked
with the States to identify and auto-enroll individuals who are about to become
full-benefit dual eligible prior to the end of their Medicaid drug coverage to
work toward a seamless transition. This includes those Medicaid individuals
who will age into Medicare or who will reach the end of the 24-month Medicare
disability waiting period. In anticipation
of the shift of drug coverage from Medicaid to Medicare for full benefit dual eligible
individuals, CMS developed a process for a back-up plan at the pharmacy
point-of-sale to ensure that these individuals experience no gap in coverage.
CMS Facilitates Enrollment for
Individuals who Qualify for the LIS
To make sure beneficiaries who
qualify for the low-income subsidy do not miss out on the coverage, we also
facilitated enrollment in a drug plan for beneficiaries who are LIS-enrolled
but did not choose a plan on their own. The group includes not only people who
have applied for and been approved for extra help but also people who are
enrolled in other federal assistance programs such as Supplemental Security
Income and Medicare Savings Programs. This way, we ensured that they do not
miss out on comprehensive, low-cost drug coverage.
In the first phase of this effort,
CMS began mailing letters to approximately 1 million people who are
LIS-enrolled but have not chosen a plan. The letters let them know which
Medicare prescription drug plan they would be enrolled in if they took no action
before April 30th and that their prescription drug coverage would begin on May
1st.
The letter
explains that beneficiaries can choose a different approved plan in their
area. It listed all the prescription drug plans available in their region with
premiums at or below the low-income premium subsidy amount. It also makes
clear that they can decline enrollment if they choose and recommends calling
1-800-MEDICARE to find out more about these plans.
Medicare
beneficiaries who qualify after May 15th for the LIS will have a one-time
opportunity, using a special enrollment period, to enroll in the drug benefit
if they have not already done so. The extra help allows for comprehensive and
valuable drug coverage – in most cases it means beneficiaries must pay just a
few dollars for every prescription – and we want to make sure that people who
need help the most can use this coverage as soon as they become eligible. The
change in status resulting from an LIS determination after May 15th
is an “exceptional circumstance” that warrants a special enrollment period.
This special enrollment period enables these beneficiaries to enroll in a
Medicare prescription drug plan right after they become eligible for the LIS.
Medicare will also continue to facilitate enrollment into a drug plan for
people who qualify for the LIS if they do not choose a plan on their own.
Medicare similarly offers one-time special enrollment periods for other
important changes in status.
CMS Worked to Achieve a Smooth
Transition in Long Term Care Facilities
CMS is committed to ensuring that
the estimated 1.6 million people with Medicare in the 15,800 long term care
(LTC) facilities nation-wide continue to receive the medications and pharmacy
services they need under the new Medicare prescription drug coverage without
interruption. Many “private pay” patients in LTC facilities are getting many
thousands of dollars worth of help with their drug costs for the first time
ever. A majority of individuals in LTC facilities are Medicare beneficiaries,
and many of them also are eligible for Medicaid. Individuals in LTC
facilities represent a unique and vulnerable population because many have
cognitive and/or functional impairments. This population typically has
multiple co-morbidities, the highest utilization of drugs, with an average of
nine medications per day, and the highest spending for prescription drugs
compared to other people with Medicare.
CMS established dedicated fax lines
and mail-in services to allow nursing homes to obtain beneficiary enrollment
information from CMS. This strategy enabled CMS to help nursing homes identify
the plans into which CMS auto-enrolled more than 500,000 residents.
Pharmacists used the electronic eligibility and enrollment verification (E1) system
to identify the remainder of beneficiaries. By notifying plans that their
dual eligible enrollees reside in nursing homes, and by assisting LTC
facilities in working to correct cases where copay information is not up to
date, CMS is ensuring nursing home residents who are full-benefit dual eligible
beneficiaries have access to Medicare drug coverage without premiums and
copays.
CMS Has Taken Specific Steps to
Address Areas Where State Changes are Needed
Under the MMA, coverage for
outpatient drugs for full benefit dual eligible beneficiaries shifted from the
Medicaid program to Medicare Part D. As a result, state Medicaid programs no
longer must pay for high-cost home infusion drugs. Medicare Part D requires
coverage of home infusion drugs that are not currently covered under Parts A or
B of Medicare. While the Part D benefit does not cover equipment, supplies,
and professional services associated with home infusion therapy, it does cover
the ingredient costs and dispensing fees associated with infused covered Part D
drugs. Medicaid federal financial participation (FFP) is available for medical
supplies and services associated with administering the infused drugs. To the
extent that Medicaid covers these supplies and services for its non-dual eligible
Medicaid population, the State must also cover these for full benefit dual
eligibles.
We are committed to making the
distinctions between Part D versus Part B coverage as clear as possible. CMS is
currently working with providers, states, and the home infusion industry to
clarify payment obligations under Medicare for home infusion therapy. In
addition to comprehensive guidance issued in 2005, we recently distributed a
quick reference chart to plans and pharmacists and posted a MedLearn article on
the subject. In March, CMS sent to plans and the State Medicaid Directors
letters clarifying the roles of the Medicare Part D drug program and State
Medicaid programs in providing home infusion drugs and services. The letter
clarified CMS access requirements for home infusion drugs, provided information
about how home infusion drugs must be provided in usable forms, addressed the
need for plans to receive assurances that ancillary services will be provided,
and provided a reminder of the time sensitive nature of home infusion therapy.
Further, we recently sent
information to the plans which will expedite their processes for making sure
they are not inappropriately paying for drugs that should be covered under Part
B, and we have worked with Epocrates, an electronic prescribing software
company, to ensure that their product provides accurate and easy access to plan
formularies. We’ve also held weekly prescribers’ conference calls and
bi-weekly meetings with the AMA and numerous specialty societies to find out
what prescribers are experiencing, to supply them with information on our
activities and answer their specific questions. Finally, on February 13, 2006,
we sent letters to medical specialty groups recommending that providers include
certain additional information on prescriptions that may help plans and
pharmacists differentiate between Part B and D drugs.
CMS Works With States
Since both CMS and the States are
responsible for administering benefits for dual eligible individuals, CMS is
committed to working with States on an ongoing and collaborative basis. CMS
and the States commenced work in August 2004 through a
State Issues Workgroup, which included representatives from State Medicaid
Agencies, the Social Security Administration, and CMS to assure that
States report and CMS knows of every dual eligible beneficiary in the country
undergoing the transition from Medicaid to Medicare drug coverage.
CMS also engaged the
States in a series of summits, conference calls, and workshops to discuss and
address implementation issues associated with the MMA. These
gatherings include monthly all-State conference calls; State Pharmacy
Assistance Program Workgroup conference calls; and conferences hosted by
organizations representing the States. In addition, CMS provided States with
beneficiary enrollment information, comparative information about the plans,
and targeted educational and outreach materials. Finally,
CMS has worked diligently with States to appropriately identify their full
benefit dual eligible individuals.
Reimbursing States for Assisting
in the Transition Process
Despite extensive planning and
preparation, some dual eligible beneficiaries, particularly those who changed
plans late in a month, have had difficulty obtaining their prescriptions at the
pharmacy. Due to these difficulties, 32 States took action to ensure people
received the medicines they needed by activating their state payment systems.
We appreciate the States that supported pharmacists who have faced difficulties
in serving certain dual eligible beneficiaries. States paid for prescriptions
that should have been paid by the new Medicare prescription drug plans, and CMS
believes they should be reimbursed for these expenses.
To that end, we have established a
demonstration project to reimburse the 50 States and the District of Columbia
for costs they incurred by covering drugs that should be covered by the
appropriate plan. Under the demonstration, Medicare will reimburse States by
reconciling drug payments with prescription drug plans, and by paying any
differential between the drug plan reimbursement and Medicaid costs, as well as
certain state administrative costs. Forty-five States and the District of Columbia have been accepted into the demonstration program. Of the States
accepted into the demonstration program, 12 did not activate their state
payment systems and are seeking reimbursement only for administrative costs.
In February we notified states that they could apply for reimbursement for the
help they provided to beneficiaries during the transition until March 8, with
some states receiving extensions until March 31 for costs associated with Part
D claims. By the time that deadline occurred, the vast majority of early
difficulties had been resolved and states no longer needed to provide emergency
back-up.
We are ready to honor our
commitment to states. CMS has extended the deadline for states to incur
administrative costs related to transition full benefit dual eligible
individuals to May 5, 2006. We are currently working through a contractor to
process claims, reconcile with plan sponsors, and begin reimbursing states.
CMS is Correcting Data
Transmission Issues
Transmitting accurate and timely
beneficiary and plan data was paramount in ensuring the prescription drug
benefit could be implemented on January 1, 2006. However, despite everyone’s
best efforts, information sharing between CMS, the States, and the Medicare
prescription drug plans has not always been perfect. Although smooth and
timely data transfers among Medicare; our drug plans, Medicare Advantage plans,
and retiree plans; and 56 States and territories have occurred for most
beneficiaries, we have been working intensively to improve these data
handoffs.
As an additional safeguard in
mid-January, CMS contracted with Electronic Data Systems (EDS) to help CMS work
together with the plans, States, and pharmacies to resolve challenging data
translation issues. CMS has worked diligently to ensure our data systems
interact properly with other systems so that data information exchanges are
accomplished smoothly and completely to correct problems.
Many plans are sending CMS daily
files reflecting their enrollment transactions, and reliably use our responses
to these daily files as well as our weekly summaries of the results for timely
and accurate updates of their systems. Our goal is that plans covering 90
percent of the enrollee population will use these daily and weekly data
transfer processes successfully to reduce lags in obtaining updated beneficiary
information.
To check and further assure the
accuracy of the information exchange between plans and CMS, we have sent
special updated data files to plans, including full copayment information, on
the full dual and low-income subsidy enrollment in plans. Our goal is to
achieve, by ten days before a new coverage month begins, at least a 95 percent
match for enrollment and LIS copayment information on applicable beneficiaries
between Medicare and the plans. We obtained a match rate of greater than 99
percent for duals submitted by the States in the fall of 2005, and we expect to
maintain a high match rate.
CMS is Monitoring
Plan Compliance
It is important to note that the
plans providing drug coverage to people with Medicare are under contract with
CMS. We have the operational responsibility to ensure that the plans are
providing the best services available to our beneficiaries. Toward that end, we
are enforcing compliance with plan contracts, including call center
responsiveness, formulary requirements, appeals processes, and pharmacy
contracting.
Key dimensions of
customer service include timely access for beneficiaries and their
representatives, pharmacists, and other health professionals. HHS is
conducting routine surveys to determine plan compliance with Part D standards
concerning call abandonment rates and percentage of calls answered within 30
seconds. Plans will receive this analysis to inform their performance and
compliance analysis, and information on the performance of plan service lines
will be publicly available in the weeks ahead. Complaint rates related to
customer service are also an important consideration for future participation
by a plan.
We are addressing issues on a
case-by-case basis. While we are responding to complaints, we are also
monitoring trends. This tracking information can lead to corrective action or
sanctions if needed, and will be considered in our contracting decisions for
future years. While most plans are complying with the requirements set forth
in their contracts, we will use the full array of administrative tools and
other enforcement remedies to ensure plans adhere to the terms of their
contracts. When we hear of specific complaints we work with plans to ensure
timely resolution.
Extensive Plan Formulary
Requirements Provide Access to Needed Prescription Drugs
CMS developed a set
of checks and oversight activities to ensure that prescription drug plans offer
a comprehensive benefit that reflects best practices in the pharmacy industry,
as well as current treatment standards. Plan formularies must recognize the
special needs of particular types of people with Medicare, such as individuals
with mental health issues, individuals with HIV/AIDS, individuals living in
nursing homes, people with disabilities, and others who are stabilized on
certain drug regimens. CMS reviewed plan formularies and benefit structures
to verify that they are in compliance with the following critical
requirements: a plan’s formulary must cover multiple drugs in each class with
a minimum statutory requirement of at least two drugs in each approved category
and class (unless only one drug is available for a particular category or
class); and CMS requires that each plan’s formulary include all or substantially
all drugs in each of the following key categories: antidepressants,
antipsychotics, anticonvulsants, anticancer drugs, immunosuppressants, and
antiretrovirals for treating HIV/AIDS.
In addition, each
Medicare prescription drug plan’s formulary was developed and reviewed by the
plan’s pharmacy and therapeutics committee. Each formulary must be consistent
with widely used industry best practices. Furthermore, CMS compared the
prescription drug plans’ use of benefit management tools to the way these tools
are used in existing drug plans to ensure they are being applied in a
clinically appropriate fashion.
Plans must accommodate the needs of
long-term care residents within their formulary structure by providing coverage
for all medically necessary Part D medications at all levels of care.
Coverage of all medically necessary medications may include, but is not limited
to, alternative dosage forms such as liquids that can be administered through
feeding tubes, intravenous medications, or intramuscular injections.
CMS will review any request for
deletion of a drug from a plan’s formulary to ensure continued access to a
broad range of drugs. Plans cannot remove a drug from their formulary
without, among a number of other steps, first obtaining CMS approval and
providing a 60-day advance notice to their affected enrollees. As we deem it
appropriate, we are working to strengthen formulary protections. On April 26,
we changed our policy to better protect Medicare beneficiaries from the sudden
loss of coverage for drugs they currently take. Now, plans that change their
formularies during the year will exempt beneficiaries who are already receiving
the drugs when the change is made. This should provide many beneficiaries with
greater peace of mind that their prescription drugs will remain covered
throughout the plan year. The enrollment period continues for almost two more
weeks and we are encouraging and helping people with Medicare to review their
options and select a plan that works best for them.
In addition, CMS developed specific
procedures for timely exceptions and appeals to ensure that
enrollees receive prompt decisions regarding whether medications are medically
necessary and therefore covered by their prescription drug plan. For example, if the enrollee is requesting coverage of a
non-formulary drug, the drug may be covered if the prescribing physician
determines that all of the drugs on the formulary would not be as effective as
the non-formulary drug or would have adverse effects for the enrollee, or
both. The plan would review the physician’s determination and
must make its decision as expeditiously as the enrollee’s health condition
requires after it receives the request, but no later than 24 hours for an
expedited coverage determination or 72 hours for a standard coverage
determination. We are collecting information on the use of a plan’s
appeals and grievance processes to ensure that each plan is complying with the
requirements.
CMS is Ensuring Pharmacists
Receive Prompt and Accurate Payments from Plans
We have heard from pharmacies about
the early problems they faced in receiving payments from the prescription drug
plans for the services they provided. While new billing and payment cycles
caused cash flow issues at some pharmacies in January, pharmacies now are
receiving payments in regular cycles in accordance with their plan contracts.
CMS is taking compliance with required contractual payments very seriously.
When we hear specific complaints about a plan failing to abide by its contract
with a pharmacy, we investigate and hold the plan responsible for complying
with its contract. Our investigations to date have found that pharmacists are
generally being paid according to their contracts, though some are having other
difficulties, such as not connecting the name of the payer with the
prescription drug plan or facing challenges in matching claim dates with
payment dates, making it difficult to reconcile their financial books. CMS
will continue to investigate and track any complaints from pharmacists
regarding payments, and will take action if we determine that plans are not
following their contractual agreements.
CMS Commitment to Continuous Quality
Improvement demonstrated in Annual Adjustments for 2007
On April 3, 2006 CMS issued the
2007 Call Letter, which provides guidance to existing PDP sponsors as well as
those that are newly applying to enter the program. I would like to take this
opportunity to highlight some of the more significant policies for bidders in
2007.
CMS Anticipates Bids Will More
Clearly Reflect Variations that Beneficiaries Prefer
In order to ensure
that plan choices offered in 2007 clearly meet beneficiary needs and enable
beneficiaries to compare different kinds of plans and confidently choose the
coverage that is best for them, CMS intends to negotiate with PDP Sponsors to
ensure that each benefit package they submit will provide beneficiaries with a
substantially different option. In 2006, we allowed sponsors to offer a wide
array of plan designs in addition to the standard benefit designed by the
Congress. However, as discussed earlier, an overwhelming majority of
beneficiaries are choosing plans that offer benefits other than the standard
option as defined in the law. In 2006, almost 90 percent of beneficiaries were not enrolled
in the standard benefit design, but rather have enrolled in plans with low or
no deductibles, flat payments for covered drugs, and in some cases, coverage in
the coverage gap.
Plans
will continue to have flexibility to offer people with Medicare benefit designs
with these popular features in 2007. However, in general
we expect that more than two bids from a sponsoring organization would not
provide meaningful variation, unless one of the bids is an enhanced alternative
plan. Further, CMS anticipates that plan sponsors will design new plan
options for 2007 in accordance with the enrollment trends in 2006.
CMS
Evaluation Criteria
CMS will issue PDP
Sponsor contractor renewal notices to those Sponsors we have determined, based
on information available to us, continue to be qualified to hold a contract
during 2007. CMS reviews each PDP sponsor’s compliance with all requirements
of the program to determine whether contract renewal is warranted. While many
plans are performing well or achieving significant improvements in key areas of
beneficiary service and support, CMS considers non-renewal if there has been a
substantial failure to comply with program requirements. We pay special
attention to key operational areas which impact customer satisfaction and
successful delivery of the benefit, including effective data systems, customer
and provider service, exceptions and appeals processes and pharmacy support,
which are outlined in more detail below.
Effective
Data Systems
Determining a
beneficiary’s correct enrollment status, including copayment status, lies at
the heart of ensuring his or her access to the Part D benefit. Because
enrollment data are updated much more frequently than previously done in the
Medicare+Choice program, and timely and accurate data processing by plans is
essential, CMS expects sponsors to develop and maintain information systems
that accurately process updated enrollment information at least weekly,
following recommended processing procedures to avoid significant delays or
inaccuracies in processing enrollments.
Effective
Customer Service
CMS expects PDP
Sponsors to provide a high and consistent level of access and service for
beneficiaries and their representatives, pharmacists, and other health care
providers. CMS has updated for 2007 performance standards for certain customer
service and provider contact telephone line operations. CMS is conducting
routine surveys to determine Sponsor compliance with Part D standards. For the
Current and Prospective Enrollee Call Center, CMS provided specific minimum
requirements for hours of operation and the content of information available
from the call centers to address beneficiary inquires. As an example, the call
center must answer 80 percent of incoming calls within 30 seconds, and the
abandonment rate of all incoming calls is not to exceed 5 percent.
For the Pharmacy Technical Help Call Center, Sponsors must operate a toll-free pharmacy technical
help call center to respond to inquiries from pharmacies and providers
regarding the applicant’s Medicare prescription drug benefit. The call center
must operate during the entire period during which the sponsor’s network
pharmacies in their plans’ service areas are open, and must meet the same answering
and abandonment rates as the beneficiary call centers.
For the
Exceptions and Appeals Call Center, Sponsors must operate a toll-free call
center to respond to physicians and other providers for information related to
exceptions and prior authorizations, as well as beneficiary appeals. The call
center must operate during normal business hours and provide a secure
voicemail.
Following Transition Guidance
While the new prescription drug
plans are required to cover medically necessary prescriptions, CMS required
plans to establish an appropriate transition plan for all new
enrollees to address situations where a new enrollee’s prescribed
medications are not on the plan’s formulary. The transition policy allows
beneficiaries to get a temporary supply of their current drugs while they
determine whether a similar on-formulary medicine will work for them. Additionally, CMS recommends that transition plans address
unanticipated enrollee transitions when individuals need to change treatment
settings due to a change in their level of care. In addition to
reviewing Sponsor reports on its transition compliance, CMS is monitoring
complaint rates related to transition coverage of drugs.
Avoiding Excessive Burdens in the Exceptions and Appeals Process
CMS expects PDP
Sponsors to provide prior authorization and exceptions forms and access to
information to make transition procedures straightforward for providers and
patients. PDP Sponsors are expected to limit administrative burdens for
physicians and other providers by implementing recommended best practices for
consistent forms, including steps to obtain formulary exceptions and processes
for providing needed clinical information for processing prior authorization
requests for specialized drugs.
Sponsors must
also have a “one stop” area on their web site that provides needed information
on the procedures, the forms, and the contact information for their prior
authorization and exceptions processes.
Maintain
and Strengthen Relationships with Pharmacists through Contractual Support and
Avoiding Administrative Burdens
PDP Sponsors
must comply with the contractual agreements they have made with their
participating pharmacies, and CMS is monitoring pharmacists’ complaints about
plan compliance with these agreements and other pharmacy requirements of the
Medicare program. Sponsors are also expected to follow recommended best
practices for consistent coding and secondary message responses when formulary,
prior authorization, Part B coverage, or other rejection edits are activated.
CMS Changes
Co-Branding Policy in 2007
In addition to
the abovementioned policy for 2007, based on feedback from beneficiaries and
the health care industry, co-branding names and/or logos of contracted
providers may be confusing to enrollees and unintentionally convey a message
that they can only use the co-branded provider, rather than all participating
providers listed in the plan’s provider or pharmacy directory. Thus, effective
with the beginning of CY 2007 marketing (October 1, 2006), PDP sponsors will
not be permitted to place co-branding names and/or logos on their member
identifications cards.
Anticipating Next Steps
In addition to the actions CMS took
to address issues that arose at the start of the new Medicare prescription drug
benefit, we are looking ahead to ensure we address any issues facing people
with Medicare, caregivers, providers, the plans, and pharmacists in the
future. We are anticipating increased enrollment ahead of the end of the open
enrollment period in May, and we are continuing to optimize systems to limit
problems with coverage at the pharmacy counter on June 1st. In recent weeks,
we have been doing all we can with the support of our partners to help people
find out about and take advantage of the new coverage if they haven’t made a
choice yet. We are drilling down to the census block and neighborhood levels
with our partners—including many of you—where we will be continuing our full
scale effort on education and enrollment events.
In addition, we will continue to
improve data translation among Medicare, the health plans, and States to
continue reductions in the number of rejected or delayed transactions. CMS
also is monitoring plans’ customer service and hotline wait times, while also
providing responsive service through 1-800-MEDICARE. CMS continues to work
with the States participating in the reimbursement program to ensure effective
use of Medicare coverage by connecting beneficiaries to their new Medicare
prescription drug plans and helping pharmacists use Medicare backup systems if
necessary. As implementation continues, and more and more beneficiaries
select and enroll in a new prescription drug plan, CMS will continue to improve
the program and solve problems, guided by the lessons we have learned to
date.
Conclusion
Thank you for the opportunity to
discuss our progress during the first four months of the Medicare prescription
drug benefit. While we are pleased that millions of Medicare prescriptions
are being filled every day, we are going to continue working to ensure every
person with Medicare can use their coverage smoothly. I am happy to answer
any questions you may have.
[1]
U.S Chamber of Commerce, April 25, 2006.
[2]
Kaiser Family Foundation, April 25, 2006.
[3]
MA-PDP enrollments are under-reported as plans update CMS records concerning
the movement of beneficiaries from MA to MA-PD plans.
[4]
Retiree Drug Subsidy enrollment numbers between 12/27/05 and 1/8/06 are
estimates.
[5]
“New Medicare Drug Benefit is Meeting or Exceeding Expectations,” AARP,
Released April 12, 2006.
[6] “Tracking Survey of Seniors Who Are Enrolled in the
Medicare Prescription Drug Benefit”, AHIP, Released March 13, 2006.
[7]
CMS Office of Policy, Analysis of Savings Available Under Medicare Prescription
Drug Plans, March 1, 2006
[8]
"Helping Medicare Beneficiaries Lower Their Out-of-Pocket Costs Under the
New Prescription Drug Benefit," Consumer’s Union, December 14, 2005.
[9]
"Medicare
Drug Discounts Real & Holding Steady", Pharmaceutical Care
Management Association, February 7, 2006.
[10]
The Lewin Group, "Savings From the Medicare Drug Benefit for Beneficiaries
with Chronic Conditions," Prepared for National Health Council, January,
2006.
[11]
CMS Office of the Actuary , February 9, 2006. Actual future
costs of the benefit could be higher or lower than these updated estimates.
[12]
Washington Post, April 12, 2006
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