**Department of Health and Human Services**

**42 CFR Parts 422 and 423**

**Re: CMS 4131-P**

**RIN 0938-AP24**

**Medicare Program; Revisions to the Medicare Advantage and Prescription
Drug Benefit Programs**

**ACTION:** Proposed Rule

**Part 422 -- Medicare Advantage Program**

1.  **Special Needs Plans: (§422.4)** -- Ensuring Special Needs Plans
    Serve Primarily Special Needs Individuals in one of three
    categories: individuals dully-eligible for both Medicare and
    Medicaid, institutionalized individuals and individuals with sever
    disabling chronic conditions that the Secretary determines would
    benefit from enrollment in a SNP.

**Comments:** We concur with the proposed amendment to §422.4 (a) (1)
(iv) (B) "to require that MA organizations offering SNPs limit new
enrollment of non-special needs members to no more than 10 percent of
new enrollees and that 90 percent of new enrollees must be special needs
individuals as defined in §422.2." We strongly believe that this change
would encourage the development of prescription drug formularies (and
other health care procedures) that are targeted to special needs
populations. This would significantly reduce the annual disruptions of
formulary changes that occur when an enrollee either changes plans or is
reassigned to another SNP.

> b.) **Ensuring Eligibility to elect an MA plan for Special Needs
> individuals (§422.52).** CMS proposes clarifying that MA organizations
> must establish a process to verify that potential SNP enrollees meet
> the SNPs specific eligibility requirements. CMS proposes in §422.52
> (g)

**Comments:** We again concur with the proposed changes "that MA
organizations offering SNPs for dual eligible beneficiaries establish a
process approved by CMS to obtain information from the State about the
applicant's Medicaid status and that this verification must be obtained
prior to enrollment." Too often, pharmacies have been caught in the
middle when it is later found that an individual is not a dual eligible
and MA's and PDP's have come after the pharmacy for the prescriptions
filled by that pharmacy even though the pharmacy filled those
prescriptions in good faith and had same captured on line by the MA or
PDP. This places an unfair burden on pharmacy providers and other
providers in the case of an MA.

> c.) **Model of Care (§422.101 (f):** CMS is proposing that SNPs
> develop a model of care specific to the needs population they are
> serving by proposing to add new paragraph (f) to §422.101 which would
> specify that SNPs must have networks with clinical expertise specific
> to the special needs population of the plan; use performance measures
> to evaluate models of care; and be able to coordinate and deliver care
> targeted to the frail/disabled, and those near the end of life based
> on appropriate protocols."

**Comments:** We concur with these changes and would suggest that this
model of care include pharmacists who specialize in chronic disease
states including but not limited to: diabetes, asthma, psychiatric,
HIV/AIDS, renal failure, cancer, etc. Many of these patients see their
pharmacist far more often than any other provider and adherence to their
drug regimen is critical to their care and quality of life.

d.) **Dual** **Eligible SNPs and Arrangements with States (§422.107):**
CMS proposes to add a new §422.107 which would require "that the MA
organization seeking to offer a SNP to serve the dual eligible
population must have, at a minimum, a documented relationship, such as a
contract, memorandum of understanding (MOU), data exchange agreement, or
some other agreed upon arrangement with the State Medicaid agency for
the State in which the dual eligible SNP is operating, in an effort to
improvement Medicare and Medicaid integration." CMS also proposes in
§422.107 (a) that "all SNPs, whether entering the market or already
established at the time these regulations become effective, must have in
place a dual eligibility verification arrangement and information
sharing on Medicaid providers and benefits." Additionally, CMS proposes
in §422.107 (b) "that within 3 years of the effective date of these
regulations, all dual eligible SNPs already offering contracts are
required to develop additional formal arrangements with States, and that
new SNPs offering contracts after these regulations are effective, are
required to have formal arrangements by their third contract year."

**Comments:** We concur with these changes as a means of ensuring that
dual eligible have no break in coverage and that providers are not left
chasing coverage after the fact. This is critical to good patient
specific care.

e.) **Special Needs Plans and Other MA Plans with Dual Eligible:
Responsibility for Cost-Sharing (§422.504 (G) (1)):** CMS is amending
§422.504 (g) (1) (i) and §(g) (i) (ii) "to require that all MA
organizations, including SNPs, with enrollees will not be held liable
for Medicare Parts A & B cost sharing when the State is liable for the
cost sharing." CMS proposes that contracts with providers state that the
provider will do this by either accepting the MA plan payment in full
(§(g) (iii) (A)) or by billing the appropriate State source (for example
Medicaid) (§422.504 (g) (1) (iii) (B))."

**Comments:** We could support these changes if all states were
"required" to provide "cross-over" billing as it relates to Medicare
Part B claims submitted by pharmacies. As it stands in New York State,
CMS has granted this state a waiver to the requirement of providing
"electronic cross-over" billing for dual eligible which placed thousands
of pharmacies in jeopardy of recoupment during audit and the additional
cost of transmitting two separate claims. In addition, until July 1, of
2007, most pharmacies had no way of knowing whether many patients was a
dual eligible.

2.  **MA MSA Transparency (§422.103 (e)):** CMS proposes in new
    §422.103 (e) "to require that all MSA (Medical Savings Account)
    provide enrollees with information on the cost and quality of
    services as specified by CMS and provide information to CMS on how
    they would provide this information to enrollees." The purpose is to
    provide "transparency" to enrollees so that they may compare costs
    and quality.

**Comments:** We concur with this change as enrollees should have
information on all options available to them in the Medicare program.

**B. Proposed Changes to Part 423-Medicare Prescription Drug Benefit
Program**

1.  **Passive Election for Full Benefit Dual Eligible Individuals
    (FBDE)Who Are Qualifying Covered Retirees (§423.34):** CMS states
    that a significant number of FBDEs with coverage through an employer
    group plan -- especially those with full health care coverage --
    automatic enrollment into a PDP can have serious and sometimes
    irreversible negative consequences, either for the beneficiary
    and/or for family members. CMS proposes to revise §423.34 (d) (1),
    and add new §423.34 (d) (3), "to establish a process under which
    FBDE individuals who we know to be enrolled in a qualifying employer
    group plan would be deemed to decline Part D coverage if, following
    a notice of their options, they do not indicate that they wish to
    receive it and would not be part of the group subject to default
    auto-enrollment."

**Comments**: We concur with this change as necessary to protect
individuals or their families from inadvertently losing their qualified
employer-based health care coverage.

2.  **Part D Late Enrollment Penalty (§423.46):** CMS is clarifying that
    under §423.46 (b), that Part D plans must obtain information on
    prior creditable coverage from all enrolled or enrolling
    beneficiaries and report such creditable coverage or number of
    months without creditable coverage to CMS. CMS also established that
    individuals who are determined to have late enrollment would have
    the opportunity to ask for a reconsideration of the determination
    under §423.46 (c) consistent with §1860 (D) -22 (b) (6) (C).

**Comments:** We concur with these changes as long as the
reconsideration request option is well known to enrollees and the
request procedure is easy to accomplish.

a.  **Subpart C -- Benefits and Beneficiary Protections --
    (Definitions)**

    i.  **Incurred Costs:** CMS proposes t amend the definition of
        "incurred costs" to reflect that certain nominal co-payments
        assessed by Manufacturer Patient Assistance Programs (PAPS) can
        be applied toward an enrollee's TrOOP balance or total drug
        spend for covered Part D drugs paid by the plan.

**Comments:** We concurred with this amendment to the definition under
Subpart C, (a) (i).

ii. **Negotiated Prices: Under §423.104 9d) (2) (i),** the definition of
    a beneficiary's "cost sharing" is 25 percent of "actual cost." (70
    CFR 4535). "Actual Cost" is defined in §423.100 as "the negotiated
    price for a covered Part D drug when the drug is purchased at a
    network pharmacy." Under §423.124 (a), the term "negotiated prices"
    is defined as "prices for covered Part D drugs that (1) are
    available to beneficiaries at the point of sale at network
    pharmacies; (2) are reduced by those discounts, direct or indirect
    subsidies, rebates, other price concessions, and direct or indirect
    remunerations that the Part D sponsor has elected to pass through to
    Part D enrollees at the point of sale; and (3) includes any
    dispensing fees. CMS proposes to revise §423.100 so that "negotiated
    prices" would state that they are "prices that the Part D sponsor
    (or other intermediary contracting organization (i.e PBM) and the
    network dispensing pharmacy or other network dispensing provider
    have negotiated as the amount the network dispensing pharmacy or
    other network dispensing provider will receive, in total, for a
    particular drug."

**Comments:** We strongly support this change in defining what is a
"negotiated price" and concur with CMS' change to define it as what is
paid to the network pharmacy. Patients have been prematurely "pushed" in
to the "coverage gap" by significant "spreads" being placed on generic
drugs, making patients pay more out-of-pocket) for these generic drugs
when paying the initial 25% co-pay and what could be much higher prices
for the same drug during the coverage gap than what they would pay if
they paid cash. We also strongly urge CMS to "eliminate" the use of
"fixed prices" as it relates to generics in contracts with plan
sponsors. Competition among generic manufacturers drives prices down as
more enter the market in a given year, not up on average. Plans need to
be more sophisticated on these contract terms as some where surprised
when they heard of the large "spreads" on generic drugs for their
enrollees as they were paying their PBM the higher reimbursement. This
"fixed pricing scheme by the PBMs has cost Part D enrollees millions of
dollars as every indication shows that this was wide spread. One needed
only check generic prices on line in the "Plan Finder" web site to see
that it was indeed wide spread. Taxpayers were charged tens of millions
more as fully subsidized and partially subsidized Part D enrollees were
"pushed" into catastrophic coverage sooner as well due to generic drug
"spreads. CMS has a fiduciary responsibility to the taxpayers to see
that this stops and should have proposed these changes last year. PBMs
need to be federally regulated and be required to be "fiduciaries" and
totally "transparent" with all plans they contract with in all
prescription drug programs. During the coverage gap, patients walked
away from the prescription counter when faced with paying these inflated
generic drug prices or they asked their pharmacist what drugs were the
most important to be filled. This IS NOT health care!

We concur with the changes that any "spreads" on Part D (PDP or MAPD)
programs be counted as "administrative costs and not an enrollees shared
cost.

We also strongly concur with the remaining proposed rules changes as
they relate to definition changes in the "retiree" assisted prescription
drug programs. Again, taxpayers subsidize those union and employer-based
programs and it is CMS' responsibility to insure that enrollees in those
programs as well are not prematurely "pushed" into catastrophic
coverage.

Submitted by:

Craig M. Burridge, M.S, CAE

Executive Director

Pharmacists Society of the State of New York

210 Washington Ave.. Ext.

Albany, New York 12203

Tel: (518) 869-6595

Tel: (800) 632-8822

Fax: (518) 464-0618