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LTCPA: Long Term Care Pharmacy Alliance Providing medicines to over one million of our nation's long-term care residents closeup of elderly face
Policy Newsletter

February 15, 2006 | IN THIS ISSUE:

Prior Authorization Paperwork Requirements Making it Hard for Medicare Beneficiaries to Receive Drugs Covered by their Prescription Drug Plan

The New York Times reports that some Medicare drug plans are requiring doctors to fill out as many as 30 different prior authorization forms as a requirement for Medicare beneficiaries to receive coverage for medications on their plan's formulary. Some plans are requiring prior authorization for whole classes of drugs, such as drugs to treat Alzheimer's disease.

According to the Times, "In its prior authorization forms, Coventry requires doctors to provide details of laboratory test results, "all office notes" and other data to show why certain drugs are needed.

For an osteoporosis drug, Forteo, the company wants to know the patient's bone mineral density, as measured by the "T score." For some AIDS drugs, the doctor has to specify the "viral load" and white blood cell count. In requesting approval for certain antifungal drugs, the doctor must provide a laboratory report identifying the species of the infectious agent.

Other Medicare plans focus on other drugs. The four principal drugs for Alzheimer's disease are all subject to prior authorization under some plans, including ones offered by RxAmerica, a subsidiary of Longs Drug Stores.

Some companies require doctors to report the patient's score on a mental examination before covering certain drugs for Alzheimer's. Insurers say the test is needed to decide whether a patient is likely to benefit.

Read the Full Story (free registration required)..

Nursing Homes & LTC Pharmacies Getting Stuck with Unexpected Medicare Drug Bills

The issue of unpaid claims in the long-term care setting has begun to receive national attention in the news media this past week.

The Cleveland Plains Dealer reports:

Long-term-care pharmacists say the plans are not paying for prescriptions, either because the drug isn't covered or, if it is, because the plans are charging co-pays or deductibles as much as $250 that nursing home residents eligible for Medicaid are not supposed to be charged.

Seven Ohio-based pharmacies are owed more than $1 million for prescriptions for nursing home residents here and in other states.

Jay Meyer, who runs Healthcare Pharmacy outside Dayton, predicted the mess will take months to sort out. He is waiting to be paid $450,000 for 15,000 rejected prescriptions, or more than four times as many rejected claims as he had before the Medicare drug coverage began.

"This creates a major cash-flow problem," said Meyer, who has to meet payroll and pay his vendors. "I have to have money to pay for these drugs to ship them out the door."

The problem isn't confined to certain pharmacies or some plans, said Paul Baldwin, executive director of the Long Term Care Pharmacy Alliance .

To address the problems, Medicare has asked insurance companies to pay for an extra 60-day supply - on top of the previous 30 days - of a noncovered drug, said Jeffrey Kelman, chief medical officer for the U.S. Centers for Medicare and Medicaid Services. The agency has requested that plans give pharmacies another 60 days to bill the plans when prescription payments are rejected .

Read full story...

Also, The Rochester (NY) Democrat and Chronicle reports:

Some nursing homes got a bit of a surprise upon opening their January pharmacy bills. They were charged thousands of dollars for residents' prescription drugs that were supposed to be covered by the new Medicare drug plan. This was especially true for "dual eligible" residents who are covered by both Medicare and the low-income government program, Medicaid.

Nursing homes weren't supposed to pick up the drug tabs. But some drug plans didn't follow guidelines for the dual eligibles and either wrongly charged residents co-payments or didn't cover "first fills" of prescriptions that weren't on the plan's list of covered drugs, among other mistakes, nursing home officials said.

This leaves nursing homes in a tricky situation. They said they'll make sure residents get their drugs and will probably eventually get reimbursed for the costs they're incurring. The problem is the time in between.

Read the full story...

How Many People Have Actually Enrolled in Medicare Part D?

One of the most widely debated issues in the early days of the new Medicare Part D program has been determining the actual number of enrollees. Generally, it has been reported that there are between 3-4 million beneficiaries who have voluntarily enrolled, and around 24 million enrollees when those who have been automatically enrolled in the program, such as the duals are included.

In a recent article, the Detroit Free Press examined those numbers and reported:

CMS includes about 10 million federal retirees and Medicare-age retirees who receive prescription drug coverage through their former employers. But neither group gets its drug benefit directly from Medicare. Still, Health and Human Services claims them as covered beneficiaries because the government system "provides a safety net" for them. In addition, Medicare subsidizes employers who provide retiree benefits to Medicare-eligible retirees.

Read the full story...

CMS Says Lower Part D Costs Means States Owe Less Clawback

As a number of states indicated their intent to launch lawsuits over the level of "clawback"

On February 10 th , CMS issued a series of press releases claiming that due to lower than expected costs of Part D plans, the projected cost of Part D was being reduced, along with the amount of "clawback" states would have to pay. The CMS press release stated:

Overall, states can save money because of Medicare's drug coverage, not only because the federal government now pays for drug coverage for people in Medicaid and Medicare, but also because state governments can get subsidies for their retired employees. States only pay a portion of the costs in the "clawback."

Last week, CMS announced that the net cost to the federal government for the drug coverage in 2006 is expected to be $30.5 billion down from a previously estimated $38.1 billion. The actual or "net" costs to the federal government, accounting for Medicaid savings, are also significantly lower over 10 years, dropping from last year's estimated $737 billion to $678 billion.

For the 10-year period from 2006-2015, the "total" Medicare drug benefit cost, without accounting for Medicaid savings, is now estimated to be about $130 billion less -- $797 billion compared to an estimated $926 billion last year.

State "clawback" payments are now projected to be 25 percent less over this period.

As of last month, about 24 million Medicare beneficiaries now have drug coverage, with about 3.6 million self-enrolled in the new "stand-alone" prescription drug plans and around 300,000 new enrollees in Medicare Advantage plans with drug coverage.

CMS Administrator McClellan Testifies Before Senate Finance Committee

Dr. Mark McClellan, Administrator of CMS, testified before the Senate Finance Committee on the progress of new drug plan. McClellan responded to questions and criticism about the implementation of Part D. Some of the issues discussed included the data problems resulting from new beneficiaries signing up at the end of the month, the alternative of having the government negotiate drug prices, access to mental health drugs, auto-enrollment of long-term care residents in plans that don't serve the area where their nursing home is located, and other issues.

In his written testimony, McClellan outlined a number of measures CMS has taken to address the special needs of long term care residents.

Download the video/audio of McClellan's appearance...

Read the written testimony submitted by McClellan and other panelists...

Q & A With CMS Administrator McClellan

CMS Administrator Dr. Mark McClellan participated in a "Q & A" conference call last week following the issuing of a report on the first month of the new Medicare Part D program.

To listen to CMS questions, www.cms.gov
Under "CMS Highlights," click on " Administrator On The One Month Progress Report On The Medicare Prescription Drug Benefit [mp3 Audio File] "

Senate Bill Would Lock In Formularies

Washington , DC - U.S. Senators Dianne Feinstein (D-Calif.), Susan Collins (R-Maine) and Olympia Snowe (R-Maine) today introduced bipartisan legislation to prevent Medicare prescription drug plans from ending coverage of drugs that were available when seniors enrolled in the plan.

Cosponsors included Senators Byron Dorgan (D-N.D.), Jeff Bingaman (D-N.M.), Senator Lincoln Chafee (R-R.I.), Hilary Rodham Clinton (D-N.Y.), Charles Schumer (D-N.Y.), Patty Murray (D-Wash.), and Barbara Boxer (D-Calif.).

"Seniors deserve the peace of mind to know that access to their prescription drugs will not be abruptly canceled during the course of their annual enrollment," Senator Feinstein said. "There currently is no guarantee that the drug a senior urgently needs will be covered all year, even after taking the senior has taken time to choose a plan at an affordable price. Seniors can't and shouldn't have to wait a year to obtain lifesaving and life sustaining drugs they thought would be covered all year by their drug plan."

Specifically, the Medicare Drug Formulary Protection Act would guarantee seniors that the prescription drugs covered by their plan will continue to be covered the remainder of the calendar year in which they enrolled. For example, seniors who enrolled in a plan in January would be guaranteed access to specific prescription drugs would remain consistent until the following year. Likewise, seniors who become eligible to enroll for the benefit later in the year-say in July or September-would be guaranteed that their prescription drug coverage would be the same until January. Seniors would then have the option of changing plans the next year if the company stopped covering a drug they need.

Read the full press release...