2018 Part D Tiering Exception Rule Changes

Among multiple policy changes to the 2018 Prescription Drug Benefit Program proposed, the Centers for Medicare & Medicaid Services (CMS) would revise existing policy related to tiering exceptions, including the permissible limitations Part D plan sponsors may apply to tiering exception requests. CMS is proposing to eliminate the provision allowing plans to exclude a dedicated generic tier from the tiering exceptions process and establish a framework based on the type of drug (brand, generic, biological product) requested and the cost-sharing of applicable alternative drugs. CMS is also proposing to clarify appropriate cost-sharing for approved requests when alternatives are on multiple lower tiers and to codify that authorized generic drugs should be treated as generics for purposes of tiering exceptions.

Many plan sponsors have begun offering multiple generic cost-sharing tiers and mixed brand-generic tiers on their Part D formularies. In addition, confusion of brand versus generic designation has been ambiguous with respect to tier placement. A tiering exception request is complicated by the existing rules that allow a plan to exclude designated generic tiers. Clarification of brand versus generic labeled tiers definitions and defining brand versus generic drugs will simplify the tiering exception process. Generic drugs would include Abbreviated New Drug Application (ANDA) generics, branded generics, and approved biosimilars.

Chapter 18, §30.2.1.4, states, “When a tiering exception is approved, the plan sponsor must provide coverage for the drug in the higher cost-sharing tier at the cost-sharing level that applies to the drug in the applicable lower cost-sharing tier.” In the draft 2018 Call Letter, CMS proposed to clarify, in situations where the requested drug has alternatives in multiple lower tiers and the plan sponsor has approved the request for a tiering exception, the plan must apply the cost-sharing for the lowest applicable cost-sharing tier that contains alternatives for the requested drug. Consistent with the manual provision, the lowest cost-sharing tier is the “applicable lower cost-sharing tier.” Under the proposed rule, a drug on a non-preferred tier (except the specialty tier) is eligible for a tiering exception to the lowest applicable tier provided there is a formulary alternative placed on that tier.

Gorman Health Group provides Part D sponsors with claims monitoring to begin the new benefit year to ensure compliance with CMS guidance for claims processing such as transition, quantity limits, and tiering placement as well as a review of coverage determination exception processes for the application of utilization management controls.

 

 

 

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