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Medicare Part D: Time to celebrate progress?

May 1, 2008
by Richard L. Peck, Editor-in-Chief
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Interview with Claudia Schlosberg, JD, Director of Policy and Advocacy, American Society of Consultant Pharmacists

It's been a little over two years since the groundbreaking program called Medicare Part D—prescription drug coverage for the Medicare-eligible—went into effect. The sheer size, scope and complexity of the program were daunting—even more so for long-term care providers because the program had not been designed for their field, facility-based residential care of the chronically ill and disabled. Even so, there is always a learning curve, so it would seem reasonable to anticipate that Medicare Part D had ironed out some kinks and is serving even long-term care residents with some degree of accuracy and efficiency. But is it? Recently Long-Term Living Editor-in-Chief Richard L. Peck asked Claudia Schlosberg, JD, policy director for the professional organization most directly involved in implementing Part D for long-term care—the American Society of Consultant Pharmacists (ASCP)—to provide a “progress report.” And Schlosberg is well-qualified to do so, having come to ASCP this February after two decades of legal and policy work on both institutional and community-based care for the elderly and people with disabilities, including over three years with the U.S. Department of Health and Human Services.

Peck: The administrative challenges of Medicare Part D to long-term care providers seemed daunting from the start. Has there been any improvement in this situation?

Claudia Schlosberg, JD

Claudia Schlosberg, JD

Schlosberg: Not only do the issues remain challenging, but in certain areas, they may well be increasing. In preparing for this interview I did an informal poll of our membership. What I got back is by no means a scientific survey, but I received several telling responses. One pharmacist, for example, described Part D as the most labor-intensive process for long-term care pharmacies. The administrative burdens do not just involve identifying and dispensing appropriate covered medications and dealing with prior authorizations, but in dealing with beneficiary eligibility for cost-sharing subsidies. The copayment issue is huge. Most long-term care pharmacies have had to increase staffing to deal with the added administrative burdens of Part D.

Peck: What are the factors behind the copayment problem?

Schlosberg: Well, nursing facilities know the dual-eligible resident's payment status, and long-term care pharmacies serving those residents know it, but state Medicaid agencies are communicating with the Centers for Medicare & Medicaid Services [CMS] about eligibility issues on different timetables, so the prescription drug plans [PDPs] have been charging copays to residents who by law are entitled to full subsidy status—in other words, they have zero copay obligations. CMS has tried to remedy the problem with their database by requiring plans to collect paper documents from beneficiaries that prove they are entitled to the subsidy payments. This policy is called “best available evidence,” or BAE. If a PDP obtains BAE, then they must amend the resident's copay eligibility status based on those paper records. As you know, pharmacy claims are processed electronically, so the notion that PDPs must now collect paper to document a beneficiary's copay status to satisfy CMS payment and audit requirements is a tremendous administrative burden for PDPs. Not only must PDPs collect BAE, but once they receive it they must go back and refile prescription drug event files with CMS to correct CMS's payment records. Many PDPs have resisted this policy and since long-term care pharmacies are prohibited from collecting copayments from residents they know to be subsidy-eligible, long-term care pharmacies are carrying millions of dollars in receivables for unpaid copayments owed by PDPs.

Peck: How are facilities faring in terms of getting the appropriate medications to the residents?

Schlosberg: Again, my informal survey—as well as a formal study published recently in the journal Health Affairs—indicate that performance in this area is highly variable. Claims rejection rates vary widely from plan to plan. And pharmacists are saying they're having difficulty determining why rejections occur. Pharmacists also note that while plans are covering more drugs, there are more prior authorizations (PAs) and formulary edits, so formularies in 2008 are more restrictive than formularies in prior plan years.

There is a tremendous amount of inconsistency, as well, in compliance with CMS regulations, particularly with respect to transition policies. Some pharmacists say they're spending too much time on the phone educating PDP supervisors and staff on CMS policies. Pharmacists are working extremely hard to ensure that appropriate medications get dispensed without delay.

Peck: Would you expand a bit on that regulatory inconsistency?

Schlosberg: For example, when a resident is transitioning from one level of care to another—hospital to nursing home, say—or is having a drug or dosage changed, CMS requires medications to be provided and covered during that period even if they're uncovered by a plan's formulary. CMS recognizes that under the federal regulations governing nursing facilities, residents in long-term care facilities must be able to obtain their medications, as ordered, without delay. Sometimes plans approve these transition fills, sometimes not. Many pharmacists complain that plans do not provide accurate formulary information so, if a claim is rejected because the prescribed drug is not covered by that plan's formulary, it is difficult and time-consuming for the pharmacist to identify a therapeutic alternative that will be covered.