New Medicare Part D Pharmacy Notice Rule In Effect; Stay Tuned for Final Model Notice

Effective January 1, 2012, Medicare Part D plan enrollees who are unable to obtain a prescription drug at the pharmacy are now, in most instances, entitled to a written notice explaining how they can contact their Part D plan in order to initiate an appeal.  On February 2, 2012, CMS announced that the final model notice has been approved by the Office of Management and Budget (OMB) and is now posted on the CMS website. The model notice and instructions can be found here: http://www.cms.gov/MedPrescriptDrugApplGriev/14_PlanNoticesAndDocuments.asp#TopOfPage

According to CMS, a Spanish version of the notice will be posted to the above CMS website once OMB has approved the translated version of the notice.  In order to allow plan sponsors time to comply with this requirement, CMS will not take action for non-compliance until May 1, 2012.

Under current Medicare Part D rules, if a Part D plan enrollee cannot obtain a prescription drug at the pharmacy, the appeals process is not triggered. Rather, enrollees or their representatives must affirmatively contact the Part D plan in order to request a coverage determination (including an “exception request”).  Only once an adverse coverage determination is issued can the appeals process be initiated.[1]

Until this year, a Part D plan and its contracting pharmacies could satisfy their obligations to provide notice about appeal rights to plan enrollees by handing out written notices to each person so affected or by simply posting a notice at the pharmacy.  Section 3312 of the Affordable Care Act requires Part D sponsors, effective January 1, 2012, to “use a single, uniform exceptions and appeals process (including, to the extent the Secretary determines feasible, a single, uniform model form for use under such process) with respect to the determination of prescription drug coverage for an enrollee under the plan”.[2]  As discussed below, this statutory requirement has been interpreted to include distribution of the written notice at the pharmacy.

Regulation & Guidance

Final rules on Medicare Part C and Part D published on April 15, 2011 amended Part D regulations to implement this new requirement.[3]  The regulations require Part D sponsors to “arrange with their network pharmacies to distribute notices instructing enrollees how to contact their plans to obtain a coverage determination or request an exception if they disagree with the information provided by the pharmacist.”[4]  In addition, the regulations note that the “printed point-of-sale (POS) notice will explain how the enrollee can request a coverage determination by contacting the plan sponsor’s toll free customer service line or by accessing the sponsor’s web site”.[5]

On October 14, 2011, CMS issued a memorandum to plan sponsors entitled “Revised Standardized Pharmacy Notice (CMS-10147).”[6]  Among other guidance, the memo states that notice must be provided if a pharmacy that contracts with a Part D plan receives a transaction response indicating the claim is not covered by Part D (even if it is covered by a secondary payer).  It also notes that electronic distribution of a notice is permitted if the enrollee (or appointed representative) has provided an e-mail address and has indicated a preference for that method of communication.   Under the “Q&A” section of the memo, it notes that “[n]otice should not be provided if a drug is covered, but at a non-preferred price.”

Final Model Notice (Not Yet Issued)

Although a draft model notice was published in the federal register for public comment,[7] the Part D point-of-sale notice informing plan enrollees how to request a coverage determination is not yet available online or, presumably, to Part D plans sponsors and their contracting pharmacies.[8]  The “old” notice and accompanying instructions (which permit notice to be provided by a posting on the wall) were still on the CMS website as of the date of this Alert. Once finalized, the notice and accompanying instructions should be available at: https://www.cms.gov/MedPrescriptDrugApplGriev/14_PlanNoticesAndDocuments.asp

Implementation Concerns

Practical problems, remain regarding implementation of this new rule, including how CMS, Part D plan sponsors, and pharmacists interpret the regulatory language requiring issuance of a notice if the beneficiary “disagree[s] with the information provided by the pharmacist.”[9]  In addition, since notice about appeal rights is not required when a drug is covered, but at a non-preferred price, many enrollees will remain unaware that they have a right to request a “tiering exception” that could allow them to obtain a covered drug at a more favorable cost-sharing level.[10]

Conclusion

Many advocates assert that when a drug is denied at the pharmacy, for any reason, an individually-tailored, electronically-generated, written notice should be provided to any Medicare and Medicaid enrollee at the point-of-sale.[11]  The model generic notice required by this new rule falls short of this goal.  Even so, the new notice to be given to each beneficiary whose drug is not covered will be a significant improvement over the simple posting of Part D appeal rights on the pharmacy’s wall, often not easily visible to the public, which had satisfied the notice requirement in the past.


[1] See, generally, Medicare Prescription Drug Benefit Manual, Ch. 18, at: https://www.cms.gov/MedPrescriptDrugApplGriev/Downloads/PartDManualChapter18.pdf
[2]As referenced in previous Alerts, Health Care Reform consists of two separate laws, the Patient Protection and Affordability Care Act of 2010 (PPACA), Pub.L. 111-148 (March 23, 2010), and the Health Care and Education Reconciliation Act of 2010 (HCERA), Pub. L. 111-152 (March 30, 2010). The laws often are collectively referred to as the Affordable Care Act (ACA).
[3] 76 Fed Reg 21471 (April 15, 2011).
[4] 42 CFR §423.562(a)(3).
[5]42 CFR §423.128(b)(7)(iii).
[6]See 10/14/11 CMS Memo re: Revised Standardized Pharmacy Notice (CMS-10147), available at: htt
://mcoaonline.com/content/pdf/20111014-RevStdPharmNotice.pdf
.
[7] The new 2012 Revised Standardized Pharmacy Notice (CMS-10147) see: http://mcoaonline.com/content/pdf/20111014-RevStdPharmNotice.pdf for information on the notice as proposed.
[8]For citations to the draft model notice, see, e.g., the October 14, 2011 CMS memo, referenced above.
[9] 42 CFR §423.562(a)(3).
[10] See, e.g, 42 CFR §423.578(a).
[11] See, e.g., 11/22/10 Letter and Memorandum to former CMS Administrator Dr. Berwick by Sheldon Toubman, New Haven Legal Assistance Association, Inc, on file with the authors.