By Julie Mason

In 2015, the Medicare Prescription Drug plan program (Part D) enters its 10th year since its debut in 2006 pursuant to the Medicare Modernization Act (MMA) of 2003. As this offspring program is looking as successful and viable as its parent, Medicare Parts A and B (37.5 million beneficiaries will be enrolled in a drug plan in 2015), we should also be mindful of the hard work the Centers for Medicare & Medicaid Services (CMS) has put into the management of the Medicare Advantage Prescription Drug program (MA-PD). Incidentally, 2015 will also celebrate the Golden Jubilee of Medicare, signed into law by President L.B. Johnson in 1965.
Part D represents the most momentous addition to Medicare benefits in 40 years, when original Medicare was launched. Prior to Part D, Medicare beneficiaries had access only to a limited number of drugs principally used for the treatment of cancer administered in physicians’ offices (“Part B”), but not in the ambulatory setting.
During the last decade, Part D has evolved with passage of new legislation such as the Medicare Improvements for Patients and Providers Act (MIPPA) of 2008 and the Affordable Care Act (ACA) of 2010. The former codified six classes of drugs of clinical concern and added benzodiazepines and barbiturates as covered Part D drugs.

The latter is closing the Part D coverage gap by 2020. CMS has also increased surveillance of drug plan sponsors through data scanning of encounter data (also known as Prescription Drug Event or PDE), “one-third” financial audits, an expanded Recovery Audit Contractor (RAC) program to identify improper payments for Medicare part C and D and increased referrals for potential fraud to the Medicare Drug Integrity Contractor (MEDIC). In 2013, CMS began desktop audits using its oversight authority, TMPA (Transition Monitoring Program Analysis) and FAA (Formulary Administration Analysis), that emulate the Formulary Administration portion of the program audit. To help drug plan sponsors comply with the myriad rules and requirements, CMS publishes announcements with guidance, refinement of existing rules, audit findings and best practices.
These announcements begin with the Call Letter in April (with a draft announcement in February) that lays out any forthcoming changes to the MA-PD program and final rules to implement statutory requirements, improve program efficiencies, clarify program requirements, and improve payment accuracy. CMS’ surveillance is grounded in data with help from external vendors (Acumen, data validation auditors, Transaction Facilitator). To keep up with and perform well for these surveillance programs, sponsors have to implement internal monitoring processes, data management capabilities and the acumen (no pun intended) to operationalize CMS rules. If sponsors find these challenging, they are well advised to look for external consultancy before major gaps catch the attention of the enforcer.

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