March 16, 2005

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Medicare Part D CriticalUpdates for Infusion
ProvidersA National Home Infusion Association
AudioconferenceSponsored by Innovatix, LLC

• March 16, 2005
• 1200noon -130pm EST

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Presenters

• Lorrie Kline Kaplan
• NHIA Executive Director
• Bruce Rodman
• NHIA Director of Health Information Policy
• Alan Parver
• Counsel to NHIA , Powell Goldstein LLP
• Dan Boston
• Exec. VP Partner, Health Policy Source

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Medicare Part D Two pathways of activity right
now for our community

• Aggressive advocacy FIX THE PROBLEMS
• Work with CMS, Congress, the Administration, Part
  D,
• and MA plans
• Education and information on the benefit as
  written
• Prepare providers to make sound business
  decisions regarding participation in the program
• Assist Part D plans in understanding distinct
  issues associated with home infusion

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Medicare Part D Positive Components for Home
Infusion

• Only specialized infusion pharmacies can provide
  home infusion therapies
• Part D plans must demonstrate that they provide
  access to home infusion pharmacies
• Part D plans can establish distinct quality
  standards for home infusion drugs for the
  protection of beneficiaries

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Medicare Part D Positive Components for Home
Infusion

• Part D plans can negotiate different dispensing
  fees or drug reimbursement to reflect increased
  costs of providing infusion therapies
• Significant problems remain for home infusionno
  precedent for most aspects of the plan

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Home Infusion Under Part D
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Part D Prescription Drug Plans

• Two Types Of Plans Available
• Stand-Alone Coverage Of Part D Drugs
• a/k/a Prescription Drug Plans (PDPs)
• Standard Coverage Or Actuarial Equivalent
• Most Medicare Advantage (Part C) Plans Must Offer
  Part D Benefit To Members
• a/k/a Medicare Advantage Prescription Drug
  Plans (MA-PD Plans)

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Part D Plans

• Plans compete based on premiums and negotiated
  drug prices
• At least 2 plans per region (34 regions)
• At least 1 must be a stand-alone PDP
• No limit on number of approved plans

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Standard Benefit 2006
Out-of-pocket Threshold
Catastrophic Coverage
Total Spending
250
2250
5100
Coverage Gap (Donut Hole
75 Plan Pays

Deductible
95
25 Coinsurance
Total Beneficiary Out-Of-Pocket
750
3600 TrOOP
250
15 Plan Pays
5 Coinsurance
Direct Subsidy/ Beneficiary Premium
Beneficiary Liability
Medicare Pays Reinsurance
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Enhanced Alternative Benefits

• Part D benefits beyond basic or standard
  coverage can be offered by enhanced alternative
  plans in 2 forms
• Reduced cost-sharing (reduced premiums,
  coinsurance/ copays, and/or deductibles and/or an
  increase in the initial coverage limit)
• Coverage of non-Part D drugs
• Coverage of supplies, equipment, services for
  home infusion

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MA-PD Issues/Considerations

• Home infusion is part of the medical benefit for
  most Medicare managed care (MA) plans
• How does Part D affect current programs?
• Will home infusion drugs be subject to donut
  hole?
• Standard benefit likely
• Enhanced alternativenot necessarily

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Low Income Subsidies

• Who is eligible?
• Medicare-Medicaid dual-eligibles
• Part D enrollees with income lt 135 FPL
• Up to 12,569 (2004) and assets lt6,000 for
  individuals
• Part D enrollees with incomes 135-150 FPL
• 12,569 -13,965 (2004) and assets lt10,000

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Special Issues for Medicaid and Low-Income
Enrollees

• Dual-eligibles
• Auto-enrollment
• Medicaid will no longer cover drugs for
  dual-eligibles
• Major concerns for long-term care providers or
  others with high Medicaid

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Home Infusion Coverage Generally Stated
Home Infusion Product or service Medicare Patient with Stand-Alone PDP Plan Medicare Advantage Patient with MA-PD
Prescription Drugs Yes dispensing fee Yes dispensing fee
Equipment and Supplies No Potentially by the MA plan (in per diem)
Home nurse visits No (Part A covers if home bound) Potentially by the MA plan (or Part A)
Professional Pharmacy Services Yes if directly related to drug dispensing No ongoing care between drug dispensing Yes if directly related to drug dispensing, or Potentially all paid by MA plan (in per diem)
Care Coordination No Potentially by the MA plan (in per diem)
MTMP Potentially--Is patient eligible?--Do you provide? Potentially --Is patient eligible?--Do you provide?
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Home Infusion Coverage Details

• Not covered
• Enteral nutrition
• Vitamins and minerals added to TPN
• Heparin when used for flushing
• Out of formulary without grant of exception

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Home Infusion CoverageParts A/B vs. Part D

• A drug coverable under Parts A or B as
  prescribed, administered and dispensed to the
  patient cannot be paid under Part D
• Example If meets DMERC coverage policy, cannot
  be covered by Part D. Otherwise, it can be
  covered
• Example If meets Part B Carrier coverage policy
  for physician AIC, can be covered by Part D if
  administered in home

Formulary restrictions apply
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Coverage The Dispensing Fee

• According to CMS, payment can include
  compensation for reasonable pharmacy costs,
  including costs of
• Compounding
• Pharmacists time in verifying patient
  information
• Performing QA activities associated with
  preparing the drug
• Professional services, such as patient
  counseling, if related to QA activities or to
  satisfy state pharmacy practice standards
• Overhead associated with the facility and
  equipment
• Home delivery

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Coverage Dispensing Fee (2)

• Different dispensing fee could be established for
  home infusion pharmacies vs. retail pharmacies
• PDPs and MA-PDs not supposed to reimburse in the
  dispensing fee for
• Equipment and supplies
• Care coordination
• Professional pharmacy services unrelated to
  dispensing nor compensated through MTMP
• Nursing visits
• However

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Coverage What About Rates?

• Concept of Part D market forces set rates
• No Medicare fee schedules or allowances
• Drug payment is negotiable
• Does not have to be ASP-based
• Dispensing fee is negotiable
• Both rates must be sufficient to ensure access

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No Secondary Coverage?

• CMS Enrollees will have access to home infusion
  services, though they may have to pay for
  supplies, equipment, and professional services
  out-of-pocket particularly if they are enrolled
  in a Part D plan especially a standalone
  PDPand have no source of supplemental coverage
• If you participate, must you accept all patients?
• Probably a contractual issue
• Are these patients appropriate for home
  infusion?

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Your Costs for Coordination of Benefits (COB)

• Patients may have secondary coverage for the drug
  and Part D plans must coordinate with
• State Pharmaceutical Assistance Programs (SPAPs)
• Medicaid programs (including 1115 waiver
  programs)
• Group health plans
• FEHBP plans
• TRICARE and VA
• Indian Health Service (IHS)
• Rural Health Centers
• Federally Qualified Health Centers
• Other entities as CMS determines

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Your Costs for COB (2)

• Patients may have secondary coverage for non-drug
  products and services
• Medicare Advantage plan
• Medicaid programs
• Group health plans (retiree)
• FEHBP plans
• TRICARE and VA
• IHS
• Etc.

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Your Costs for COB (3)

• All Medicare secondary payer rules apply
• The TrOOP
• True-Out-Of-Pocket costs 3,600/yr.
• Part of the statute
• After 2006, increases by annual increase in per
  capita Part D drug expenditure

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Standard Benefit 2006
Out-of-pocket Threshold
Catastrophic Coverage
Total Spending
250
2250
5100
75 Plan Pays
Coverage Gap

Deductible
95
25 Coinsurance
Total Beneficiary Out-Of-Pocket
750
3600 TrOOP
250
15 Plan Pays
5 Coinsurance
Direct Subsidy/ Beneficiary Premium
Beneficiary Liability
Medicare Pays Reinsurance
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Your Costs for COB (4)

• Adding to complexity even for retail
• Secondary and MSP coverage
• Co-pay and donut hole depends on TrOOP
• CMS to online automate/adjudicate secondary
  payments at point-of-sale report to Part D plan
• How much secondary online adjudication occurs now
  in retail?

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Your Costs for COB (5)

• Adjustments/recoups given updated status to Part
  D plan of beneficiary status within TrOOP
• 3,600 to collect if patient is over indigent
  thresholds
• Demonstrating to secondary that you did not get
  complete Part D payment because
• Deductible, co-pay (25, 5 or whatever), or
  donut hole
• Necessary drugs/vitamins not paid for, e.g.
  heparin for flush
• Equipment, supplies, nurse visits, professional
  pharmacy services, care coordination not covered
  and unlikely you can bill them to demonstrate a
  denial EOB
• Likely to be even worse than current DMERC denial
  situation!
• How will secondary payers understand all of this
  to correctly pay your claims?

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Insurance Verification Becomes Even More Critical
and Complex

• You must check for Part D coverage (standard or
  otherwise), wrap-around, and other coverage
• You must be experts at what is coverable under
  Part B vs. Part D vs. other secondary
• You must know what is fully or nearly covered for
  Medicaid and indigent patients
• ALERT On 1/1/06, dual-eligibles switch to Part D
• No drug coverage if you arent in the dual
  eligibles Part D plan network
• Transfer them or sign up for Part D is your
  choice

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Claiming and Coding NHIA Advocacy

• NHIA has fought long and hard for home IV
  claiming simplification via
• Standardized coding of charge lines on claims
• Single consolidated claims include charges for
  services, supplies, equip and drugs to single
  primary payer NOT SPLIT BILLING
• Electronic claiming as path to faster
  adjudication
• X12N 837 professional claiming for your
  professional medical practice of home infusion
• Coverage by medical benefit as has been
  predominant in private/Medicare for 15 yrs
  (drugs and all else)

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Claiming and Coding Achievements

• HCPCS per diem S-codes now the standard for
  submitting claims to private payers
• Infusion providers are lowering DSOs through X12N
  837 electronic claiming
• CMS recognized since early 2003 that home
  infusion isnt retail pharmacy
• Retail NCPDP claim doesnt meet home IV claiming
• requirements
• X12N 837 required per HIPAA for home IV
• 1/14/05 HHS Secretary letter affirms 837 for
  home IV (posted on www.nhianet.org)

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Claiming and Coding Part D Rule

• CMS again recognizes differences and
  distinguishes between retail vs. home infusion
  pharmacies in Part D final rule
• CMS requires Part D plans to comply with HIPAA
  regulations (Part D Rule 423.50)
• This means home IV claims to PDPs and MA-PDs
  should be submitted via X12N 837

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Claiming and Coding Issues

• The benefit is structured by CMS as primarily a
  retail prescription drug benefit
• Accurate calculation of co-pays at point of sale
  (TrOOP) requires on-line adjudication
• Online adjudication is fundamental and NCPDP is
  assumed

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Part D Networks Must Include Home Infusion
Pharmacies

• Part D plans must provide adequate access to
  home infusion pharmacies
• No requirement for specialty pharmacies that do
  not provide home infusion services

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Part D Pharmacy Networks

• CMS deadline to Part D plans to demonstrate they
  have home infusion networks in place August 1
• PDPs and MA-PDs can negotiate separate
  contractual terms for infusion pharmacies

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Any Willing Pharmacy

• Any willing pharmacy requirements apply to home
  infusion
• BUT MA-PD plans that own and operate their own
  pharmacies can apply to waive any willing
  provider if they can meet access standards

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Formularies

• Part D plans may submit their own classification
  system for CMS review, or
• Use USP model guidelines (146 classes)
• CMS will evaluate to ensure access to medically
  necessary drugs and no discrimination against any
  beneficiary groups

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Formularies (2)

• At least 2 drugs per class
• Some classes broad?2 covered drugs will be
  inadequate
• Example USP category 118,immunologic agents
  includes
• immune suppressants
• Immune stimulants
• Immunomodulators

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Formularies Considerations for Part D Plans

• NHIA recommends open formulary for home infusion
• Rarely if ever used in private sector
• Pharmacists and other home infusion professionals
  should be on the PT cmttee
• Decisions should reflect other clinical and cost
  factors
• Patient factors, supplies, drug delivery device,
  VAD, dosing schedule, nursing considerations

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Formularies Considerations for Part D Plans (2)

• Home infusion patients require additional
  protections
• Patients often need to continue the drug
  initiated in inpatient (or other) stay
• Need an efficient exceptions process

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Part D Plan Use of Mail-Order

• Part D plans can encourage enrollees to use
  mail-orderbut cant require it
• Differential co-pays for preferred vs.
  non-preferred pharmacies
• CMS cannot intervene

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Quality Standards

• Primarily based on state pharmacy practice act
• Part D plans can establish additional quality
  standards for home infusion pharmacies
• Many state laws are not adequate
• CMS encourages plans and their network pharmacy
  providers to establish and agree upon additional
  QA standards as necessary, including those
  required for accreditation.

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Quality Standards

• Private plans use accreditation to credential
  providers (limited exceptions to ensure access)
• JCAHO, ACHC, CHAP
• An assessment of the entire patient care process
• Quality standards coming for Part B home IV
  suppliers, to be implemented by accreditors
• Accredited providers cannot provide a lower
  standard of care for Part D patients

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Medication Therapy Management

• Designed to optimize therapeutic outcomes for
  targeted beneficiaries by improving medication
  use, reducing adverse drug events
• Furnished by pharmacist or other qualified
  provider (i.e., physician, PBM, etc.)
• Fees must reflect time and resources required to
  implement program

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MTM (2)

• Targeted beneficiaries
• Multiple diseases
• Multiple drugs
• Cost threshold (Likely to incur)

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Important Part D Dates
Plan Notice of Intent February 18, 2005
Plans Apply March 23, 2005
Plans Submit Formulary April 18, 2005
Plans Submit Bid June 6, 2005
Plans Submit Home IV Pharmacy Network to CMS August 1, 2005
CMS awards bids September 2, 2005
Plans start marketing to beneficiaries October 1
Open enrollment for 2006 Nov. 15, 2005 - May 15, 2006
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NHIA Advocacy Areas

• A lost opportunity for Medicare cost-savings
• Fix Part D or find a more appropriate benefit
• Cover the required services, supplies, equipment
• Drug-only coverage not meaningful!
• New home IVIG benefit is a perfect example
• Adopt prevailing quality standards
• Educate plans on home infusion under Part D

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NHIA Advocacy Activities

• Grassroots campaign
• Letter writing, key member contacts, fly-ins
• NHIA Legislative Defense Fund ensures vigorous
  representation for NHIA members (legislative and
  regulatory)
• Per Diem Cost Study with Abt Associates
• July 2005 completion date
• Contact us for more information

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Legislative Outlook
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Summary and Wrap-up

• Plans submit infusion networks to CMS Aug. 1
• Providers must each make an individual business
  decision whether to participate
• Impact on Medicare managed care, Medicaid,
  retirees
• Accreditation issues
• Complex coordination of benefits
• Services, supplies, and equipment for those w/no
  secondary
• Risk and liabilityprofessional and financial

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An Ongoing Process for All of Us

• Stay Up-to-Date!!
• NHIA members-only Part D resource page
• Join NHIA if you havent alreadywe need your
  support!
• Support the NHIA LDF

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• Send questions to info_at_nhianet.org
• Join www.nhianet.org
• Support Legislative Defense Fund www.nhianet.org

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• Thank you