Pharmacists prepare for 2007 plan shifts

December 11, 2006

Previous columns examined the Medicare decisions that plans faced for 2007 and the choices available to enrollees. Pharmacists, too, will be facing some plan adjustments as the new year begins. In some cases pharmacy providers must sign and return a contract to continue their participation in pharmacy networks associated with the plans. Many pharmacies work with a third-party contracting organization that will sign the agreement on their behalf. Although many existing contracts expire on Dec. 31, 2006, CMS is encouraging plans to adopt automatic renewals, or evergreen contracts, for subsequent years.

Satisfied beneficiaries are well advised to verify that the premium, benefit scheme, and drug coverage provisions remain unchanged in their existing plan. Pharmacists likewise are advised to verify the terms of their contracts. Changes to evergreen contracts often are in the form of an addendum that clearly describes new terms whereas recontracting requires a reading and comparison of the complete contract document.

Marketing guidelines for the open-enrollment period remain virtually unchanged from 2006. That is, promotional activities must be in compliance with federal and state laws, including prohibitions against inducements to beneficiaries in violation of antikickback statutes. The marketing guidelines are of particular concern to providers working with residents of nursing and assisted-living facilities. Pharmacist consultants argue that they, long-term care staff, and personal physicians are often called upon to help residents with physical and cognitive impairments choose a plan that best meets their needs.

Timeliness of reimbursement was among the chief complaints of R.Ph.s, along with related issues such as receiving checks dated weeks before postmark, checks intended for other pharmacies, and multiple reimbursement checks in a single envelope. In rebuttal, the plans argue that payment of clean claims in 30 days is the industry standard for providers, including hospitals and physicians. Pharmacists have argued that their suppliers routinely use 15-day payment schedules. CMS pledged to consider plan performance in selecting which plans would be allowed to remain in the program.

In addition CMS streamlined the exceptions and appeals process by adding requirements for timely processing and tracking performance failures. It also implemented strict requirements for processing of enrollment and co-pay requirements for beneficiaries who are eligible for a low-income subsidy. Plans must provide pharmacists with information necessary for billing the beneficiary's plan even if the beneficiary does not have a plan benefit card. CMS is also urging persons with Medicare to make their plan choices or changes well before the Dec. 31 deadline to ensure that their benefit is in place on Jan. 1.

Formulary specifications from CMS for 2006 required plans to cover a minimum of 336 products. CMS updated the formulary requirements for Part D coverage in 2007, adding 23 therapeutic classes and unique therapeutic agents primarily for oncology and biotechnology products. The average plan formulary covered about 1,400 drugs, well beyond the minimum.