Pharmacy Review Services for Medicare Set Aside New York

Perhaps the about significant development on the Medicare Fix Aside (MSA) forepart in the past few years has been the Centers for Medicare and Medicaid Services' (CMS') recent enactment of new policies for calculating future Medicare Part D prescription drug costs for MSA proposals in workers' compensation cases. Effective June 1, 2009, CMS began independently pricing future Part D drugs related to a claimant's workers' compensation injury/disease for MSA purposes.

CMS released its new policies through its April 3, 2009 policy memorandum (hereinafter "April Memorandum") and a subsequently released document entitled CMS Prescription Drug Set-Aside Guidance for Submitters Constructive: June 1, 2009 (hereinafter "RX Guidance" document).

CMS' April Memorandum can exist obtained at

http://www.nuquestbridgepointe.com/docs/uploads/cms_memo_4-six-2009.pdf

CMS' RX Guidance certificate can be obtained at

http://www.nuquestbridgepointe.com/news/uploads/msarxguidance.pdf

CMS' new policies accept fundamentally changed the landscape and introduced an added layer of complexity to claims handling and settlement. CMS' new policies require analysis on three levels: (a) Policy –Understanding CMS' new policies as specifically stated in the April Memorandum and RX Guidance certificate; (b) Practical: Agreement how CMS' practical implementation of its new policies are impacting claims and settlements; and (c) Perspective: Recognizing that current claims and settlement practices may need to exist modified.

Through this article, the writer aims to identify the issue into proper focus. This assay is presented as follows:

Part I:CMS' Prior Approach to RX Drugs (1/1/06 to six/1/09) – Understanding the Prior Mural – Where We Accept Been (p. 2-three)

Office II CMS' NEW RX Drug Policies for MSAs (6/1/09 to Present) – Recognizing & Navigating the New Terrain– Where We Are At present (p. 3-nine)

Part III: Applied Considerations for Claims Treatment & Settlement – What Can I Do to Address the Issue? (p. ix-12)

Part Four: How NuQuest/Span Pointe Tin can Help (p. 15-16) [Page 2]

Office I
CMS' Prior Approach to RX Drugs
(1/1/06 to half dozen/one/09)
Understanding the Prior Mural –
Where We Have Been

Medicare Part D – Brief Background

By mode of background, through the Medicare Modernization Act of 2003 (MMA) the Medicare program began to provide limited outpatient prescription drug coverage as "Part D" of the Medicare program equally of January i, 2006. While Medicare has covered certain in-patient drugs under Part B for a number of years, enactment of Part D was significant in that outpatient drug coverage began to be provided on a calibration non before seen in the plan's history. ⁱ

Part D is provided through "traditional" Medicare (Parts A and B), or via Medicare advantage (Part C) depending on the program in which the beneficiary is enrolled. Function D is a voluntary programme for most beneficiaries. ⁱⁱ The program is provided through individual plans approved by the federal authorities.

Part D is not a monolithic program; rather it is comprised of a variety of different plans. For instance, in 2010 it is estimated that there will be roughly 1,576 prescription drug plans offered nationwide. ³ In terms of construction, Function D does not provide coverage for all classes of drugs. Furthermore, the programme does non pay all of the casher'south costs. Rather, at that place is a yearly premium for Part D followed past a tiered cost sharing model consisting of a co-pay and deductible schedule. ^iv

A detailed examination of Part D's specific program components is beyond the scope of this article. If the reader is interested in learning more than about Part D in terms of program mechanics, components, etc., he/she may wish to consult the resources listed in the endnote following this judgement. ^v

Office D & The MSA – CMS' Initial Approach

With the commencement of the Office D program, CMS released a policy memorandum dated December 30, 2005 through which it announced that MSA arrangements needed to include coverage for Part D prescription drugs for all settlements that occurred on or afterward Jan 1, 2006. ^vi

In society to clarify certain technical points, CMS released a 2nd memorandum dated July 24, 2006 "superceding" the December memorandum. All the same the technical clarifications in the July memorandum, the primary basis of CMS' policy remained the aforementioned equally follows:

All WC settlements that occur on or later January 1, 2006 must consider and protect Medicare's interests when future handling includes prescription drugs along with the future medical services that would otherwise be reimbursable by Medicare. The recommended method to protect Medicare's interests is to include a WCMSA as part of the WC settlement. Even so, if the WC claim settled prior to January one, 2006, the WCMSA proposal does not need to include an corporeality for future prescription drug treatment.

The inclusion of Part D prescription drugs equally function of a MSA is required regardless of whether or not the claimant is currently enrolled in Office D. CMS' policy on this point, which remains in strength at the present time, is set along in the July 24, 2006 Memorandum equally follows:

Question 7: Should submitters include an amount for future prescription drug expenses if the claimant has not enrolled in a Part D plan?

Reply 7: Yes. Claimants who have non enrolled in a Part D plan demand to include future prescription drug expenses in their WCMSA proposals if the current treatment records indicate that the claimant has been prescribed drugs and/or may need future prescription drug handling related to the WC injury.

While CMS required inclusion of Role D prescription drugs as role of MSA calculations, the bureau did not publish any guidelines regarding the pricing methodology for calculating hereafter Part D expenses. ⁷ Initially, CMS was scheduled to embark independently pricing future Function D drug costs every bit of January i, 2007; yet, the agency later abandoned those plans. ^eight

In addition to non establishing a pricing methodology for future Part D expenses, CMS did not necessarily establish a formal review procedure to assess a submitter's drug adding, indicating rather that the submitted amount would be "noted." CMS' "approach" before enactment of its new policies is peradventure best encapsulated by the following statement contained in the July 24, 2006 memorandum:[Page 3]

For a WCMSA proposal received by COBC on or after January ane, 2006, CMS volition provide in its written opinion the total WCMSA amount that adequately protects Medicare'south interests with regard to the claimant's future medical handling. However, CMS' written stance will besides note the submitted prescription drug amount.

The CMS' written opinion will provide the total WCMSA corporeality, which is a combination of the future medical treatment reviewed past CMS and the future prescription drug costs noted in the submitter's cover letter. The parties to the WC settlement must note the total WCMSA amount in the final settlement understanding. Once the final settlement agreement is submitted to CMS' COBC, the claimant and all other parties to the WC settlement can rely on CMS' written opinion regarding whether the WC settlement adequately protects Medicare's interests. ^nine

The lack of specific pricing and other guidelines from CMS created an interesting and difficult challenge for the industry every bit information technology struggled to notice the rest between using the most constructive pricing and calculation method to contain future Part D prescription costs, while at the same time yet reasonably protecting Medicare's interests.

Every bit a event, a variety of dissimilar methods and approaches emerged to address the issue. Examination of these prior methods is beyond the scope of this commodity. For a detailed review of the various approaches that were ordinarily used during the period of January 1, 2006 to June ane, 2009, the reader may wish to review an fantabulous article authored past Patty Meifert entitled Mechanisms for Containing Medicare Function D Prescription Drug Costs in MSA Allocations, Settlement News (June, 2007). This article can be obtained at [click hither]

In general, prior to the enactment of CMS' new policies, common methods used to calculate future Part D costs included (a) boilerplate whole sale toll (AWP), (b) workers' bounty reimbursement rate, (c) bodily billed amount, and (d) lowest accessible cost. Other approaches included generic exchange, reduction via rated age, and in certain circumstances, use of pharmacy utilization reviews. ¹⁰

In addition, calculation using Part D'due south tiered co-pay and deductible formula was a popular (merely controversial) method in some quarters. Under this approach, parties were able to significantly reduce time to come Office D costs by taking advantage of what is referred to as the Role D "donut hole" which is that part of the Role D toll sharing structure where the beneficiary is responsible for 100% of his/her drug costs. ¹¹ For the reasons outlined in Part II of this article, use of the Function D formula, also as other "discounting methods," would now announced to exist prohibited nether CMS' new policies.

With a general understanding of the state of affairs that existed prior to June one, 2009 under our belts, the focus now shifts to how CMS' new policies have significantly inverse the picture.

Role Ii
CMS' NEW Prescription Drug Policies
(6/1/09 to Present)
Navigating the New Terrain –
Where We Are At present

Though the April Memorandum and RX Drug Guidance Document, CMS began independently pricing future Medicare Role D costs regarding workers' compensation MSAs effective June 1, 2009.

To understand the practical impact of CMS' new policies, information technology is helpful to approach the issue from 2 levels: Beginning, it is important to analyze the new directives as stated in the Apr Memorandum and RX Guidance certificate. This aspect is discussed in this department. 2nd, information technology is necessary to assess how CMS is implementing its new guidelines in terms of the actual calculation of the prescription drug allocation amount. This component is examined in Section Three.

CMS'Apr 3, 2009 Memorandum

The starting point in understanding these new changes is CMS' Apr Memorandum.

The April Memorandum sets forth the main components of CMS' new policies in reference to: (a) intent and scope; (b) the pricing methodology to exist used for calculating future Office D drug costs, and (c) how the new policies volition exist applied to what CMS considers "airtight cases" as follows:

Intent & Scope

The basic intent and objective behind CMS' new policies is stated every bit follows:[Page 4]

The purpose of this memorandum is to gear up forth the Centers for Medicare & Medicaid Services' (CMS') procedures regarding the methodology of pricing futurity prescription drug handling costs/expenses in Workers' Compensation Medicare Gear up-Bated System (WCMSA) proposals.

References to "prescription drugs" in this certificate are limited to those prescription drugs covered by Medicare for the treatment of the Workers' Compensation (WC) related injury(ies) and/or illness(es)/disease(s) (hereinafter referred to as "WC injury") at issue. ¹²

Pricing Methodology & Related Matters

Under CMS' new policies, Average Wholesale Price (AWP) is the pricing methodology to be utilized to calculate hereafter Part D covered costs for those drugs related to a claimant's workers' compensation injury/illness. On this point, CMS states:

Effective with consummate WCMSA submissions received by CMS' Coordination of Benefits (COB) Contractor on or afterward June one, 2009, where the WC related injury warrant(s) the demand of prescription drugs for the ongoing treatment of the WC related injury, CMS' independent pricing of the prescription drug amount will exist calculated and priced using average wholesale toll (AWP). The CMS will not use or recognize whatsoever other pricing, discounting, or adding methods when determining the adequacy of the prescription drug amounts in WCMSA proposals. The CMS will apply the following procedures to all WCMSA proposals received on or after June 1, 2009. This procedure will also apply to all closed WCMSA cases that reopen on or after June i, 2009, every bit noted beneath. ¹³ (Accent Added).

In regard to situations where a submitted proposal subsequently June 1, 2009 (a) fails to include an amount for future prescription costs or (b) uses generic pricing where generics are not available, CMS states:

If an entity submits a WCMSA proposal to CMS' COB contractor that does not incorporate an amount for prescription drugs for the treatment of a WC related injury and if, upon further review, CMS deems that the WCMSA warranted the need for prescription drugs for the handling of the WC related injury, CMS will default to pricing using a pricing strategy of AWP for make name drugs in determining the adequacy of the prescription drug amount.

If an entity submits a WCMSA proposal to CMS' COB Contractor and the submitter priced the hereafter prescription drug handling costs/expenses equally being "Generic" and in that location is no "Generic" available, CMS volition default to the AWP pricing for make name drugs in determining the adequacy of the prescription drug amount. ¹⁴

MSAs Submitted Prior to 6/1/09 Where CMS Requested Additional Information Which Was Not Received Until Afterwards 6/ane/09

As stated above, the new policies apply to MSA submissions received past the COBC on or after June i, 2009.

In this regard, a question arises equally to how CMS will handle MSA proposals received prior to June 1, 2009 just for which CMS requested additional information that was non received until after said date . CMS refers to these cases as "airtight cases. "

With respect to "airtight cases," CMS states every bit follows:

The CMS volition apply the following procedures to all WCMSA proposals received on or after June one, 2009. This procedure volition also employ to all closed WCMSA cases that reopen on or later on June one, 2009, as noted below.

Notation: With regard to airtight cases, when the CMS' COB contractor receives the previously requested necessary documentation, the case is considered a new WCMSA submission and the requirements included in all of CMS' electric current published policy memorandums related to: (1) future medical handling; and (2) future prescription drug handling will be practical to the new WCMSA submission. ^xv

CMS' RX Guidance Certificate

The adjacent step in agreement CMS' new policies requires test of the RX Guidance certificate.

Past way of background, following the release of the April Memorandum many questions remained regarding various aspects of CMS' new policies, including the extent to which CMS would consider or take certain approaches for calculating future Office D costs.

In response, CMS released its RX Guidance certificate. The objective of the RX Guidance document is stated every bit follows:

Since the publication of the April 3, 2009 CMS policy memorandum announcing prescription drug reviews, which becomes effective June 1, 2009, submitters of  [Page v] Workers' Compensation Medicare Gear up-bated Arrangements ("WCMSAs") have raised several questions concerning how sure situations will be treated by CMS and the Workers' Compensation Review Contractor ("WCRC").

The issues raised have concerned the following themes, which CMS addresses directly below from a policy and procedural perspective: the source used for evaluating the sufficiency of the prescription drug component of WCMSAs; required documentation; tapering of drug use; expiration of patents; off-label employ; drug utilization review findings; brand name or generic drugs; and multiple manufacturers of a particular drug. ^sixteen

CMS references 8 (eight) specific approaches in the RX Guidance document outlined in their entirety equally follows:

ane. Source for Evaluation of Sufficiency of WCMSA Prescription Drug Component:

The WCRC is using RED BOOK® Drug References to evaluate the sufficiency of the prescription drug component of WCMSAs.

ii. Documentation:

It is imperative that submitters furnish accurate, complete, legible, and electric current medical and prescription drug records for the last ii years that the claimant has been receiving handling in connection with a workers' compensation illness, injury, or disease.

It is CMS' preference that WCMSA proposals are non submitted until the beneficiary or claimant has reached maximum medical comeback or "MMI," as discussed in CMS' July 23, 2001 memorandum, which reads in part "…These set-aside arrangements are typically non created until the individual'southward condition has stabilized and so that it can be determined, based on by experience, what the future medical expenses may be…."

In addition to the qualification of having realized a country of MMI, it is always CMS intention that the beneficiary or claimant receives the advisable medical handling equally adamant past his or her treating physician.

If WCMSA proposals are submitted in one case the casher or claimant has reached a state of "MMI," the prescription drugs used by the casher or claimant should be known. All the same, if the prescription drugs are non obvious from the medical records, it is incumbent upon submitters to define that information to the best of their ability, either through shut coordination with the beneficiary or claimant, or his or her representative, treating doctor(south), and/or pharmacy(ies) where he or she regularly has prescriptions filled. The CMS will determine the sufficiency of the WCMSA proposal equally supported by the medical and other records provided.

Note: Submitters need to account for future prescription drug needs that are reasonably probable and predictable fifty-fifty if recent medical records or claims payment histories practise non demonstrate their current utilise.

For example, short courses of antibiotics are usually required for recurrent urinary tract infections, unremarkably seen with neurogenic bladders. Likewise, a grade of narcotic pain medication is usually necessary for likely future surgery. If non, a bourgeois pricing method for these and other future likely prescription drug needs will exist considered in evaluating the sufficiency of the prescription drug component of WCMSAs, in addition to reviewing current and past treatment patterns specific to the beneficiary or claimant and/or the injury afterwards-effects while being treated.

3. Tapering of Use:

Where the treating physician believes tapering is possible and is in the best interests of the beneficiary or claimant, CMS will consider all evidence in making a WCMSA decision, including medical testify of current actual tapering.

four. Expiration of patent:

Patents for brand name medications do expire and less expensive generic equivalents practice usually become available thereafter. On the other paw, new more than expensive brand proper noun drugs often replace drugs whose patents are expiring. Finally, beneficiaries and claimants may insist on brand-name drugs even where generics are available. All of these concepts, along with the prove submitted in a particular case, volition be considered by CMS and the WCRC in determining the sufficiency of a proposed WCMSA corporeality.

v. Off-label Utilize:

Off-label use of medications in the is both legal and common. Once a drug has been approved for sale by the Nutrient and Drug Administration ("FDA") for one purpose, physicians are complimentary to prescribe it for whatever other purpose that in their professional judgment is both condom and [Page 6] effective. Physicians are not limited to prescribing a drug just for official, FDA-approved indications.

vi. Utilization Review:

Where submitters furnish utilization review reports indicating that a beneficiary or claimant should be taking none, fewer, unlike, or less frequent drugs, this evidence volition exist considered. Reports of actual drug apply from treating physicians will be given more weight than utilization review reports.

7. Brand or Generic :

As stated in the Apr 3, 2009 CMS memorandum, where drugs are indicated and the submitter has non priced drugs, or where a submitter prices for a generic drug where in that location is none, CMS will compare the WCMSA proposal to average wholesale price for brand proper name drugs.

If drugs are indicated, merely the medical and other records are silent or unclear about whether a casher or claimant is taking a make or generic drug and both versions exist, then CMS will compare the WCMSA proposal to the generic drug where the submitter has proposed a generic drug, and CMS will compare the WCMSA proposal to the brand proper noun drug where the submitter has proposed a make name drug or has non proposed a drug at all.

eight. Multiple Manufacturers :

Make-name drugs are but available from one manufacturer, whereas generic drugs are available from multiple manufacturers.

In the absence of supporting documentation concerning prices from generic drug manufacturers within the WCMSA submission, CMS will compare generic drugs in the WCMSA proposal and utilize the lowest priced generic drug equally listed in the Red Volume® Drug References in accordance with the Apr 3, 2009 process memorandum.

The RX Guidance certificate concludes with the following argument:

The CMS wishes to emphasize that CMS and the WCRC will review and consider all documents submitted with a WCMSA proposal. Submitters are encouraged to present any evidence they believe is helpful towards a set aside conclusion. Nothing said in this guidance should be considered a discouragement of that principle.

As well, CMS wishes to stress that while there may be some general guidelines that tin be stated, most determinations residual on the private facts and testify pertinent to the particular claimant whose WCMSA proposal is beingness considered . Moreover, CMS may revisit this guidance periodically and is always seeking and researching new data on these and other subjects that affect the WCMSA review process.¹⁷ (Emphasis Added).

CMS' Awarding of the New RX Policies – "Crunching the Numbers"

The focus now shifts to analyzing but how CMS is implementing its new procedures in exercise.

That is: How is CMS allocating future prescription drug costs? What is the agency requiring? What approaches is the agency taking? How receptive is CMS to accepting the approaches outlined in the RX Guidance document? Early reports back from the trench on these fronts accept been less than encouraging.

While CMS advised that AWP based on Carmine Book was the pricing methodology to be used to calculate prescription drug costs, it is crucial to understand that the agency did non provide any data or sampling regarding how information technology would actually allocate future Part D costs in terms of frequency and duration. Hither is where the bug begin.

It was not until several months after June 1, 2009 when the industry began receiving its mail-June 1, 2009 submission responses dorsum from CMS did it start to realize the exact approaches CMS was employing to actually calculate hereafter Part D allotment amounts. When this piece of the puzzle began to surface, information technology chop-chop became apparent that CMS was utilizing approaches that were yielding unimaginable, unprecedented, and many cases, unreasonable increases in required prescription resource allotment amounts. [Page vii]

This has caused problems in the following respects:

• First, the industry has now learned that CMS is utilizing approaches that can effect in much larger allocations for future Part D drug costs than were always anticipated. This is having an effect on case valuation, MSA projections and settlements.
• Second, at that place is a "zone" of cases that present particular issues. These are cases where MSAs were submitted after June 1, 2009 only before the industry became aware of how CMS would actually allocate future prescription costs.

The primary trouble with these cases is that the parties in many instances reached or finalized their settlements before actually realizing the impact that CMS' actual application of its policies would have. At the time the parties settled these cases, the industry had no idea that CMS would really utilize calculation approaches that would result in the type of increased amounts for time to come drugs costs that started to be returned. This is causing problems as additional amounts (in some instances, quite sizeable sums) are at present needed to fund the prescription allocation in the amount required past CMS.

Every bit parties with cases in this "zone" are realizing, CMS' actual practical application of its new policies is causing meaning problems equally they are either receiving responses back from CMS requiring much larger amounts for future costs than was predictable, or now having to amend the MSA projection prepared during this time period. On a more global level, these issues raise the larger consequence of the need to possibly modify settlement approaches (this issue is discussed in Part III of this article).

Currently, sounds of stunned "sticker shock" tin be heard beyond the industry equally it begins to realize the pregnant bear upon of CMS' bodily awarding of its new policies. To a large extent, it must be remembered that CMS' practical awarding of its new policies is literally unfolding before the industry'southward optics, on a case by case basis. Every bit this "learning" process continues, it is quickly condign apparent that CMS' approach is far from an verbal science in terms of consistency, clarity, or reasonableness.

At the present time it is difficult to outline and analyze every specific approach CMS has been discovered to be taking that has, or could, result in increased prescription allocations. New examples and testify are literally beingness unearthed every day with each submission response received.

Nevertheless, sure "broader castor" observations and problems are emerging that warrant consideration, including:

CMS Allocating Drug Costs Over Claimant's Life Expectancy In Certain Cases*

Ane recurring (and troubling) observation involves CMS' approach in situations where the medical records and payout history practise non document the frequency for a particular drug. In these situations, CMS has been observed to allocate future Part D costs over the claimant'southward total life expectancy.

This practice is resulting in significantly college prescription drug amounts and raises legitimate questions as to the "reasonableness" of this approach, medically and practically. In addition, this arroyo speaks to the larger upshot of the need to consider procuring information from the claimant's treating providers(s) as part of the underlying merits. This is discussed in more detail in Office 3 below.

Drug Tapering*

A popular approach to potentially reduce futurity drug costs is "drug tapering." In the RX Guidance document, CMS states the post-obit regarding drug tapering:

Where the treating physician believes tapering is possible and is in the best interests of the beneficiary or claimant, CMS will consider all show in making a WCMSA conclusion, including medical testify of current actual tapering. (Source: Detail #3 in CMS' RX Guidance Document).

As noted, CMS indicates that evidence of drug tapering volition exist "considered" in sure circumstances. NuQuest contacted CMS in an endeavor to obtain a better understanding equally to the type of information CMS would entertain to back up a reduction of hereafter drug costs via drug tapering. CMS' response to this inquiry indicated that more weight would be placed on the treating physician'southward opinion. In addition, the agency's response suggested that evidence of future predictable tapering from the treating provider may exist considered on a patient specific basis. [Folio viii]

Utilization Reviews *

Some other popular approach to assistance reduce future prescription drug costs are "utilization reviews." In the RX Guidance document, CMS states equally follows:

Where submitters furnish utilization review reports indicating that a beneficiary or claimant should be taking none, fewer, different, or less frequent drugs, this evidence will exist considered. Reports of actual drug utilize from treating physicians volition exist given more weight than utilization review reports. (Source: Detail #6 in CMS' RX Guidance Certificate; Accent added).

On this issue, NuQuest contacted the WCRC in an effort to learn when and to what extent utilization reviews may exist accepted. The information received in response from CMS suggests that that agency is taking a conservative approach in terms of accepting utilization reviews, with more weight being afforded to the opinion of the treating provider(due south).

Thus, at this time, it is unclear to what extent CMS will really take utilization reviews. Appropriately, caution on this front is in order. Along these lines, the author believes due consideration should be given to CMS' indication that information technology will beget more than weight to the opinion of the treating provider as referenced in the above statement from the RX Guidance certificate. While the writer is by no means trying to dissuade the reader from exploring this choice, it would seem prudent non to overestimate the potential effectiveness of this arroyo at this juncture.

On a related front, NuQuest made inquiry to CMS as to whether or not evidence from "medical studies" would be considered. In response, it was indicated that medical studies may be considered to a limited extent in certain situations to address specific issues such equally, overutilization, identifying possible drug interactions, and identifying drugs that may not be appropriate for long terms employ ( i.e. certain post surgical drugs) or should exist discontinued for other reasons (i.e. historic period).

Brand vs. Generic Pricing*

Utilizing generic as opposed to brand name drugs is another pop arroyo to help reduce drug costs.

In the RX Guidance document, CMS states the following regarding generic and make drugs:

As stated in the April three, 2009 CMS memorandum, where drugs are indicated and the submitter has not priced drugs, or where a submitter prices for a generic drug where there is none, CMS will compare the WCMSA proposal to average wholesale price for brand name drugs.

If drugs are indicated, but the medical and other records are silent or unclear nearly whether a beneficiary or claimant is taking a brand or generic drug and both versions exist, then CMS will compare the WCMSA proposal to the generic drug where the submitter has proposed a generic drug, and CMS will compare the WCMSA proposal to the brand proper noun drug where the submitter has proposed a brand name drug or has not proposed a drug at all. (Source: Item #7 in the RX Guidance Document)

In addition to the information contained in the RX Guidance document, NuQuest obtained the following data from CMS regarding "brand vs. generic" pricing:

CMS Will Allocate "BRAND" When*:

1. The medical records and payout history documents that the claimant is taking both generic and brand.

2. The medical records and payout history exercise non indicate brand or generic.

CMS Will Allocate "GENERIC" When*:

1. The medical records bespeak the claimant was prescribed brand and the payout history indicates generic.

2. The medical records and payout history do not certificate either make or generic AND a statement from the prescribing provider indicates generic is acceptable, CMS will allocate generic.

3. The medical records and payout history do not certificate either brand or generic AND a statement from the claimant indicates they are using generic, CMS will classify generic.

*Caveat: The author wishes to stress that the above discussed items are presented for informational purposes just based the data received by NuQuest from CMS and/or the WCRC as of the time this article was drafted. In this regard, the information is not provided, and should not be interpreted, every bit factual proclamations with regard to how CMS and/or the WCRC will in fact calculate future Part D costs and/or otherwise interpret or employ any of its stated directives or "guidance"statements. Furthermore, it must be noted that CMS could always change or modify its approach on these and other issues at whatsoever time. [Page 9]

The observations and data presented in this section are provided as examples of some of the considerations that have emerged at this early juncture of CMS' new policies. The writer recognizes that the reader may have had dissimilar experiences thus far, or received different information from CMS or the WCRC. This would not be surprising, and would but serve to underscore the larger bespeak that CMS' new arroyo to prescription drugs is far from uniformed, consistent or clear at this time.

PART III
Claims Handling & Settlement
What Can I Do to Address the Event?

The significance of CMS' new policies must be recognized, not only in terms of their potential budgetary impact, but in terms of what information technology means in the practical sense of day to day claims handling and settlement practices.

The question becomes: What measures tin or should exist taken equally function of claims treatment to address the result? The author presents the following ideas for consideration:

1. Empathise CMS' new prescription drug policies.

First, 1 must have an agreement of CMS' new policies. These are discussed at length in Part Ii of this commodity.

In summary, CMS' new prescription policies tin can be summarized every bit follows:

• CMS is now independently pricing future Medicare Function D prescription drug costs regarding MSAs. Average Wholesale Price (AWP) based on RED BOOK® Drug References is the pricing methodology CMS is using.
• CMS will not use or recognize any other "pricing, discounting, or calculation" methods.
• CMS' new policies utilize to all workers' compensation MSA proposals received on or later on June 1, 2009, also equally to all "airtight" workers' compensation MSA cases (as that term is defined by CMS) that reopen on or after June one, 2009.
• Through the RX Guidance document, CMS addresses the various approaches it may consider regarding the calculation of futurity RX drug costs. It is unclear at this time to what extent CMS will really accept the approaches outlined therein which could aid reduce future RX drug costs.
• It must exist recognized that CMS has stressed that "while in that location may be some general guidelines that can be stated, almost determinations rest on the individual facts and show pertinent to the particular claimant whose WCMSA proposal is being considered." ¹⁸ Furthermore, CMS had indicated that it may "revisit" its guidelines periodically and is "ever seeking and researching new information on these and other subjects that bear upon the WCMSA process." ¹⁹

2. Recognize the impact that CMS' new policies could take on instance values and settlement.

CMS' new policies could significantly increase instance values and MSA projections. This could occur for a number of reasons, including:

• If parties were using a lower, non-AWP pricing model prior to the new changes, they volition probable experience an increase in futurity prescription drug projections based simply on the fact that the allocations must now exist based on AWP.
• As noted, nether CMS' new policies the agency "will not use or recognize any other pricing, discounting, or calculation methods when determining the adequacy of the prescription drug amounts in WCMSA proposals."

Thus, if parties were using the Role D "donut pigsty" formula, or some other "discounting" approach to reduce the futurity prescription drug projection prior to the new changes, they will feel increased prescription drug costs (and potentially meaning increases based on the specific situation) just past the fact that they volition no longer exist able to reduce the costs past utilizing such approaches.

• As noted in Function II above, at that place is a "zone" of cases that present item concerns. This grouping of cases involves MSAs submitted later on June 1, 2009 but earlier the manufacture became aware of how CMS was actually allocating future prescription costs.

Every bit explained, while the industry was aware of CMS'new pricing methodology, the agency did [Page 10] non provide any information or sampling regarding how it would actually allocate future prescription drug costs in terms of frequency and duration. Once CMS' submission responses started to come dorsum, the manufacture became aware that CMS was utilizing approaches to classify futurity drug costs that were resulting in unprecedented and unanticipated increases for time to come Function D drug costs.

Complicating the matter further is the fact that many of these cases were finalized prior to obtaining CMS approval at a time when the industry had no idea of the applied result of CMS' new policies. This is currently creating obvious and significant bug for the party who assumed the responsibility for funding any corporeality required past CMS over the proposed MSA amount.

• How CMS will really classify future Office D costs will also take a direct affect on many levels. For instance, every bit noted to a higher place, at the present time CMS has been observed allocating future Role D drug costs over the claimant'due south total life expectancy in some circumstances. This obviously could result in significantly higher prescription drug allocations. In addition, the caste to which CMS will accept certain approaches that could help lower the future prescription drug projection, such every bit drug tapering, utilization reviews, and/or any 1 of the other approaches referenced in the RX Guidance certificate remains unclear.

3. Decide whether new approaches to claims handling and settlement practices are in club.

A new mean solar day has dawn. CMS' new policies have totally changed the landscape. Every bit a result, parties need to re-examine their settlement practices to ensure that the contingencies of CMS' new policies, and the existent prospect that time to come prescription costs could be much higher than they have ever anticipated, are properly accounted for.

For example, over the by few years it has become common in some quarters for parties to finalize settlements before obtaining CMS approval of the MSA with one party typically assuming the obligation to fund any amount over the proposed MSA figure in the event CMS required additional funding. This has become a common practise due largely to the fact that MSA allocators became quite proficient in understanding CMS' expectations, which, in plow, resulted in increased starting time time pass/acceptance rates. In those instances when CMS actually came back and required boosted funding, the additional amount often times was relatively reasonable. Thus, the parties had the confidence to proceed with settling before obtaining CMS approving of the MSA.

Nonetheless, given the electric current chaotic and uncertain state of CMS' new policies, finalizing settlement earlier obtaining actual CMS approving of the proposed MSA can cause considerable bug. In this regard, the practice of settling "contingent" upon CMS approval of the proposed MSA (which was normally used at the kickoff of phases of the MSA process years ago) may now demand to be considered again. While the author realizes that this means the case volition need to stay "open," the potential downside of potentially having to fund the type of additional sums CMS could require may outweigh the ideal goal of finalizing the settlement as speedily every bit possible.

On this latter point, from the writer'southward observations and experience, the industry finds itself in a similar state of affairs as it did back in 2001 and 2002 during the infancy of the MSA process. That is, the aforementioned uncertainty and inconsistency that the industry is currently experiencing regarding CMS' pricing of prescription drug costs is similar to the frustration information technology experienced during the early days of the MSA process related to the adding of medical treatment. Accordingly, until some degree of clarity and consistency enters the process, the parties will demand to seriously examine their settlement practices to determine if current practices adequately meet the new realities.

4. Examine options that could possibly help reduce the prescription drug allocation.

Accept a proactive approach to accost the issue head-on as part of claims handling. [Page 11]

There are several options to consider:

• Obtain information regarding anticipated time to come Role D prescription drugs direct from the claimant's treating provider(due south). (Assuming that contact with the claimant's providers in this way is permitted under the law of the subject jurisdiction. Consult with your legal representative to determine whether such contact is in fact permitted in your jurisdiction).

As noted, CMS has indicated that information technology affords greater weight to the opinions of the claimant's treating provider(s). Moreover, in situations where the medical records and payout history do not document the frequency for a detail drug CMS has allocated future drug costs over the claimant's total life expectancy.

Thus, obtaining prove of the claimant's anticipated hereafter Part D prescriptions from the claimant'southward treating provider(south) could play a pivotal role in keeping the hereafter prescription allocation reasonable.

NuQuest'south "Medication Regimen Form" is a tool specifically designed to help the claims adjuster obtain this data from the claimant's treating provider(s). NuQuest has experienced success using this approach. For more information regarding NuQuest'southward "Medication Regimen Course," see page fifteen of this article.

• Make up one's mind if whatever of the approaches outlined in the RX Guidance document could be used to aid reduce projected prescription costs. Remember, while CMS indicates that it volition consider prove from these approaches, it is unclear at this juncture to what extent it will really accept the approaches outlined in the RX Guidance document.
• Obtain a rated historic period to reduce the claimant's life expectancy which tin can be helpful in reducing the number of years over which Function D drug costs will be projected. Remember, rated age usage is governed by CMS' specific directives and guidelines.

five. Increasing sensation at the claims level is imperative for proper claims treatment .

Over the by few months, the author has noticed varying degrees of awareness, noesis and understanding of CMS' new RX policies at the claims level which is causing considerable frustration and confusion. Communicating and educating well-nigh the new changes is absolutely essential for proper claims handling, and to optimize settlement prospects .

Some ideas that may assistance to span the sensation and understanding gap are every bit follows:

Primary Payers:

• CMS' new prescription drug policies should be communicated to all levels of the claims treatment procedure, along with any specific company protocols that should be followed.
• Case valuation and settlement practices may need to exist modified.
• Communicating with defence counsel regarding how the issue will be addressed, including their expected role in this process (if whatsoever), is an of import aspect that should not be overlooked. This is important in terms of ensuring that realistic and meaningful settlement and/or exposure analyses can be prepared.
• Communicate with your MSA vendor or allocator to ensure that yous accept the most upward to date information in terms of approaches CMS is taking, emerging trends, areas of business organization, etc.

Counsel:

• Accost the new changes with your clients and discuss the potential complications and consequences.
• Counsel for the master payers should determine if their customer has any specific protocols or approaches to address the effect and what process (if whatsoever) you have in this process.
• Counsel for the injured worker should educate their clients about the significance of the new [Page 12] changes and the potential complications same present in terms of reaching (and finalizing) settlements.
• Counsel on both sides need to spread awareness of CMS' new policies via discussions with colleague and their participation in professional associations, educational blogs, listservs, etc.

6. Monitor CMS for any changes in policy.

Equally noted throughout this article, CMS' application of its new prescription drug policies in many respects remains in its infancy stages. This is a quickly evolving area and it is essential that the industry closely monitor CMS' future deportment to assess applied bear upon and to make the necessary modifications to claims handling and settlement practices resulting at that place from.

Conclusion

CMS' new policies for the pricing of Part D costs in relation to MSAs is significant from a policy standpoint as it represents the agency's outset endeavour to implement specific guidelines in this area since information technology began to require the inclusion of future Role D covered expenses in 2006.

Perchance more importantly, CMS' new policies are a "call to action" to the industry on a number of levels. The new changes need to be understood and communicated to all levels of the claim procedure. In addition, current claims handling and settlement practices demand to exist assessed, and, if necessary, modified in society to properly meet the new challenges. On a more global scale, mobilization of diverse manufacture and practitioner organizations to address the problem at the agency level (or perhaps even the national level) may demand to be considered.

As office of this process, it must be remembered that major aspects of CMS' new policies remain inconsistent and unclear. Furthermore, legitimate questions of reasonableness are beingness raised in certain areas. Thus, understanding that the industry is presently navigating in uncertain waters is crucial with respect to addressing the issue from a realistic perspective. In this regard, any proclamations of elementary answers or "magic bullets" should be scrutinized, as they would seem to defy an informed, knowledgeable or reasoned assessment of the electric current situation.

NuQuest stands ready to assist the industry in meeting this latest challenge, as it has with all other challenges on the MSA forepart since 2001. NuQuest's Medication Regimen Information Form and Medication Regimen Comparing are specifically designed to assist parties accost the issues and challenges of CMS' new policies. For more data well-nigh these tools, run across pages 15-xvi.

Near the Writer

 Mark Popolizio , J.D. is the Vice President of Customer Relations for NuQuest/Bridge Pointe. Marker as well served as Vice President of the National Brotherhood of Medicare Prepare-Aside Professionals (NAMSAP) from 2006-2008 and remains active with NAMSAP concentrating on educational and legislative matters.

Prior to joining NuQuest, Marker practiced workers' compensation and liability legal defense for 10 years. During this time, he developed a national Medicare exercise which included Medicare Fix-Asides and Medicare Compliance. Mark is very active on the national MSA/Medicare educational and grooming circuit. He is a regularly featured speaker on MSA/Medicare bug earlier carriers/TPAs, country bar associations and industry specific organizations.

Mark has also published several articles on MSA/ Medicare problems. Mark can exist reached at 786-457-4393 or via e-mail at mpopolizio@nqbp.com.  [Page 13]

Endnotes:

¹ The concept of including outpatient prescription drug coverage equally function of the Medicare program has been an idea discussed and debated since the inception of the Medicare program. In 1988, limited outpatient prescription coverage was provided for certain catastrophic injuries via the Medicare Catastrophic Coverage Act. All the same, this coverage was short-lived and was repealed in 1989. See, Prescription Drug Do good Under Medicare, The Henry J. Kaiser Family Foundation, October, 2008, at p. one. (Obtained by the author via http://www.kaiseredu.org/topics_index.asp).

ⁱⁱ Part D is voluntary for virtually beneficiaries. However, individuals who are "dual eligibles" (individuals eligible for both Medicare and Medicaid) and other low income beneficiaries are automatically enrolled into Part D. See, Medicare Prescription Drug Do good – Fact Sail, November, 2009, The Henry J. Kaiser Family Foundation, at p. one (Obtained past the writer via www.kaiseredu.org).

ⁱⁱⁱ The Henry J. Kaiser Family Foundation, The Medicare Prescription Drug Benefit – Fact Sheet, November 1, 2009 at p. 1. (Obtained by the author via www.kaiseredu.org).

⁴ By way of illustration, in 2010 the "standard" Part D monthly premium is will average $38.94. The Part D deductible is $310, followed by a 25% coinsurance up to $2,830 in total drug costs. This is followed past the "donut hole" where the beneficiary pays 100% of his/her drug costs until he/she has expended $4,550 in drug costs (excluding the Office D premium). In the next tier, the beneficiary pays either 5% of total drug costs or $two.50/$6.xxx for each prescription. See, The Henry J. Kaiser Family Foundation, The Medicare Prescription Drug Do good – Fact Sheet, November 1, 2009 at p. i. (Obtained by the author at www.kaiseredu.org).

Note: For the reasons discussed in Part II of this article, use of the Function D co-pay and deductible formula, likewise every bit other "discounting methods," would now announced to be prohibited by CMS' new policies.

⁵ For a more detailed overview of the Part D program, the reader may wish to commence his/her test by reviewing the following resource: Medicare & You 2010 accessible at www.medicare.gov; Your Medicare Benefits accessible at www.medicare.gov; and the many splendid resource materials published by the The Henry J. Kaiser Family Foundation (website: www.kff.org).

^six Gerald Walters, CMS Memorandum to All Regional Administrators, "Part D and Workers' Compensation Medicare Set up-Bated Arrangements (WCMSAs) Questions and Answers," December 30, 2005.

⁷ Gerald Walters, CMS Memorandum to All Regional Administrators, "Questions and Answers for Function D and Workers' Bounty Medicare Set-aside Arrangements," July 24, 2006, FAQ No. x.

^viii Gerald Walters, CMS Memorandum to All Regional Administrators, "Questions and Answers for Office D and Workers' Compensation Medicare Set-bated Arrangements," July 24, 2006, FAQ No. 13.

⁹ Gerald Walters, CMS Memorandum to All Regional Administrators, "Questions and Answers for Part D and Workers' Compensation Medicare Fix-bated Arrangements," July 24, 2006, FAQ No. 8.

^ten Patty Meifert, Mechanisms for Containing Medicare Part D Prescription Drug Costs in MSA Allocations, p. ane-2, NuQuest/Bridge Pointe "Settlement News," June, 2007.

^xi For an splendid overview of the Part D formula approach, including an actual example of how costs were significantly reduced past utilizing this formula, see pages two and 3 of author Meifert's commodity. Again, for the reasons outlined in Function II use of the Function D formula, as well as other "discounting methods" would at present appear to exist prohibited under CMS' new policies.

¹² Gerald Walters, CMS Memorandum to Consortium for Financial Management and Fee for Service Operations, Medicare Secondary Payer-Workers' Bounty – INFORMATION, April 3, 2009, p. i.

¹³ Gerald Walters, CMS Memorandum to Consortium for Fiscal Direction and Fee for Service Operations, Medicare Secondary Payer-Workers' Compensation – INFORMATION, Apr three, 2009, p. 1.

Average Wholesale Cost (AWP) is a calculation method intended to represent the average price at which wholesalers sell drugs to physicians, pharmacies, and other customers "based on data obtained from manufacturers, distributors, and other suppliers." See, Patty Meifert, Mechanisms for Containing Medicare Part D Prescription Drug Costs in MSA Allocations, Settlement News (June, 2007), at p. 1, citing Medical Economics Staff, 2002 as referenced in Ruby-red Book. [Page 14]

¹⁴ Gerald Walters, CMS Memorandum to Consortium for Fiscal Management and Fee for Service Operations, Medicare Secondary Payer-Workers' Compensation – Information, April three, 2009, at p. 2.

^xv Gerald Walters, CMS Memorandum to Consortium for Fiscal Management and Fee for Service Operations, Medicare Secondary Payer-Workers' Bounty – INFORMATION, Apr three, 2009, at p. two.

^xvi CMS Prescription Drug Fix-Bated Guidance for Submitters Effective: June ane, 2009, at p.1.

¹⁷ CMS Prescription Drug Set-Aside Guidance for Submitters Effective: June ane, 2009, at p.three.

¹⁸ CMS Prescription Drug Set-Aside Guidance for Submitters Effective: June ane, 2009, at p.iii.

^nineteen CMS Prescription Drug Prepare-Aside Guidance for Submitters Effective: June one, 2009, at p.3.

© Copyright 2009 byNuQuest/Bridge Pointe . All rights reserved. Reprinted with permission.

macleodlaboyes.blogspot.com

Source: https://www.lexisnexis.com/legalnewsroom/workers-compensation/b/workers-compensation-law-blog/posts/prescription-drugs-_2600_-the-medicare-set-aside_3a00_-understanding-cms_1920_-new-prescription-drug-policies

Share :