1 

August 12, 2010 

Office of Consumer Information and Insurance Oversight 

Department of Health and Human Services 

Attention: OCIIO-9991-IFC 

P.O. Box 8016 

Baltimore, MD 21244-1850 

Re: Docket No. OCIIO-9991-IFC: Interim Final Rules for Group Health Plans 

and Health Insurance Coverage Relating to Status as a Grandfathered Health 

Plan Under PPACA 

The Academy of Managed Care Pharmacy (AMCP) is pleased to provide 

comments in response to the Federal Register notice of June 17, 2010 on the 

Interim Final Rules for Group Health Plans and Health Insurance Coverage 

Relating to Status as a Grandfathered Health Plan Under the Patient Protection 

and Affordable Care Act (PPACA) – The Grandfathering Rule. 

AMCP is a national professional association of pharmacists and other health 

care practitioners who serve society by the application of sound medication 

management principles and strategies to achieve positive patient outcomes. 

The Academy’s 6,000 members develop and provide a diversified range of 

clinical, educational and business management services and strategies on 

behalf of the more than 200 million Americans covered by managed care 

pharmacy benefits. 

The PPACA as modified by the Reconciliation Act provides that certain group 

health plans and health insurance coverage existing as of March 23, 2010 are 

subject to only certain provisions of the Act. The statute refers to those plans 

and health insurance coverage as “grandfathered” health plans. Grandfathered 

health plans are not required to comply with certain requirements. For 

example, a grandfathered health plan would not have to meet the requirement 

that preventive health services be covered without any cost sharing. Those 

plans that do not qualify for grandfathered status must meet this requirement 

for plan years beginning on or after September 23, 2010. The interim final 

regulations address the various changes that will lead to the cessation of 

grandfathered status. 
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The Department of Health and Human Services (HHS) has determined that certain changes would cause a group 

health plan or health insurance coverage to cease to be a grandfathered health plan. However, HHS has invited 

comments on whether other changes should result in cessation of grandfathered health status for a plan or health 

insurance coverage One of the changes in question includes “changes to a prescription drug formulary, and if 

so, what magnitude of changes would have to be made.” 

AMCP strongly believes that the dynamic and constantly evolving nature of a drug formulary renders such a 

provision a non-compelling reason to discontinue grandfathered status. 

The medications and related products listed on a formulary are determined by a pharmacy and therapeutics 

(P&T) committee or an equivalent entity. Due to the multiplicity of medications on the market, the continuous 

introduction of new medications, and the discovery of clinical misadventures once a product has been in use, a 

formulary must be a dynamic and continually revised listing. In order to keep a formulary current, the P&T 

committee meets regularly to review newly released drugs and to assess analyses of drugs already in the 

marketplace. 

P&T committees are comprised of primary care and specialty physicians, pharmacists and other professionals in 

the health care field, and may also include legal experts and administrators. The P&T committee is responsible 

for developing, managing, updating and administering the formulary. The P&T committee also designs and 

implements formulary system policies on utilization and access to medications.1

The P&T committee reviews some or all of the following: 

• Medical and clinical literature including clinical trials and treatment guidelines, comparative 

effectiveness reports, pharmacoeconomic studies and outcomes data; 

• FDA-approved prescribing information and related FDA information including safety data; 

• Relevant information on use of medications by patients and experience with specific medications; 

• Current therapeutic use and access guidelines and the need for revised or new guidelines; 

• Economic data, such as total health care costs, including drug costs; 

• Drug and other health care cost data (not all P&T committees review drug specific 

economic data); and 

• Health care provider recommendations.2

Formulary changes should not be considered to be benefit changes. Formulary changes must occur on a regular 

basis as the Food and Drug Administration approves new medications and new uses for existing medications. 

P&T committees must consider formulary changes as new evidence becomes available on medications which 

would change previous decisions on the effectiveness or safety of medications. Health plans and insurers must 

be able to make formulary changes to provide the most appropriate, cost-effective care to their members. 

Medications may be added or deleted from a formulary as new medications or generic versions of existing 

medications become available. Examples of how new medications or generic versions of medications impact 

formularies include: 

• If a medication loses patent exclusivity allowing generic versions of the medication to become available, 

adding the generic version of the medication to the lowest tier and transitioning the brand name version 

 

1

 Academy of Managed Care Pharmacy. Concepts in Managed Care Pharmacy Series – Formulary Management. 2009. 

http://www.amcp.org/amcp.ark?p=AAAC630C (accessed July 23, 2010) 2

 Ibid. 
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to the highest tier on a formulary should not be cause for a plan to lose grandfathering status. This 

change by a health plan would allow members to have coverage for the generic version of the existing 

medication but at a lower cost. 

• If a manufacturer introduces a different formulation of an existing product (e.g. making a sustained 

release version of an already marketed product.), excluding the formulation should not be cause for a 

plan to lose grandfathering status. In this situation, health plan members would have coverage for one 

version of the medication. 

 

The recognition that formulary changes are made on a regular basis is illustrated by the requirement instituted 

by the Centers for Medicare and Medicaid Services (CMS) for the Medicare Part D Prescription Drug Benefit. 

As directed in the Medicare Prescription Drug Benefit Manual, Chapter 6 – Part D Drugs and Formulary 

Requirements, section 30.1.4 

The Part D sponsor’s P&T committee should meet on a regular basis, but no less than quarterly. P&T 

committee decisions regarding formulary development or revision must be documented in writing.3

AMCP appreciates the opportunity to comment on this extremely important issue. If you have any questions, 

please contact me at (703) 683-8418 or at jcahill@amcp.org. 

Sincerely, 

Judith A. Cahill 

Executive Director 

 

3

 Centers for Medicare and Medicaid Services, Medicare Prescription Drug Benefit Manual, Chapter 6, section 30.1.4. 

http://www.cms.gov/PrescriptionDrugCovContra/Downloads/Chapter6.pdf (accesssed August 1, 2010).