PharMerica

What is the new Medicare Drug Benefit or Part D?
The new Medicare Drug Benefit, known as Medicare Part D, is prescription drug coverage for all Medicare eligible persons. This benefit is for seniors over 65 years old, whether community based or institutionalized, and includes individuals younger than 65 if they are Medicare eligible due to a disability.

Medicare Part D is mandated for individuals who fall into the category of “Full Benefit Dual Eligible”, defined as people who qualify to receive benefits under both Medicare and Medicaid. The plan is optional for non-dual eligibles. Medicare Part D begins January 1, 2006.

The purpose of this benefit is twofold: to provide a prescription drug coverage program for all Medicare Beneficiaries and to shift the cost responsibility from states to a federal program which will operate through privatized Prescription Drug Plans (PDPs) authorized by CMS to administer the benefit.

What elements of the legislation directly impact long-term care facilities?

• Benefits will be provided through two different types of plans: a Prescription Drug Plan (PDP), which is a stand-alone drug benefit, or through a Medicare Advantage Prescription Drug plan (MA-PD), which incorporates both a health care and drug benefit.
• Eligible beneficiaries will receive prescription drug coverage through Medicare Part D privatized Prescription Drug Plans (PDPs) authorized by CMS.
• Enrollment into Medicare Part D will be MANDATORY for dual-eligible residents (Medicare AND Medicaid beneficiaries). CMS will auto-enroll dual eligibles into PDPs by January 1, 2006, if these beneficiaries do not choose to enroll in a plan during the open enrollment period between November 15 and December 31, 2005.
• Medicare Part D participation is VOLUNTARY for Private Pay residents who are Medicare eligible (Part A and/or Part B) but NOT eligible for Medicaid. Voluntary enrollment for these non-dual beneficiaries runs from November 15, 2005 to May 15, 2006. If they do not enroll during this period, effective June 2006, a 1% monthly penalty will be added to their monthly premium, once they enroll in a PDP. Non-duals in long-term care facilities qualify for the Special Enrollment Period, which allows them an opportunity to enroll into a PDP/change PDPs once per month beyond the open enrollment period.
• If a community-based non-dual does NOT enroll by May 15, 2006, they will not be allowed to enroll into Medicare Part D until November 15, 2006-December 31, 2006, during the Annual Enrollment Period (AEP).
• Low-income beneficiaries will receive government assistance in paying for their drugs, premiums and cost sharing. This assistance will apply, in varying degrees, to residents with income under 150 percent of the federal poverty level.
• Private Pay residents who are NOT Medicare or Medicaid eligible, or are eligible but not signed up, maintain responsibility for prescription drug coverage through self-payment or utilization of private insurance plans.
• Residents who are NOT Medicare eligible, but are Medicaid eligible may have prescription drug coverage through the state Medicaid program.
• Residents in Medicare A stays will have no changes in prescription drug coverage. The facility will still be responsible for payment of their prescription drugs under Medicare Part A PPS.
• Each PDP will have its own formulary, which is a preferred drug list covered by a particular health plan, meaning the potential exists for multiple formularies and procedures within the facility.
• Residents may need to transition from current medications to medications covered by the new PDP formularies.
• According to the legislation, Insulin, Insulin syringes, gauze, alcohol pads will be covered. All other injectables including infusion therapy may require prior authorization or formulary appeal. Devices for medication administration are not covered e.g. spacers for inhalation products, flushing supplies (heparin, saline).
• The legislation contains language specific to formulary exclusions (non-covered items), which will be an issue for beneficiaries who need coverage on items such as*:
  • Benzodiazepines
  • Over-the-counter medications
  • Drugs to cause or treat weight loss
  • Barbiturates
  • Cough & cold products
  • Prescription vitamins
  * To date, the majority of states have tentatively agreed to provide coverage for some or all of the excluded classes of drugs. Coverage will vary from state to state.

Does PharMerica meet pharmacy standards required by CMS to operate with PDPs in the Medicare Part D environment?
PharMerica is uniquely positioned to assist PDPs by exceeding the minimum standards for network long-term care pharmacies set by CMS, due to our extensive clinical and operational expertise.

Will long-term care facilities contract with PDPs?
No. Only eligible long-term care pharmacy providers like PharMerica will directly contract with PDPs. Facilities should have no contractual relationship with PDPs. If you receive any documents from PDPs requesting action on your part, including signatures, please let us know as we will work with you ensure these requests are reviewed and processed appropriately. Facilities may, however, contract with MA-PDs, which is similar to contracting with managed care organizations, as you have done in the past.

How will PharMerica assist facilities in working with PDPs?
PharMerica is partnering with our customers to evaluate PDPs to help facilities operationalize Medicare Part D with the least amount of confusion. We are educating customer facilities on PDPs and their effect on facilities, and providing resources for residents, families and responsible parties. Additionally, we will provide physicians with assistance in the non-covered drug appeals process and will work with PDPs and facilities to establish an effective transition process for MMA-excluded and non-formulary drugs.

What will CMS do next to communicate with dual eligible beneficiaries about eligibility and PDPs?
CMS is in the midst of sending notices to dual-eligibles, reminding them of their status and notifying of their randomly assigned, CMS-designated PDP. Duals are also being informed of the open enrollment period, which occurs between November 15 and December 31, 2005. Because their monthly premiums are subsidized by the government, dual-eligibles are being pre-assigned into plans that have the lowest monthly premium costs. If dual-eligibles decide to change to a plan that may be more appropriate to meet their health needs, these beneficiaries should seek to enroll in a PDP that maintains the lowest monthly premium cost in order to ensure their prescription costs are appropriately covered by the government. If they do not enroll into a different PDP during open enrollment, they will be auto-enrolled into the randomly assigned PDP. However, dual-eligibles have the right to change PDPs at any time during the enrollment period, and once per month beyond the enrollment period.

Do dual-eligible beneficiaries in long-term care facilities have to pay anything for prescription medications under Medicare Part D?
Generally, no. Dual-eligible residents of long-term care facilities will not have to pay for prescription medications under Medicare Part D in most cases. These beneficiaries will not have to pay monthly premiums, as long as they enroll into plans at the CMS-designated baseline regional premium amount. This is an amount set by CMS in each PDP region which indicates what price the government will pay for premiums (through subsidies). Dual-eligibles who choose a PDP with a premium that exceeds this baseline amount for the local region may experience variance billing, which results in a monthly fee charged to the resident that the government does not cover.

How is PharMerica educating customers about the new legislation?
We are educating our customers on the latest developments through a variety of formats, including teleconferences, webcasts, reading material and speaker programs. Look for additional materials to be developed on a continuing basis, including educational materials for families, residents and physicians.

Is Medicare Part D information currently available for residents and responsible parties?
Yes. If you would like to convey information to residents and responsible parties about the new prescription drug benefit, feel free to visit the following websites often to receive the latest information:

PharMerica
http://www.pharmerica.com
Offers a variety of resources including frequently asked questions, information about the final regulations, webcast access, links to other sites and the ability to request a complimentary Medicare Part D consultation.

The Centers for Medicare and Medicaid Services (CMS)
http://www.medicare.gov/medicarereform, http://www.medicare.gov/MPCO/Home.asp and http://www.cms.hhs.gov/partnerships
Provides access to the most current information regarding the Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA) to help beneficiaries make the best decisions regarding Medicare coverage. Their site also includes resources in non-English languages, allows visitors to download or order the Medicare Outreach Toolkit about the drug benefit, hosts interactive training modules through the national Medicare & You training program and provides a useful tool for those interested in selecting a Medicare Advantage Plan.

Social Security Administration
http://www.socialsecurity.gov and http://www.socialsecurity.gov/organizations/medicareoutreach2/
Provides information about the prescription drug benefit and how to apply for the limited income subsidy.

The Lewin Group’s Savings Calculator
http://webstudies.lewin.com/pdb/medicare2.htm
Allows Medicare beneficiaries to estimate their out of pocket spending under the new drug benefit.

The U.S. Administration on Aging
http://www.benefitscheckup.org/rx
Helps people learn about and enroll in government benefits, including the new prescription drug benefit and other valuable federal, state and private programs that can save money on health care.

Medicare Today
http://www.medicaretoday.org
Educates and informs Medicare beneficiaries, the media, and the public at large on the new benefits provided through The MMA.

The American Association of Retired Persons (AARP) Bulletin Online
http://www.aarp.org/bulletin
Newsletter that includes information relevant to AARP members, including Medicare prescription drug coverage facts and important dates.