Appeal type: unknown
Decision: unknown

Regulations at 42 Code of Federal Regulations Section 423.578(a)(6  ) allow Part D sponsors to exempt a formulary tier, in which it places very high cost and unique items, from tiered cost-sharing exceptions. In order to ensure that a Part D sponsor does not substantially discourage enrollment by specific patient populations reliant upon these medications, the Centers for Medicare & Medicaid Services will only approve specialty tiers within formularies and benefit designs that comply with the following: 1) Only one tier is designated a specialty tier exempt from cost-sharing exceptions; 2) Cost-sharing associated with the specialty tier is limited to 25% after the standard deductible and before the initial coverage limit (or up to 33% for sponsors with decreased or no deductible under alternative prescription drug coverage designs). When applying a reduced deductible, sponsors are limited to the maximum specialty coinsurance levels as defined each year in the Bid User Manual. The deductible applied to the non-specialty tiers may not exceed the deductible that is applied to the specialty tier; 3) Only Part D drugs with sponsor negotiated prices that exceed the dollar-per-month amount established by the Centers for Medicare & Medicaid Services in the annual Call Letter may be placed in the specialty tier. The Centers for Medicare & Medicaid Services will apply an upfront evaluation across all plans for drugs that exceed the dollar-per-month threshold and are intended for inclusion in the specialty tier; and 4) If not all drugs (including all strengths) within a category or class meet the criteria for inclusion in the specialty tier, the sponsor must ensure that placement of the remaining drugs among the other tiers of the formulary does not substantially discourage enrollment. Part D sponsors will need to evaluate the negotiated prices at the drug product strength, package size, and formulation level in order to determine appropriate inclusion of the drug in the Part D plans specialty tier. In addition to cost calculations, the Centers for Medicare & Medicaid Services considers claims history in reviewing the placement of drugs on Part D sponsors specialty tiers. Except for newly approved drugs for which Part D sponsors would have little or no claims data, the Centers for Medicare & Medicaid Services will approve specialty tiers that only include drugs when their claims data demonstrates that the majority of the fills exceed the specialty tier cost criteria. Part D sponsors should be prepared to provide the Centers for Medicare & Medicaid Services with the applicable claims data during the formulary review process if requested. Also, if a Part D drug product is available in multiple strengths, package sizes, and formulations, the Centers for Medicare & Medicaid Services will only allow inclusion on the specialty tier of those strengths, package sizes, and formulations that would reasonably exceed the dollar-per-month threshold.Part D sponsors must evaluate the long acting nature of some drug formulations and calculate the monthly cost across the drug's full duration of action in considering possible specialty tier placement. For example, if the specialty tier threshold was $600 dollars, a long acting formulation with a plan negotiated price of $900 dollars that lasts for three months would not be eligible for the plan's specialty tier since the monthly cost is only $300 dollars. [The Centers for Medicare & Medicaid Services Internet-Only Manual, Publication 100-18, Medicare Prescription Drug Benefit Manual, Chapter 6, Section 30.2.4]