CMS held a Special Open Door Forum (ODF) on the topic of Medicare Part D and Hospice on April 8, 2014. This ODF was an opportunity for providers to ask questions of CMS subject matter experts on the Part D Payment for Drugs for Beneficiaries Enrolled in Hospice – Final 2014 Guidance. This guidance was released on March 10, 2014 and is effective May 1, 2014. Because previous Part D guidance was ambiguous, and there were no objective criteria for sponsors to use in making Part A vs. Part D coverage and payment decisions, the policy will be applied prospectively.
During the ODF CMS reminded providers that, per statute, Medicare excludes from coverage under Part D any drugs that are available under Parts A or B. Since hospice is a Part A benefit, drugs covered under the hospice benefit for an individual can not be covered under Part D.
In order to avoid duplicate payments for drugs covered under hospice or waived through the hospice election, CMS directed Part D sponsors to place beneficiary-level prior authorization (PA) requirements on all drugs presented to Part D for payment for beneficiaries who are receiving hospice services. More detailed information is found in the Part D Payment for Drugs for Beneficiaries Enrolled in Hospice – Final 2014 Guidance, which can be accessed here.
A summary of the Special ODF highlighting frequently asked questions is below:
What is the PA process, and can the hospice initiate it?
The Part D sponsors will use the existing standard PA process, which means a reject code will be generated by the Part D sponsor for any medications presented for payment for beneficiaries receiving hospice services. This reject code is not a denial. It is a rejection. This means the sponsor needs more information before the claim can be processed. Only the beneficiary/representative or the prescriber can request the PA. The reason for this is related to the regulations pertaining to Part D plans. The PA is a determination of payment. The hospice, the Part D plan sponsor, or the beneficiary is determined to be responsible for payment.
Although the hospice cannot initiate the PA process, it can provide information. Both CMS and NAHC urge hospices to proactively communicate with the patient’s Part D plan sponsor. This includes notifying the plan sponsor of the beneficiary’s hospice election (by filing the NOE as soon as possible), providing a list of prescriptions that will be presented for Part D payment and an acceptable explanation of why the medication is unrelated; as well as notifying the sponsor of a patient’s revocation or discharge. This communication will expedite the filling of prescriptions and minimize delays for beneficiaries. In most cases the hospices can provide this information via the plan sponsor’s pharmacy hotline.
Can the plan sponsor deny the medication even after the explanation is provided?
When a coverage determination is requested, again by the beneficiary/representative or the prescriber, the plan sponsor should contact the prescriber or the hospice and accept a verbal or written explanation of why the drug is unrelated. It is CMS’ expectation that the plan sponsor will accept the explanation; however, this is not enforceable because there is not a regulation requiring this acceptance. However, CMS believes that the plan sponsors will comply, essentially stating that there is not an incentive for the sponsor to deny the claim after an acceptable explanation is received. CMS stressed that an adequate explanation is a “coherent clinical explanation”. A statement that the medication is unrelated is not acceptable and the sponsor can deny payment of the medication if there is not an adequate explanation. It is incumbent on the hospice or the provider to be clear about why the medication is unrelated to the terminal illness and related conditions. There are other legitimate reasons why the sponsor could deny payment such as the dispensing pharmacy being out of network or the medication requires prior authorization under the sponsor’s utilization management program and those requirements have not been met
There will be no dispute resolution process in 2014, so the PA documentation will support coverage of the drug under Part D. This policy does not affect beneficiary appeal rights. Beneficiaries retain the right to appeal Part A coverage decisions through the Medicare fee-for-service process and Part D coverage decisions through the Part D appeals process.
We are calling the Part D plan sponsor to proactively provide communication, but the sponsor states they are not aware of the PA process.
CMS reminded listeners that the sponsors just became aware of this policy on March 10, 2014 just as the hospices did. So, it may take a little more time for all the sponsors to have adopted and implemented the policy. CMS is hopeful that some of the problems hospices and beneficiaries have encountered, i.e. long wait times on telephone calls, etc., will improve as time goes on. CMS recently held a call for the Part D plan sponsors on this topic which provided some answers and clarification to the Part D plan sponsors which will help with this as well.
What happens when medications are paid for by the Part D plan sponsor (after receiving an acceptable explanation), after a patient has elected hospice? Will the sponsor chase the hospice for payment of the medications?
If the sponsor has paid for drugs after the hospice election, but before receiving notification, the sponsor should contact the prescriber or hospice for a retrospective determination of payment responsibility for the drugs.
When a drug is determined to be the hospice’s (or beneficiary’s) responsibility, the sponsor should negotiate directly with the responsible party to recover payment.
Questions can also be submitted to PARTDPOLICY@cms.hhs.gov. Please include “Hospice” in the subject line.