Kindred Pharmacy Services

Medicare is a Federally-operated health insurance program for the elderly, those with disabilities, and those with end-stage renal disease, also known as kidney failure (ESRD). There are currently 41.7 million Medicare enrollees.
The Medicare program is organized, administered, and funded in four distinct parts:

Part A—Acute inpatient hospital and post-acute care (skilled nursing facility and home health) services, including prescription drugs used in inpatient settings;
Part B—Physician services, hospital outpatient services and other kinds of ambulatory care, ancillary services such as clinical laboratory tests and durable medical equipment, and limited coverage of outpatient prescription drugs including physician-administered (i.e., injectable) drugs, immunosuppressives, oral anti-cancer drugs and oral anti-emetics, blood clotting factors, and the drug erythropoietin (EPO) administered to dialysis patients;
Part C—Managed care plans that offer Part A and Part B services together; and
Part D—Outpatient prescription drug coverage, scheduled to take effect January 1, 2006.

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What is the new Medicare drug benefit?

The new drug benefit will provide outpatient drug coverage to Medicare beneficiaries enrolled in private plans that have been approved by Centers for Medicare and Medicaid Services (CMS). Enrollment in this benefit is voluntary, similar to enrollment in the Medicare Part B program. Medicare Part A will continue to cover drugs in the nursing home setting for a Part A stay. When a patient no is longer in a Part A stay the Part D drug benefit will apply. Top

What role will private plans play in administering the new benefit?

The drug benefit will be administered by private health insurers, managed care organizations, and pharmacy benefit managers (PBMs), as specified by the MMA. CMS has created 34 regions, mostly state-based for plan sponsors providing a stand-alone drug benefit and 26 slightly larger regions for plans offering both drug and medical benefits. CMS designed the regions based on current insurance markets and state Medicare population levels. Top

Who is eligible for the new drug benefit?

All Medicare beneficiaries are eligible to enroll in a drug plan. Medicare beneficiaries who are also eligible for Medicaid (dual-eligibles) must enroll in a Part D drug plan. Dual-eligibles who do not choose a Part D plan will be auto-enrolled into one beginning this fall, in order to ensure they have access to drugs. Medicaid will no longer pay for drugs for the dual-eligibles population after January 1, 2006. Top

When will the program start?

By January 1, 2006, all dual-eligibles and by May 15, 2006, all Medicare-only beneficiaries choosing to participate in the benefit will be enrolled. Eligible beneficiaries must enroll by May 15, 2006, or they may face a late enrollment penalty. Top

How will the Medicare drug benefit work?

The Medicare drug benefit has a unique design. Enrollees must pay monthly premiums, which will vary depending on the plan they choose. Most plans will also have an annual deductible and cost-sharing once the deductible has been met. This cost-sharing will likely take the form of copays associated with filling a prescription. The copay levels may vary by the type of drug; for example, there may be one copay amount for generics, and other copay amounts for brand drugs.

At some point during the year, enrollees may face what is called “the donut hole,” where they must pay the entire cost of their medications. After they have reached a catastrophic spending limit, the plan pays for most of their drugs, and they have a small copay.

The MMA envisions a standard benefit, with a $35 premium, a $250 annual deductible, 25% cost sharing up to $2,250 drug spending, a “donut hole” through $5,100 in drug spending, and 5% copays after the $5,100 catastrophic limit is reached. A plan may offer this benefit, or may change the benefit design as long as its benefit is actuarially equivalent to the MMA standard benefit.

Each plan is responsible for tracking their enrollees’ drug spending throughout the year to assess what cost-sharing they are responsible for. It is possible that an enrollee may be responsible for a small copay one month, and the entire cost of the drug the next month. It is also possible that during the year, a beneficiary may become eligible for Medicaid and then may qualify for Part D subsidies. Top

What drugs are covered by the benefit?

The MMA requires that Part D enrollees have access to any medically necessary drug, although their drug plan will likely employ formulary tiered payments and copays as well as other mechanisms to influence drug choice. If a patient needs a drug not on the formulary, there will be systems for getting special consideration for coverage.

The MMA does not specify plans use a particular formulary; rather, each plan will develop its own formulary. CMS will review formularies to determine that they meet several standards. For example, CMS expects the decisions to cover or not cover a drug be made by a pharmacy and therapeutics committee with both independent and geriatric clinicians. CMS also expects formularies to include drugs that are recommended by national treatment guidelines, and for six specific drug classes, that the formulary include all available drugs.

The MMA also requires plans to develop formulary exceptions and appeals processes. CMS has stated that enrollees or their authorized representatives can ask for coverage of a non-formulary drug, ask for a change in the formulary tier for a drug, and appeal a non-coverage decision by a plan. CMS also requires plans to respond to exceptions requests within 24 hours in emergency situations, and within 72 hours for other situations. CMS has stated that plans must pay for an emergency supply of a prescribed non-formulary drug in the nursing home setting in cases where the patient is requesting coverage of that drug. Top

What about benzodiazepines, barbiturates, weight-gain and weight-loss, and over the counter or “OTCs"?

The MMA explicitly excludes Part D plans from covering these drugs, with the exception of OTCs, which can be covered as part of a step-therapy protocol. It is possible that states will continue to cover these drugs as part of their Medicaid programs. Patients on these drugs may need to be transitioned to covered Part D drugs, when appropriate. Top

How will patients be transitioned from their non-covered drug to a formulary drug?

CMS has issued guidelines that require plans to develop policies that set out clear guidelines and timelines for providers to choose alternate, covered drugs for their patients, or to seek exceptions where appropriate. Each plan should provide its transition policy to its network pharmacies and other providers. Top

Will the Medicare Part D drug benefit be the same for Nursing Home residents?

The MMA and CMS regulations do not envision a separate drug benefit or formulary for Long Term Care residents. Residents of nursing homes will have to enroll in one of the plans in their region if they want to participate in Medicare Part D, or if they are dually-eligible, they may be auto-enrolled in a plan this fall. Later, residents will enter the nursing home already enrolled in a plan. They may choose to keep their existing plan, or may prefer to switch to a new plan upon entering a facility, depending on the circumstances. At any time during a nursing home stay, a resident may switch from one drug plan to another without penalty.

Some residents will be responsible for out-of-pocket costs, such as copays, while in the nursing home, just as they were while living in the community. However, most residents – the dual eligibles – will be eligible for special subsidies, which will eliminate their out-of-pocket costs in the nursing home. Top

How will nursing homes be involved?

Residents may need help choosing and enrolling in a Part D plan. Only some plans, for example, may be available to low-income residents because of the subsidy rules. Nursing homes may encourage existing patients and new patients to elect prescription drug plans that best suit their needs while in the facility.

Residents may also need help in getting access to medicines they are prescribed that are not covered by their plan. Nursing home staff may act as designated representatives in the formulary exceptions processes. Top

How will this program work with Medicare Part A, Medicaid, and other commercial insurers?

Residents who qualify for a Medicare Part A stay will continue to have their drug costs paid through the current nursing home services payment system. Residents who qualify for Medicaid but not Medicare, will continue to have their drugs paid for by Medicaid. Private-pay patients with Part D drug coverage will have their medications paid through their prescription drug plan to the pharmacy (subject to plan deductible and copay requirements). Top

How will residents get their medications?

KPS Pharmacy will ensure that there is no disruption in your patients’ medication regimen. KPS Pharmacy will continue to provide you with the same services it currently provides. No resident will be required to get medications from a retail or mail order pharmacy; and it will be possible for KPS Pharmacy to continue to serve your Medicare Part A, Medicare Part D, Medicaid, and private pay residents the same way it always has. Top