Update on CMS Guidance on Part D and Hospice Drug Coverage

On July 18th the Centers for Medicare and Medicaid Services (CMS) released interim guidance intended to address the highly problematic May 1st Guidance on Part D and hospice drug coverage.   The updated CMS guidance responds to the March 10, 2014, CMS memorandum to Part D Plan Sponsors and Medicare Hospice Providers entitled, "Part D Payment for Drugs for Beneficiaries Enrolled in Hospice – Final 2014 Guidance".   The guidance, based on a 2012 Office of the Inspector General report, identifies that Medicare is likely paying for Medicare-financed medications twice both through the Part D Prescription Drug Plans’ (PDP) capitation payments and through the hospice per diem.  The guidance became effective on May 1, 2014.   In brief, the guidance caused significant confusion among PDPs, hospice providers, pharmacies, consultant pharmacists, and skilled nursing center providers (SNF).  The results of this confusion were based on:

  • PDP prior authorization denials for medications and, because of such denials, beneficiaries who elected hospice have been largely unable to access needed medications;
  • SNF providers have been left with the costs of medications denied by PDPs but still provided by the SNF; and
  • Allegations that in some instances PDPs have denied drug prior authorizations and SNFs have denied delivery of medications because of un-reimbursable costs.  

AHCA has provided the following strategies to manage policy regarding Part D payment for drugs for hospice beneficiaries.  Based on the July 18, 2014 guidance from CMS, Part D sponsors are strongly encouraged to place beneficiary-level prior authorization (PA) requirements on four categories of prescription drugs including analgesics, antiemetics, laxatives and anxiolytics.  The PA requirements are significantly improved by the limitation to these four categories of prescription drugs versus the previous requirements for PA on all drugs.  CMS expects these four categories of prescription drugs will routinely be considered reasonable and necessary for the palliation and management of a beneficiary’s terminal illness and related conditions, and therefore are the payment responsibility of hospice providers.  

Review of all medications at the time of hospice election to identify which medications are appropriate for hospice coverage versus Part D claim versus beneficiary responsibility and completion of PA continues to be very important.  This should be done by the hospice provider in collaboration with the resident, family and interdisciplinary team.  Federal regulations require Medicare hospice providers conduct and document a patient specific comprehensive assessment in writing, which must include a drug profile and state whether the medications are related or unrelated to the terminal illness and related conditions.  

In addition, it continues to be important for the SNF to work collaboratively with the hospice provider and communicate medication changes timely to determine the appropriate path for coverage of the medication – Part D plan eligible (medications for condition unrelated to terminal illness or related conditions), hospice provider responsibility (medications for palliation and management of terminal and related conditions), beneficiary/resident responsibility (medications that don’t fit above conditions but resident chooses to use medication or chooses medication that is not on formulary and refuses to try formulary equivalent first).  

Following are points which may be useful in communicating with hospice providers proactively and/or when confronting challenges in accessing medications.

  • CMS strongly encourages hospice providers to provide a compassionate first fill for any medication needed by a beneficiary who is experiencing difficulty in accessing the drug.
  • An override of the rejection from the Part D sponsor is now permitted at the point of sale. Therefore, the hospice provider can contact the Part D sponsor with an oral or written statement that the drug is unrelated to the terminal illness and related conditions or the hospice provider may provide a written statement to the pharmacy or the beneficiary to transmit to the Part D sponsor.  Additional details stating why the drug is unrelated are not necessary at that time, however hospices are expected to maintain a record of the clinical basis for the statement that the drug is unrelated and provide it upon request.

CMS is expected to release a Q&A document intended to address any questions concerning the July 18, 2014 guidance. AHCA will continue to monitor CMS activity in this area and keep members informed of any updates.