POLICY &PROCEDURE PHARMACY

~~~'~~~ POLICY &PROCEDURE PHARMACY H ~ A L "9 7i ~ i i Policy Title: Part D Transition and Temporary Supply of Medication Policy No: 50.11.4 Original Date: 04/2010 Effective Date: 7/16 Revision Date: 02111, 04/12, 10/13, 5114, 7/14, 8/14, 5/16, 7/16 Revision No: 8 De ent Head: Date: Me i I ervices/p&t Committee: Date: ~ ~~ P&P C mittee: Date: Scope of verage: ~_ c harmacy Department PURPOSE: To establish procedures for providing a temporary supply of Part D medications to members requiring a transition period, transition processes will be administered in a manner that is timely, accurate and compliant with all relevant CMS guidance and requirements per 42 CFR 423.120(b)(3), Chapter 6, Section 30.4.1 of the CMS Medicare Prescription Drug Benefit Manual and Chapter 2 Medicare Marketing Guidelines. POLICY: Carelst Health Plan will provide its members a temporary supply of Part D medications at the point of sale for all planned transitions per the requirements as set by CMS. This policy is applicable to: (1) new enrollees into prescription drug plans at the start of a contract year; (2) newly eligible Medicare beneficiaries from other coverage; (3) enrollees who switch from one plan to another after the start of a contract year; (4) current enrollees affected by negative formulary changes across contract years; (5) enrollees residing in long-term care (LTC) facilities. Carelst will work expeditiously with all parties involved to provide the medication in a timely manner. Members will be provided prompt transitional notice and information on the exception/prior authorization process. PROCEDURES: A. Members requiring Transition periods 1. Newly enrolled members: i. "Newly enrolled members" include but are not limited to: 1) new members at the beginning of the year; 2) members new to Medicare from other coverage; 3) members transitioning from another plan after the beginning of the contract year. ii. The first effective date with the plan of all newly enrolled members will be provided to the Pharmacy Benefits Manager (PBM) as part of the

Policy Number: 50.11.4 Original Date: 04/10 Page 2 of 9 eligibility file. This effective date will be the start date for the transition period, which will have a 90 day timeline. The end of the 90 day timeline may cross over contract years if the effective start date is after November 1 (i.e., the transition period will be extended across contract years should a beneficiary enroll with Care 1st with an effective enrollment date of either November 1 or December 1 and need access to a transition supply). a) During the member's transition period, all edits associated with non-formulary drugs, meaning (1) Part D drugs that are not on the Plan's formulary, (2) drugs previously approved for coverage under an exception once the exception expires, and (3) Part D drugs that are on the Plan's formulary but require prior authorization or step therapy, or that have an approved quantity limit lower than the beneficiary's current dose, under the Plan's utilization management rules, will automatically be overridden by the claims adjudication system at the point-of-sale. Carelst will ensure that its policy (P&P 50.11.3.2) addresses procedures for medical review of non-formulary drug requests, and when appropriate, a process for switching new Part D plan enrollees to therapeutically appropriate formulary alternatives failing an affirmative medical necessity determination. b) Non Part D drugs and Part D exclusions will continue to be rejected at the point-of-sale. c) Carelst will apply all transition processes to a brand new prescription for anon-formulary drug if it cannot make the distinction between abrand-new prescription for anon-formulary drug and an ongoing prescription for anon-formulary drug at the point-of-sale. d) The number of transition fills will be limited to the amount established by the member's benefit plan. In the retail setting, the transition policy provides for at least aone-time temporary 30-day fill (unless the enrollee presents with a prescription written for less than thirty (30) days in which case multiple fills will be allowed to provide up to a total of thirty (30) days of medication) anytime during the first 90 days of a beneficiary's enrollment in a plan, beginning on the enrollee's effective date of coverage. In the LTC setting multiple fills of 31 days up to a 93 day supply unless the prescription is written for less. e) This temporary supply of Non-formulary or Formulary Drugs that have utilization edits, will accommodate the immediate needs of an enrollee, as well as to allow the plan and/or the enrollee sufficient time to work with the prescriber to make an appropriate switch to a therapeutically equivalent medication or the completion of an

Policy Number: 50.11.4 Original Date: 04/10 Page 3 of 9 iii. exception request to maintain coverage of an existing drug based on medical necessity reasons. For any transition claims involving a safety issue (such as exceeding FDA maximum dosage, or inconsistent with product labeling), the system will reject the claim. a) The pharmacist will authorize the FDA-maximum dose and provide information about the exception process for additional dosage. As necessary, Carelst will provide refills for drugs in this category. 2. Current members affected by negative formulary changes from one contract year to the next. Negative formulary changes include drugs removed from the formulary or formulary drugs with new utilization edits (Prior Authorization and Step Therapy restrictions). i. For current enrollees whose drugs will be affected by negative formulary changes in the upcoming year, Care 1st will effectuate a meaningful transition by providing a transition process at the start of the new contract year. The PBM's claims adjudication system is able to accommodate this as follows: ii. a) At the beginning of the calendar year (January 1St), the claims adjudication system will look back 120 days reviewing approved claims history of the member for the same prescription product. Upon finding a match the system will automatically provide the transition supply at the point-of-sale (in retail setting for a minimum of a thirty (30) day supply, unless the enrollee presents with a prescription written for less than thirty (30) days in which case the Part D sponsor must allow multiple fills to provide up to a total of thirty (30) days of medication). The transition timeframe of ninety (90) days will apply and the number of transition fills will be limited to the amount established by the member's benefit plan. For any request involving a safety issue (such as exceeding FDA maximum dosage, or inconsistent with product labeling), the system will reject the claim. a) The pharmacist will authorize the FDA-maximum dose and provide information about the exception process for additional dosage. As necessary, Carelst will provide refills for drugs in this category. 3. Members experiencing unplanned transitions involving level of care changes, including but not limited to: patients discharged from the hospital to Long Term Care facility (LTC), LTC to home, discharged from hospital to home, end of LTC Part A stay. i. Upon notification of the change in level of care, either by the physician, pharmacy, discharge planner or member, the pharmacy technician will process this as a transition fill:

Policy Number: 50.11.4 Original Date: 04/10 Page 4 of 9 a) If the request is not a Part D exclusion or does not exceed the FDA safety maximum dose, a temporary transition supply (one-time thirty (30) day supply in the outpatient setting and multiple fills of up to a thirty one (31) day supply in the LTC setting unless the prescription is written for less) will be provided. 1) The technician will enter an override in the PBM's claims adjudication system, ensuring the member does not have a gap in coverage. An approval letter will be mailed to the member providing information about the exceptions process if continued use is required. 2) Additionally, upon receiving a D.0 LTC claim transaction where the pharmacy submitted a Submission Clarification Code (SCC) value of "18", which indicates that the claim transaction is for a new dispensing of medication due to the patient's admission or readmission into an LTC facility, the PBM's claims adjudication system will recognize the current member as being eligible to receive transition supplies and will only apply the point-of-sale edits described in Section G, c of this Policy. In this instance, the plan does not need to enter apoint-of-sale override. b) If the request is a Part D exclusion. 1) The technician will provide a verbal denial to the provider, and follow up with the Denial Notice of Action to both member and provider within one (1) business day. c) If the request involves a safety issue (such as exceeding FDA maximum dosage, or inconsistent with product labeling). 4. Members residing in LTCs. 1) The pharmacist will authorize the FDA-maximum dose and provide information about the exception process for additional dosage. As necessary, Carelst will provide refills for drugs in this category. i. Newly enrolled LTC members will have the same transition benefits as non-ltc members with a few exceptions. For members in the long-term care setting, the transition policy provides fora 91 to 98 day fill consistent with the applicable dispensing increment in the long-term care setting (unless the enrollee presents with a prescription for less), with refills provided if needed during the first 90 days of a beneficiary's enrollment in the plan, beginning on the enrollee's effective date of coverage. Brand drugs are only allowed to be filled in increments of up to 14 days. After the transition period has expired, the transition policy provides fora 31- day emergency supply of non-formulary Part D drugs (unless the enrollee

Policy Number: 50.11.4 Original Date: 04/10 Page 5 of 9 ii. presents with a prescription written for less than 31 days) while an exception or prior authorization is requested. For members being admitted to or discharged from a LTC facility, early refill (dispensed too soon) edits are not used to limit appropriate and necessary access to their Part D benefit, and such members are allowed to access a refill upon admission or discharge. For any request involving a safety issue (such as exceeding FDA maximum dosage, or inconsistent with product labeling), the system will reject the claim. a) The pharmacist will authorize the FDA-maximum dose and provide information about the exception process for additional dosage. As necessary, Care 1st will provide refills for drugs in this category. B. Transition Extensions Arrangements will be made to continue to provide necessary Part D drugs to enrollees via an extension of the transition period, on a case-by-case basis, to the extent that their exception request or appeal have not been processed by the end of the minimum transition period and until such time as a transition has been made (either through a switch to an appropriate formulary drug or a decision on an exception request). On a case-by-case basis (upon consultation with Medical Director), point-of-sale overrides can also be entered by the Plan in order to provide continued coverage of the transition drug(s). C. Cost Sharing Cost-sharing for a temporary supply of drugs provided under the transition process will never exceed the statutory maximum co-payment amounts for low-income subsidy (LIS) eligible enrollees. For non-lis enrollees, the same cost sharing for nonformulary Part D drugs provided during the transition that would apply for nonformulary drugs approved through a formulary exception in accordance with 423.578(b) and the same cost sharing for formulary drugs subject to utilization management edits provided during the transition that would apply once the utilization management criteria are met. D. Transition Notice On a daily basis, the PBM will provide the contracted mail vendor and Carelst the list of the transition claims via secure FTP site. The vendor will generate a CMS approved member transition letter and a physician transition notification. For the member transition letter, Carelst will use the CMS model Transition Notice via the file-and-use process or will submit anon-model Transition Notice to CMS for marketing review subject to a 45-day review.

Policy Number: 50.11.4 Original Date: 04/10 Page 6 of 9 The mail vendor will mail acms-approved beneficiary transition letter via US First Class mail within three (3) business days of adjudication of a temporary transition fill to each member involved. a) The notice will include: i. An explanation that the transition supply provided is temporary and may not be refilled unless a formulary exception is approved if the drug is anon-formulary drug; ii. That the enrollee should work with Care 1st as well as his or her health care provider to satisfy utilization management requirements or to identify appropriate therapeutic alternatives to the non-formulary drug that are on the Care 1st formulary and that will likely reduce his or her costs; iii. That the member has the right to request a formulary exception, the timeframes for processing the exception, and the member's right to request an appeal if the sponsor issues an unfavorable decision.; and iv. The Carelst procedures for requesting a formulary exception. The exception/prior Authorization forms are available via downloads from the Carelst website. Forms are also available upon member or physician request and may be provided via mail, fax, or email. b) For long-term care residents dispensed multiple supplies of a Part D drug in increments of 14-days-or-less, consistent with the requirements under 42CFR423.154(a)(1)(i), the written notice will be provided within 3 business days after adjudication of every temporary fill. 2. The prescriber will also receive a prescriber transition notice via US First Class mail within three (3) business days. The notice will include: a) The transition supply provided is temporary and may not be refilled unless a formulary exception is approved if the transition fill is anon-formulary drug; b) The beneficiary involved with the transition claim; c) The medication involved with the transition and the point of sale edit requiring the transition (i.e., Prior Authorization required, Non Formulary, Non safety quality limits...etc); d) Non Formulary alternatives will be provided, and e) The Care 1st procedures for requesting a formulary exception. The exception/prior Authorization forms are available via downloads from the Carelst website. Forms are also available upon member or physician request and may be provided via mail, fax, or email.

Policy Number: 50.11.4 Original Date: 04110 Page 7 of 9 E. Public Notification of Transition Process The transition policy will be available to enrollees via link from Medicare Prescription Drug Plan Finder to sponsor web site and included in pre-and postenrollment marketing materials as directed by CMS. F. Implementation Statement a) Claims Adjudication System: Contracted PBM will have systems capabilities that allow the PBM to provide a temporary supply of non-formulary Part D drugs in order to accommodate the immediate needs of an enrollee, as well as to allow the plan and/or the enrollee sufficient time to work with the prescriber to make an appropriate switch to a therapeutically equivalent medication or the completion of an exception request to maintain coverage of an existing drug based on medical necessity reasons. b) Pharmacy Notification at Point-Of-Sale: Until such time as alternative transactional coding is implemented in a new version of the HIPAA standard, the PBM will promptly implement either: (1) appropriate systems changes to achieve the goals of any additional new messaging approved by the industry through NCPDP to address clarifying information needed to adjudicate a Part D claim, or (2) alternative approaches that achieve the goals intended in the messaging guidance. c) Edits During Transition: The PBM will only apply the following utilization management edits during transition at point-of-sale: edits to determine Part A or B versus Part D coverage, edits to prevent coverage of non-part D drugs, and edits to promote safe utilization of a Part D drug. Step therapy and prior authorization edits do not apply at point-of-sale for enrollees eligible for transition fill. The PBM will ensure that the transition policy provides refills for transition prescriptions dispensed for less than the written amount due to quantity limit safety edits or drug utilization edits that are based on approved product labeling. d) Pharmacy Overrides at Point-Of-Sale: During the member's transition period, all edits (with the exception of those outlined in part c above) associated with nonformulary drugs are automatically overridden by the PBM's claims adjudication system at the point-of-sale. Pharmacies can also contact the PBM's Pharmacy Help Desk directly for immediate assistance with point-of-sale overrides. MONITORING: Within the first ninety (90) days of each contract year, claims will be audited for appropriate adjudication of above set guidelines. Results of the audit will be reported to the Care 1st Compliance Committee.

Policy Number: 50.11.4 Original Date: 04/10 Page 8 of 9 Any identified discrepancies will be corrected and evaluated for process improvement. Any members involved in the discrepancies who were not provided an appropriate transition claim, will be contacted and offered a transition claim. The mail vendor will make available mail logs and copies of transition notices mailed to all members. These materials will be audited with claims to determine accuracy. A twiceyearly audit will be conducted to ensure timely notice has been delivered. The results will be reported to the Carelst Compliance Committee. REFERENCES/AUTHORITIES: 42 CFR 423.120(b)(3), Chapter 6, Section 30.4.1 of the CMS Medicare Prescription Drug Benefit Manual and Chapter 2 Medicare Marketing Guidelines

Policy Number: 50.11.4 Original Date: 04/10 Page 9 of 9 Appendix B. POS Transition Flow Diagram Clelm ArfIvBS for PeA D Member who hes TRANSITION DAYS cerrierldener edft eneded Standard new member Transition via Type 24 load hom client Is the FRML variable e N? (The ENO ~S IIOI IDWtl.on tm b~mularv.i u Fui ow ewwm ~ ~ ^~ ^ ~ ~ AWnEr PM08h~q Selevenebb that FILLS or DSLIMIT Aro any Trensilbn Np Sthe me MwibwMo YBS the member is within Slarl end overritleadk FRM_DENY Edit ~d~t~~ elgible /or transition. Start pte ~Trem. ragrictioris adive7 B~ebIBd7 f~s ^a~l Dayc4 NO No Automatic Transition Across Contract Y83 Yes Yes Years Process oan'.wmex Doee the bdnm FlA Deb YBS ~M~~ Y85 APPty~ edjud mde lln Iprrore the y,~,,,,, ~'"'"~^tl+~"" AdjW code q anuin ~i~7 Flus end Is transitlon NO Is the chk refill ~~~ T~ ~ ~ BDoap~Fam hinln 120 In (intliatecthat IM YBS DSLIMIT overritle flag set flab on Edit a N 0 SKEY_HICL, 018 ppl Mpg ~M a.y. (uapuond H~Siwrs~ ADduD COD tlrup is inthe inmilion at'y"1 or NULL? ~o to our aymf E LIST CMS RED limilc ~wr+ LM) Is the RX a refill? (refill#> 0) No This step applies to specific subset of restrictions only, with rnemnerisno~in o notedadjudcodes: tremilion. Yes Yes Restriction Adjud Code irn BRB5tr100n5 ^rn0'f ~'"'"' PA_REQD A PA_REQH A MEMBER AGE A QS LIMIT B QS IN DS LIM B QS LIMIT PCT B ADpend A, B, C, end/ QTY_SUPPLY B or o to aejua mde list QTY_SUPPLY2 B FILL LIMIT D anathem~esontne STP THPY C ~afl ~~ upon me rw~em no ae~~d ~~m~ o~emm~~ ~aa ru Ye Process Gaim Produce Tre~itbn Fle. Include only approved claims when eoi~ <o0e Icl comaira a A, B, C, D, at.