PACE & Medicare Part D www.npaonline.org Shawn Bloom National PACE Association Shawnb@npaonline.org (703) 535-1518
PACE & Part D Session Objectives PACE Medication Regulations What Does Part D Cover What Part D Does Not Cover Managing Part D Medications Part D Payment Average Part D Costs in PACE Part D Payment Reconciliation Who is Paying (Examples) Websites for Part B Coverage Information Questions Additional Part D Resources
PACE Medication Regulations Before Part D Under Sections 1894(a) and 1934(a) of the Act, PACE participants must receive Medicare and Medicaid benefits solely through the PACE organization. PACE organizations are required to provide enrollees with all medically necessary services, including drugs, without any limitation or condition as to the amount, duration, or scope. The PACE benefit includes all outpatient prescription drugs, as well as over-the-counter medications indicated by the participant s care plan. PACE programs cannot charge deductibles, copayments, coinsurance or other cost-sharing for medications.
PACE Medication Regulations Before Part D Most drug payment came from the Medicaid Capitation Payment. Some drug payment could be attributed to Medicare Part A or B There was no accounting or reconciliation between actual drug spending and Medicaid capitation or Medicare Part B amounts.
PACE Medication Regulations Under Part D All PACE participants must receive Part D coverage from their PACE organization; all PACE enrollees must enroll in Part D If PACE participants enroll in a PDP or MA- PD, they will automatically disenroll from their PACE organization New PACE enrollees will be disenrolled from a PDP or MA-PD upon enrollment in PACE; this can happen throughout the year
What Does Part D Cover? A drug that may be dispensed only upon a prescription; A drug that is being used for a medically-accepted indication; and Is one of the following: A drug described in 1927(k)(2)(A)(i) through (iii) of the Social Security Act A biological product described in 1927(k)(2)(B)(i) through (iii) of the SSA Insulin Medical supplies associated with delivery of insulin A vaccine licensed under 351 of the Public Health Service Act and its administration (does not include all vaccines)
What Part D Does Not Cover Drugs covered under Medicare Parts A or B Over the counter medications Agents used for anorexia, weight loss, or weight gain Agents used for cosmetic purposes Agents used for symptomatic relief of cough and colds Most prescription vitamins and mineral products Agents used for treatment of sexual dysfunction Drugs excluded by Part D may still be reimbursed by Medicaid
Managing Part D Medications Formularies Not used by most PACE organizations Requires a comprehensive formulary to be developed and submitted Requires the use of a Pharmacy and Therapeutics (P&T) Committee Preferred drug lists or other means of directing prescribers is not allowed without a formulary. Plan can provide education on drug efficacy.
Part D Bid Part D Payment Actuarially determined average cost of caring for an average Medicare beneficiary in your plan. Includes Administrative costs Profit margin Risk Adjustment Bid Amount Multiplied times Part D risk score Determined through RxHCC model Reconciliation Reconciliation with submitted Prescription Drug Event (PDE) data in the summer of the following year.
Part D Payments to PACE Organizations From CMS Bid Amount (Direct Subsidy) Reinsurance payments Low income subsidies Additional capitated amounts to cover Medicaid eligibles premium and co-pay amounts Risk corridor payments Designed to limit Part D sponsors exposure to drug costs in the catastrophic benefit phase Beneficiary Premiums (from Medicare-only PACE participants only, not dual eligibles)
Part D Payment Examples of non drug-related costs Bid Worksheet Examples of non drug-related administrative costs Admitting and Intake Finance and Accounting Medical Records Human Resources Information Systems Marketing Purchasing Planning and Development Operations Support Site Administration
Part D Bid Amounts in PACE (2014) Estimates from Milliman Est. Monthly Bid Amt for Dual Eligibles Est. Reinsurance Subsidy for Dual Eligibles Est. Low-income Subsidy for Dual Eligilbes Est. Add l Capitated Payment for Dual Eligibles Estimated Total Dual Eligible Revenue PMPM Est. Monthly Bid Amt for Medicare-only Enrollees Est. Medicare-only Enrollee Premium Est. Part D Drug Costs (Before rebates) Mean PMPM Amounts 348.73 186.84 571.09 $240.32 146.04 $84.13 3.19 426.94 $211.94 249.43 $6.96 56.36 396.89 $543.35 $557.30 Low High 7.96 2.41 11.60 752.16 $442.14 248.81 1,344.57 771.78 257.52 1375.86 622.34 163.00 1188.30 583.80 124.56 1,089.76 Est. Non Benefit Expenses 164.66 66.15 285.20 Projected Rebates 10.28 0.00 35.18
Part D Reconciliation The Reconciliation Process involves three steps: Calculation of the final risk score for the previous year. Verification that Reinsurance Subsidies that were paid were appropriate. Based the amount of drug spend by each enrollee Risk Corridor Reconciliation. Comparison of the Direct Subsidy amount received with Drug Costs reported on the PDE. Although this reconciliation process has remained since the beginning of the Part D program, it was initially only intended to exist as the program began.
Risk Corridor Reconciliation Compares the amount paid to plans based on their bid with the amount of drug spending reported on the PDE. Adjusted Allowable Risk Corridor Costs (AARCC) is the Direct Subsidy amount and premiums minus a percentage attributed to administrative costs. Total Drug Spending is the total drug cost reported on the PDEs minus any direct and indirect remuneration (DIR) received by the plan. AARCC (revenue) Total Drug Spending (expense) = Risk Corridor Reconciliation Payment Amount (Can be positive or negative)
Risk Corridor Reconciliation Risk Corridor PACE Share CMS Share >10.0% 20% of Loss 80% of Loss 5.0% - 10.0% 50% of Loss 50% of Loss 0% - 5.0% 100% of Loss 0% of Loss -5.0% - 0% 100% of Gain 0% of Gain -10.0% - -5.0% 50% of Gain 50% of Gain -10.0% 20% of Gain 80% of Gain * Risk Corridor Reconciliation / AARCC = Risk Corridor percetnage
Risk Corridor Reconciliation
Risk Corridor Example PACE ABC AARCC -- $1,000,000 for year (Plan received $980,000 because of sequester) PACE ABC Total Drug Spending $1,200,000 Risk Corridor Reconciliation $1,000,000 - $1,200,000= -$200,000 Risk corridors for this plan 5% loss - $50,000 All ABC PACE 5-10% loss $50,000 ($25,000 ABC PACE) ($25,000 CMS) Over 10% - $100,000 ($20,000 ABC PACE) ($80,000 CMS) ABC Overspent its target by $200,000. Through risk sharing, CMS will pay an additional $105,000 to the plan.
Part D Who is Paying? (Examples) Most prescription drugs Part A Part A stays in a skilled nursing facility Part B Some physician administered drugs Some vaccinations Infusions Medicaid Other drugs not covered by Medicare
Websites for Part B Coverage Information From Chapter 6 of the Medicare Prescription Drug Manual Pub. 100-04, Medicare Claims Processing Manual http://www.cms.hhs.gov/manuals/iom/itemdetail.asp?filtertype=none&filterbydid=- 99&sortByDID=1&sortOrder=ascending&itemID=CMS018912&intNumPerPage=10 Pub. 100-02, Medicare Benefit Policy Manual http://www.cms.hhs.gov/manuals/iom/itemdetail.asp?filtertype=none&filterbydid= -99&sortByDID=1&sortOrder=ascending&itemID=CMS012673&intNumPerPage=10 Medicare Coverage Database http://www.cms.hhs.gov/mcd/search.asp AB MAC and DME MAC contact information http://www.cms.hhs.gov/apps/contacts/
PACE & Medicare Part D Questions???
Additional Part D Resources PACE Regulation http://www.npaonline.org/website/download.asp?id=2520&title=pace_regulations- Final_and_Interim_-_as_of_5/31/13 PACE Part D Application http://www.cms.gov/medicare/prescription-drug- Coverage/PrescriptionDrugCovContra/RxContracting_ApplicationGuidance.h tml Medicare Prescription Benefit Drug Manual http://www.cms.gov/medicare/prescription-drug- Coverage/PrescriptionDrugCovContra/PartDManuals.html Robert Greenwood, NPA Staff (703) 535-1522 Robertg@npaonline.org