Part D Performance Audits - Formulary Administration
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1 Part D Performance Audits - Formulary Administration February 13, 2012 Medicare Drug Benefit and C&D Data Group Centers for Medicare & Medicaid Services Judith Geisler, R.Ph., CHC Formulary Administration Audits Formulary administration. New enrollee transition. Continuing enrollee transition. P&T committee. 2 1
2 Formulary Administration Part D sponsor submits recent point-of-sale (POS) rejected claims. These rejected claims are compared to the CMSapproved formulary. A targeted sample of rejected claims is selected for review while onsite. Protected class (PC) and non-protected class (NPC) drugs are sampled. Each sample is passed or failed and overall scores are calculated to determine if the sponsor passes this portion of the audit. 3 Transition New Enrollees The sponsor submits a list of beneficiaries who were newly enrolled as of the start of the contract year. The sponsor also submits rejected POS claims from the beginning of the contract year. Rejections for PC and NPC drugs are identified and sampled. Sampled cases are reviewed onsite and a pass or fail is determined for each case. 4 2
3 Transition Current Enrollees The same rejected POS claims file that is submitted for new enrollee transition is utilized. The sponsor must also submit CY 2011 prescription drug events (PDEs) for beneficiaries who have rejected claims in this POS reject file. CMS identifies HPMS formulary changes between CY 2011 and CY 2012, and members affected by the change by using the PDE file. PC and NPC samples of rejects for affected beneficiaries will be selected, reviewed, and scored onsite. 5 Formulary Administration Findings 6 3
4 Failure to Utilize the Required Compendia Some Part D sponsors failed to utilize the compendia as defined by the Act. Failure to use Drugdex, AHFS. Inappropriate use of other sources. Failure to review the revised compendia. MIPPA revised the definition of medically accepted indication (MAI) for Part D drugs used in anti-cancer regimens, effective January 1, In addition to the existing Part D compendia, the update included the use of the NCCN Drugs and Biologics Compendium, Clinical Pharmacology, and peer-reviewed medical literature when evaluating off-label uses. HPMS memo issued on December 9, Formulary Coding Errors Failure to cover drugs on the CMS approved formulary. Failure to implement formulary changes at the beginning of the month. Failure to update adjudication files to include new NDCs for formulary drugs. Other formulary set-up errors. 8 4
5 Unapproved UM Edits During audits of Part D plan sponsors, CMS identified several instances of implementation of unapproved utilization management (UM) edits. The unapproved edits have included: Prior authorization (PA) and step therapy (ST) edits that were not part of the approved formulary. Unapproved gender and age edits. Dose optimization edits during transition. Transition Findings 10 5
6 New Enrollee Transition Failure to appropriately identify members who should receive the transition benefit: Members who had MA-only coverage during the previous contract year were not provided a transition. A sponsor failed to provide transition for members who had previously been enrolled in the plan but were not enrolled during the previous contract year. 11 Current Enrollee Transition The majority of transition issues involved current enrollees affected by formulary changes across contract years. Sponsor intended to prospectively transition all members who were subject to a formulary change prior to January 1 st. Improperly relied on Annual Notice of Change (ANOC) to effectuate transition process. Processed transition fills for only some drugs subject to a cross-contract year formulary change, or coding errors on processors part when implementing new formulary. 12 6
7 Transition Requirements A sponsor must provide for an appropriate transition process with respect to: The transition of new enrollees into prescription drug plans following the annual coordinated election period; The transition of newly eligible Medicare beneficiaries from other coverage; The transition of individuals who switch from one plan to another after the start of the contract year; Enrollees residing in LTC facilities; and, In some cases, current enrollees affected by formulary changes from one contract year to the next. 13 Oversight and Monitoring 14 7
8 Accuracy of Claims Processing CMS expects that Part D sponsors have quality checks in place to ensure that claims are adjudicating in accordance with the CMS approved formulary. Refer to 42 CFR Rejected Claims Monitoring Serves as a valuable monitoring tool that can result in early identification of formulary errors. Exercise should be performed on a regular basis. Request reports from your PBM. Positive feedback from previously audited plan sponsors. 16 8
9 Subcontractor-Oversight Monitoring Failure to perform proper oversight of a subcontractor (e.g. PBM). Pursuant to 42 CFR , ultimately it is the responsibility of the contracting organization to ensure compliance with Part D requirements. Therefore, CMS expects the contracting organizations to maintain appropriate oversight over subcontractors performing claims processing duties. Refer to 42 CFR Avoiding Beneficiary Access Issues Review guidance and contact CMS with questions. Chapter 6 of the Medicare Prescription Drug Benefit Manual. HPMS Part D Transition Policy Reminder Memo August 27, Perform close oversight of PBM and other entities. Provide for ample testing in advance of January 1: Formulary changes across the contract year; Drugs within the classes of clinical concern; Proper coverage of other drugs. Monitor CTM. 18 9
10 Transition Monitoring Program Enhanced transition monitoring program for CY Ensures Part D sponsors are adequately administering Medicare Part D formulary transition policies consistent with Part D regulations and requirements. Contract Year 2012 Part D Transition Monitoring Program Analysis HPMS 12/30/ Transition Monitoring Data Request All sponsors should have the ability to provide the following information to CMS within 48 hours of request at anytime during the plan year. All point-of sale (POS) claims rejected for the following 3 categories: Non-formulary status Prior authorization (PA) Step therapy (ST) List of new enrollees with their effective date. Contract Year 2012 Part D Transition Monitoring Program Analysis HPMS 12/30/
11 Transition Monitoring Methodology HPMS formulary file extracts will be used to identify drugs that were deleted from the formulary or had an addition of PA or ST. A list of drugs that were subject to a formulary change will be selected. Once this list is identified, Prescription Drug Event (PDE) data will be used to identify beneficiaries taking these drugs. Contract Year 2012 Part D Transition Monitoring Program Analysis HPMS 12/30/ Transition Monitoring Methodology CMS will then conduct analyses to identify: 1) Continuing plan enrollees who had a rejected POS claim for a Part D drug that qualified for a transition fill. 2) Rejected POS claims for Part D drugs for new enrollees. Contract Year 2012 Part D Transition Monitoring Program Analysis HPMS 12/30/
12 Transition Monitoring Initial Contract Selection Failed transition during a program audit or audit validation. High number of formulary changes between CY 2011 and CY Poor Part D performance and/or large number of formulary compliance issues. Large enrollment increases between contract years. New parent organizations for CY Contract Year 2012 Part D Transition Monitoring Program Analysis HPMS 12/30/ Important Dates for CY 2013 Mid-March April 4 April 16 April 18 June 4 June 8 October 1 Formulary submission webinar released. Part C and D user call formulary submission. Formulary submission /Transition attestations and policy submission deadline (11:59 p.m. EDT). Part C and D user call formulary and benefits submission and review for compliance officers. Bid submission and Formulary-to-Plan crosswalk deadlines (11:59 p.m. PDT). Supplemental file submission deadline. Deadline for plan correction requests
13 Resources Part D Transition Policy Reminder - HPMS 8/27/2010. CMS Part D Utilization Management Policies and Requirements 10/22/2010. CY 2012 Formulary Updates Memo- HPMS 1/17/2012. Part D Prescription Drug Benefit Manual. Chapter 3 (Medicare Marketing Guidelines). Chapter 5 (Benefits and Beneficiary Protections). Chapter 6 (Part D Drugs and Formulary Requirements). Chapter 7 (Medication Therapy Management and Quality Improvement Program). p#topofpage 25 Resource Mailboxes Part D Formulary Questions partdformularies@cms.hhs.gov Part D Benefit Questions partdbenefits@cms.hhs.gov Part D Transition Questions partdtransition@cms.hhs.gov Part D Questions Part D Account Managers 26 13
14 Questions Contact information (410)
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