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Topic: Part D
Perhaps a Visit to the Physical Therapist Is in Order – Make Sure Your CDAG Process Is Not a Weak Spot
Coverage Determinations, Appeals, and Grievances (CDAG) remain a compliance Achilles heel for many Part D sponsors. The Centers for Medicare & Medicaid Services (CMS) has noticed! Challenges with interpreting CMS regulations and guidance and operational restrictions have the potential to create a very costly gap. CMS is increasing scrutiny of this area in 2017.
Top of mind when we are talking about Medicare compliance should be that the ultimate customer is the taxpayer who funds this program. That’s why the Centers for Medicare & Medicaid Services (CMS) has to attempt to account for every nickel that comes into or goes out of the programs. One of the murkiest finance areas is in Medicare Part D – that is Direct and Indirect Remuneration (DIR). CMS published a memo on January 19, 2017, with this very title.¹ DIR is the additional compensation – besides a partially capitated payment from CMS – received by a plan sponsor or Pharmacy Benefit Manager (PBM) after the pharmacy point of sale (POS) transaction. This changes the final cost of the drug for the plan sponsor or the price of the drug paid to the pharmacy. DIR has grown significantly in the past few years in large part because of the growth of preferred network pharmacies. CMS states they have observed “a growing disparity between gross Part D drug costs, calculated based on costs of drugs at the POS, and net Part D drug costs, which account for all DIR.”
Whether you are just updating your current product benefits, are offering a new plan benefit package (PBP), new product, or service area, or are new to Medicare Advantage altogether, now is the time to start planning for the 2018 bid submission.
Narrow Networks 2017: Will Narrow Pharmacy Networks Evolve from Reduce-Reimbursement to Performance Networks?
Part D Sponsors to the Medicare Part D program must ensure that their retail pharmacy networks meet the convenient access criteria established under 42 CFR §423.120. These metrics stem directly from the statutory requirement that Medicare Part D sponsors’ entire retail pharmacy networks meet the TRICARE standard for convenient access: Sponsors and applicants must ensure that their networks have a sufficient number of pharmacies able to dispense drugs directly to patients (other than by mail order) to ensure convenient access to Part D drugs. CMS rules require that sponsors establish retail pharmacy networks in which: Read more
Most of the attention on drug pricing quickly fizzled when President-Elect Donald Trump partnered with Speaker Paul Ryan and set an ambitious healthcare agenda for the new administration. The pharma industry let out a sigh of relief when Republicans swept the House and Senate. Because Trump’s transition site made no mention of the pharmaceutical industry, it was assumed drug pricing would be left off the agenda with the Affordable Care Act (ACA), Medicare, and Medicaid facing the spotlight this term.
Hmm, you’re asking what will the Trump de-regulators do to Medicare Advantage? Given the confusion about ObamaCare non-replacement for three years and the selection of a Medicaid maven for Administrator, we haven’t heard much about Medicare Advantage and Part D. However, Trump said he wants a list of wasteful and unnecessary regulation. Even with that, we may not see a lot of actual regulatory change during 2017 in either of these programs. Changing regulations in a major way takes too much time to propose, review, and finalize anything of substance in a short period. However, there are other actions the new Administrator can take. First and foremost, de-regulators are interested in slowing the process or moderating its effects, so here are some potential actions.