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[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]

  EXAMINING THE MEDICARE PART D MEDICATION THERAPY MANAGEMENT PROGRAM

=======================================================================

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 21, 2015

                               __________

                           Serial No. 114-88
                           
                           
                           
                           
     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]                      
                           
                           
                           
                           
                           
                           
                           
                           

      Printed for the use of the Committee on Energy and Commerce
                        energycommerce.house.gov

                                  ______

                         U.S. GOVERNMENT PUBLISHING OFFICE 

99-361                         WASHINGTON : 2016 
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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman
JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
  Chairman Emeritus                    Ranking Member
ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
JOSEPH R. PITTS, Pennsylvania        ELIOT L. ENGEL, New York
GREG WALDEN, Oregon                  GENE GREEN, Texas
TIM MURPHY, Pennsylvania             DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas            LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee          MICHAEL F. DOYLE, Pennsylvania
  Vice Chairman                      JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio                DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington   KATHY CASTOR, Florida
GREGG HARPER, Mississippi            JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey            JERRY McNERNEY, California
BRETT GUTHRIE, Kentucky              PETER WELCH, Vermont
PETE OLSON, Texas                    BEN RAY LUJAN, New Mexico
DAVID B. McKINLEY, West Virginia     PAUL TONKO, New York
MIKE POMPEO, Kansas                  JOHN A. YARMUTH, Kentucky
ADAM KINZINGER, Illinois             YVETTE D. CLARKE, New York
H. MORGAN GRIFFITH, Virginia         DAVID LOEBSACK, Iowa
GUS M. BILIRAKIS, Florida            KURT SCHRADER, Oregon
BILL JOHNSON, Ohio                   JOSEPH P. KENNEDY, III, 
BILLY LONG, Missouri                     Massachusetts
RENEE L. ELLMERS, North Carolina     TONY CARDENAS, California
LARRY BUCSHON, Indiana
BILL FLORES, Texas
SUSAN W. BROOKS, Indiana
MARKWAYNE MULLIN, Oklahoma
RICHARD HUDSON, North Carolina
CHRIS COLLINS, New York
KEVIN CRAMER, North Dakota
                         Subcommittee on Health

                     JOSEPH R. PITTS, Pennsylvania
                                 Chairman
BRETT GUTHRIE, Kentucky              GENE GREEN, Texas
  Vice Chairman                        Ranking Member
ED WHITFIELD, Kentucky               ELIOT L. ENGEL, New York
JOHN SHIMKUS, Illinois               LOIS CAPPS, California
TIM MURPHY, Pennsylvania             JANICE D. SCHAKOWSKY, Illinois
MICHAEL C. BURGESS, Texas            G.K. BUTTERFIELD, North Carolina
MARSHA BLACKBURN, Tennessee          KATHY CASTOR, Florida
CATHY McMORRIS RODGERS, Washington   JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey            DORIS O. MATSUI, California
H. MORGAN GRIFFITH, Virginia         BEN RAY LUJAN, New Mexico
GUS M. BILIRAKIS, Florida            KURT SCHRADER, Oregon
BILLY LONG, Missouri                 JOSEPH P. KENNEDY, III, 
RENEE L. ELLMERS, North Carolina         Massachusetts
LARRY BUCSHON, Indiana               TONY CARDENAS, California
SUSAN W. BROOKS, Indiana             FRANK PALLONE, Jr., New Jersey (ex 
CHRIS COLLINS, New York                  officio)
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)

  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Joseph R. Pitts, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................     1
    Prepared statement...........................................     2
Hon. Gene Green, a Representative in Congress from the State of 
  Texas, opening statement.......................................     2
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, prepared statement...................................   100

                               Witnesses

Tim Gronniger, Director of Delivery System Reform, Centers for 
  Medicare and Medicaid Services.................................     4
    Prepared statement...........................................     7
    Answers to submitted questions...............................   151
Lawrence Kocot, Principal and National Leader, Center for 
  Healthcare Regulatory Insight, KPMG LLP........................    35
    Prepared statement...........................................    38
    Answers to submitted questions...............................   153
Mark Merritt, President and CEO, Pharmaceutical Care Management 
  Association....................................................    54
    Prepared statement...........................................    56
    Answers to submitted questions...............................   156
Jesse McCullough, Director, Field Clinical Services, Rite Aid 
  Corporation....................................................    68
    Prepared statement...........................................    70
Richard Thomas Benson, Associate Director of Stroke, Medstar 
  Washington Hospital Center.....................................    84
    Prepared statement...........................................    86

                           Submitted Material

Materials submitted by Mr. Pitts
    Statement of the American College of Clinical Pharmacy and 
      the College of Psychiatric and Neurologic Pharmacists......   101
    Statement of the American Association of Diabetes Educators..   111
    Statement of the American Pharmacists Association............   113
    Statement of Prescriptions for a Healthy America.............   117
    Statement of the American Society of Health-System 
      Pharmacists................................................   123
    Statement of Healthcare Leadership Council...................   130
    Statement of National Community Pharmacists Association......   136
    Statement of the National Association of Chain Drug Stores...   139
    Statement of the Academy of Managed Care Pharmacy............   148
 
  EXAMINING THE MEDICARE PART D MEDICATION THERAPY MANAGEMENT PROGRAM

                              ----------                              

                      WEDNESDAY, OCTOBER 21, 2015

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:15 a.m., in 
room 2322 Rayburn House Office Building, Hon. Joe Pitts 
(chairman of the subcommittee) presiding.
    Members present: Representatives Pitts, Guthrie, Shimkus, 
Murphy, McMorris Rodgers, Lance, Griffith, Bilirakis, Long, 
Ellmers, Bucshon, Brooks, Collins, Green, Engel, Butterfield, 
Castor, Sarbanes, Matsui, Schrader, Kennedy, and Pallone (ex 
officio).
    Staff present: Clay Alspach, Chief Counsel, Health; Graham 
Pittman, Legislative Clerk; Chris Sarley, Policy Coordinator, 
Environment and Economy; Adrianna Simonelli, Legislative 
Associate, Health; Heidi Stirrup, Health Policy Coordinator; 
Tiffany Guarascio, Deputy Staff Director and Chief Health 
Advisor; Ashley Jones, Director of Communications, Member 
Services and Outreach; Rachel Pryor, Health Policy Advisor; and 
Samantha Satchell, Policy Analyst.

OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN 
         CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

    Mr. Pitts. Ladies and gentlemen, I ask all of our guests to 
please take their seats.
    It is 10:15 so the subcommittee will come to order. The 
chairman will recognize himself for an opening statement.
    Today's hearing will examine the Medication Therapy 
Management program MTM, which is part of the Medicare Part D 
prescription drug program.
    The Part D program was established as part of the Medicare 
Modernization Act, MMA, in 2003. MMA required Medicare Part D 
prescription drug plans to include Medication Therapy 
Management services delivered by a qualified healthcare 
professional, including pharmacists, beginning in 2006.
    Medications can save or improve lives, but taken 
incorrectly or in excess they can make patients worse. With 
thousands of prescription drugs on the market, frequently no 
one prescriber, caregiver or manufacturer knows the total 
picture for each patient.
    MTM services target beneficiaries who have multiple chronic 
conditions such as diabetes, asthma, hypertension, and 
congestive heart failure. Such beneficiaries likely take 
multiple medications and are likely to incur very expensive 
annual medical costs.
    The pharmacist can play an important part in MTM. We will 
be hearing from pharmacists as they describe their role and 
apply their extensive medication knowledge as medication 
experts with the intent of improving patient health outcomes.
    Medication management is vital to ensuring that covered 
Part D, or prescription drugs, are appropriately used to 
optimize therapeutic outcomes.
    As we have heard from our senior constituents, they rely on 
the Part D program and Congress has a responsibility to ensure 
that the MTM program is working as intended.
    Today we have two panels, including the administration's 
witness from the Centers for Medicare and Medicaid Services, 
CMS, the director of delivery system reform.
    Additionally, we will hear from a panel of experts and 
stakeholders as to their ideas and recommendations for possible 
improvement in this evolving program.
    [The prepared statement of Mr. Pitts follows:]

               Prepared statement of Hon. Joseph R. Pitts

    The Subcommittee will come to order.
    The Chairman will recognize himself for an opening 
statement.
    Today's hearing will examine the Medication Therapy 
Management (MTM) program, which is part of the Medicare Part D 
prescription drug program. The Part D program was established 
as part of the Medicare Modernization Act (MMA) in 2003.
    MMA required Medicare Part D prescription drug plans to 
include medication therapy management services delivered by a 
qualified healthcare professional, including pharmacists, 
beginning in 2006.
    Medications can save or improve lives, but taken 
incorrectly or in excess, they can make patients worse. With 
thousands of prescription drugs on the market, frequently no 
one prescriber, caregiver or manufacturer knows the total 
picture for each patient.
    MTM services target beneficiaries who have multiple chronic 
conditions, such as diabetes, asthma, hypertension, and 
congestive heart failure. Such beneficiaries likely take 
multiple medications and are likely to incur very expensive 
annual medical costs. The pharmacists can play an important 
part in MTM. We will be hearing from pharmacists as they 
describe their role and apply their extensive medication 
knowledge as medication experts with the intent of improving 
patient health outcomes.
    Medication management is vital to ensuring that covered 
Part D or prescription drugs are appropriately used to optimize 
therapeutic outcomes. As we have heard from our senior 
constituents, they rely on the Part D program and Congress has 
a responsibility to ensure that the MTM program is working as 
intended.
    Today we have two panels, including the Administration's 
witness from the Centers for Medicare and Medicaid Services 
(CMS), the Director of Delivery System Reform. Additionally, we 
will hear from a panel of experts and stakeholders as to their 
ideas and recommendations for possible improvement in this 
evolving program.
    I will now yield to the distinguished gentlelady from 
Washington, Rep. Cathy McMorris Rodgers.

    Mr. Pitts. Does anyone on my side of the aisle seek time? 
If not, I will yield back and now recognize the distinguished 
ranking member of the subcommittee, Mr. Green, 5 minutes for 
his opening statement.

   OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Green. Thank you, Mr. Chairman, and good morning.
    It is very real today, and thank our witness for being 
here. The costs for medication adherence include increased 
hospitalizations, doctor and emergency room visits and 
preventable disease regression.
    Studies have shown that these add up to costs to the health 
care system of an estimated $290 billion each year. When 
patients adhere to their medications, the data demonstrates 
that they are much more likely to have improved health 
outcomes, use fewer health care services such as ER visits and 
rehospitalizations.
    This is particularly true for patients with one or multiple 
chronic conditions, as medications are involved in 80 percent 
of all treatments for chronic disease interventions.
    Proper medication adherence leads to improved health care 
outcomes and better disease management. The avoidance of 
dangerous and costly complications later on is advantageous to 
the Medicare program at large through decreased medical 
spending.
    Recognizing the value of proper medication adherence, 
Congress created Medication Therapy Management, MTM, program as 
part of the Medicare Modernization Act of 2003. The MTM program 
was intended to better integrate medication management services 
to the Medicare Part D program.
    Specifically, the goal of MTM is to ensure that covered 
Part D--the drugs--are appropriately used to maximize their 
therapeutic benefits for Medicare beneficiaries enrolled in 
stand alone prescription drug plans and Medicare Advantage 
prescription drug plans.
    However, it is widely recognized that the Part D MTM 
program is not meeting its full potential and reforms are 
needed so that seniors can better access these important 
services.
    Current statute of regulatory requirements for MTM require 
services offered based on fairly rigid criteria, which has led 
to mismatched enrollment and beneficiaries who will likely 
benefit from the MTM programs being missed.
    MTM restrictions require that in order for a Medicare Part 
D beneficiary to be eligible for MTM they must have multiple 
chronic conditions, be prescribed multiple medications or meet 
an annual cost threshold for prescription drug spending.
    These prescriptive criteria seem like an oversimplification 
of patients who may benefit from MTM services and have been 
cited as a contributing factor to low MTM participation.
    Another factor that may be contributing to low 
participation is that the program requires cooperation among 
several groups, some of which may have competing interests. It 
is time to look for ways to effectively target seniors who 
would greatly benefit from the medication management services 
and realign incentives so that the benefits to patients in the 
health care system can be fully realized.
    Last month, the Center for Medicare and Medicaid Services 
announced a model test of strategies to improve medical 
medication adherence among beneficiaries who are enrolled in 
Part D plans by expanding and improving the use of MTM.
    This model will run out of the CMS's Center for Medicare 
and Medicaid Intervention which was created by the Affordable 
Care Act. The enhanced MTM model will assess whether providing 
stand alone Medicare prescription drug plans with additional 
flexibility and alternative payment methods increase enrollment 
and better achieve Congress' vision for the MTM programs.
    I recognize and appreciate CMS for its agency's efforts to 
improvement to the program throughout its history and for 
piloting the enhanced MTM model.
    However, demonstration projects are naturally limited in 
scope and we won't have full results until 2022. Participation 
remains very low and, according to CMS, more than 25 percent of 
the enrollees would benefit from MTM services.
    I look forward to working with my colleagues on appropriate 
legislative solutions to reform the Part D MTM program to 
provide the completion of the demonstration project.
    I thank you and I yield the balance of my time to my 
colleague from California, Congresswoman Matsui.
    Ms. Matsui. Thank you so much and thank you, Mr. Chairman, 
for holding this important hearing today on the topic of 
medication therapy management, or MTM.
    MTM helps seniors take their medications safely, correctly 
and increases their adherence. It is an important tool that has 
been shown to save the system money.
    If people, especially seniors, had the proper training and 
education about how, why, and when to take their medications, 
their conditions don't end up untreated, saving unnecessary 
hospital visits and other complications.
    Not only does this save the system money but it truly 
benefits the senior, especially those with multiple chronic 
conditions who may be filling up to 50 different prescriptions 
per year.
    It is important that we ensure that seniors have access to 
MTM within the Medicare program and I look forward to hearing 
from our witnesses today about we are ensuring that that 
happens.
    Thank you, and I yield back.
    Mr. Pitts. The chair thanks the gentlelady.
    As usual, the written opening statements of the members 
will be made a part of the record. We have another hearing in 
Energy and Commerce going on downstairs so members will be 
shuttling back and forth.
    On the first panel we have Mr. Tim Gronniger, director of 
Delivery System Reform Centers for Medicare and Medicaid 
Services.
    Your written testimony will be made a part of the record. 
We would ask you to take 5 minutes to summarize your testimony 
and then we will do questions.
    So at this point, Mr. Gronniger, you are recognized 5 
minutes for your summary.

STATEMENT OF TIM GRONNIGER, DIRECTOR OF DELIVERY SYSTEM REFORM, 
           CENTERS FOR MEDICARE AND MEDICAID SERVICES

    Mr. Gronniger. Thank you.
    Good morning, Chairman Pitts, Ranking Member Green and 
members of the subcommittee. Thank you for the invitation and 
opportunity to discuss CMS's new Part D enhancement Medication 
Therapy Management model, or enhanced MTM model.
    We appreciate your continued interest in improving Medicare 
beneficiaries' access to quality, affordable and well-
coordinated health care.
    MTM, when implemented effectively, can improve health care 
quality and outcomes for patients and has the potential to 
lower health care costs by helping to address medication-
related issues such as risk of side effects, gaps in adherence 
to therapy, duplicative therapies, and other issues that could 
jeopardize patient health and lead to unnecessary risks.
    MTM and Medicare is a plan-based set of services that tries 
to improve health outcomes by ensuring that patients are taking 
their medications safely and as prescribed, by addressing any 
barriers to their doing so and by bringing any issues to the 
attention of treating clinicians.
    For a variety of reasons, CMS believes that the true 
benefits of MTM programs have not been realized yet in 
Medicare.
    While CMS has made changes to MTM programs over the last 
decade and in consultation with stakeholders, participation in 
such programs remains very low with only about 11 percent of 
beneficiaries enrolled in MTM programs today.
    Performance data and our interviews with industry experts 
suggest that misaligned incentives have led Part D plans to 
focus on meeting minimum technical requirements rather than 
trying to identify opportunities to improve the health of 
Medicare beneficiaries.
    Specific concerns include that plan sponsors are not 
rewarded for improvements in the quality of care received 
through MTM programs.
    Plan sponsors cannot receive any benefit from reductions in 
spending in Parts A and B of Medicare so their interests are 
not entirely financially aligned with those of the Medicare 
program or beneficiaries.
    And compounding that, competitive pressure to keep premiums 
low to attract enrollment means that investment in MTM services 
comes at a competitive cost without any financial gain.
    Despite these obstacles, we believe that Part D needs a 
strong MTM program because there are a number of barriers that 
can prevent beneficiaries from taking their medications safely 
and as prescribed.
    For example, some beneficiaries have difficulty with 
forgetfulness and memory issues, the physical taking of pills 
and opening pill bottles, the cost of cost sharing for 
medications prescribed by multiple prescribers without a 
coordinated process to reconcile those prescriptions.
    Pharmacists, Part D sponsors, and other experts have 
identified many ways that MTM programs can be improved if we 
align incentives and provide flexibility in program design. 
Opportunities include improved patient education, medication 
reconciliation, reminder programs in packaging, refill 
synchronization, and risk-based targeted interventions with 
beneficiaries and prescribes.
    Industry experts suggested that more targeted and 
differentiated interventions to help patients understand their 
medications on a more frequent basis are required--smaller 
bytes of information at learning points such as care 
transitions, starts of new medication and around annual 
wellness visits, for example.
    A few notes on the model itself--through this project, CMS 
will test whether providing Part D plans with regulatory 
flexibilities, aligned financial incentives and access to 
Medicare claims data will better achieve Medicare's original 
vision for MTM programs.
    The enhanced MTM model will incentivize plans to right size 
their investment in MTM services by expanding enrollment and 
improving the coordination of care experienced by 
beneficiaries.
    Key elements of the model include the ability to offer 
different MTM services to individuals based on their level of 
medication-related risk with interventions tailored to those 
enrollees' specific barriers to improvement, including cost 
sharing assistance to beneficiaries who need it, prospective 
payments to support more extensive MTM interventions that will 
be outside of a planned annual Part D bid and premium.
    The model also includes the opportunity for plans to 
qualify for a performance-based payment in the form of an 
increased premium subsidy for plans that successfully reduced 
medical spending in Parts A and B of Medicare.
    The ability to access Parts A and B claims data from CMS 
will also support plan participants by helping to identify and 
coordinate care for individuals enrolled in the MTM models.
    A couple of notes on pharmacy and pharmacists' role in the 
program. This model provides potential opportunity for plans to 
invest in pharmacist-based MTM programs at the local level for 
the opportunity for direct beneficiary engagement is greatest.
    Pharmacists might be well positioned to identify candidate 
beneficiaries starting new medications with risky side effect 
profiles, to help patients receiving medication assistance 
devices such as pill splitters or mobile phone reminder apps, 
synchronized refills to provide home delivery and cost sharing 
assistance and to provide counseling advice tailored to the 
patient's needs and situation.
    In conclusion, CMS believes that the enhanced MTM model 
will give prescription drug plans stronger incentives and 
flexibility to improve prescription drug safety and 
effectiveness working with beneficiaries, pharmacists, and 
prescribers.
    CMS looks forward to working with these and other 
stakeholders in the coming months and years to learn more about 
ways to maximize the benefits of MTM to promote better care, 
smarter spending, and better health for Medicare beneficiaries.
    I thank the subcommittee for the opportunity to share our 
plans for this important demonstration and would be happy to 
answer any questions that you may have on the model.
    [The prepared statement of Mr. Gronniger follows:]
   
   
  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 
    
    Mr. Pitts. The chair thanks the gentleman. Again, thank you 
for coming. Thank you for your testimony. I will begin the 
questioning, recognize myself for 5 minutes for that purpose.
    Mr. Gronniger, can you provide a range of how many plans 
you expect to participate in the innovation model from the five 
Part D regions selected for inclusion?
    Mr. Gronniger. We haven't identified a cap or a limit on 
participation in the model. That model is open to any plans 
that would like to participate and can submit qualifying 
applications.
    In the five regions that are selected there are about 13 to 
15 plans in each region. So that would be the maximum and we 
will be identifying and evaluating applications and so we will 
find out the number of applications as we go through that 
process.
    Mr. Pitts. It is my understanding that the regions chosen 
for participation were evaluated on a number of criteria, such 
as variation in market competition and range of Parts A and B 
spending.
    Can you provide any more insight into how these regions 
were selected?
    Mr. Gronniger. Yes, sir.
    In designing all of the innovation center models including 
this one, we look to make sure that we have sufficient number 
of participants to power the evaluation design and in this case 
we needed about that many regions to get an appropriate number 
of beneficiaries and plans participating.
    As I mentioned, we hope that all or most plans in those 
regions will submit good applications. We wanted to make sure 
that the participants were representative of the national 
market as a whole as well as being able to identify areas with 
higher and lower Medicare spending that had different types of 
areas of the country whether rural or urban to make sure that 
the evaluation could identify a nationally representative 
result.
    Mr. Pitts. Can you briefly summarize how the innovation 
model will work to realign financial incentives and regulatory 
constraints that PDPs currently face when trying to implement 
meaningful MTM programs?
    Mr. Gronniger. Yes, sir.
    Today, Part D plans offering MTM programs are required to 
offer a certain set of services and are required to define a 
minimum number of patients who are eligible for these programs 
based on criteria such as how many chronic conditions a patient 
has, how many drugs the patient is taking and expected spending 
for the course of a year.
    We know that more than 11 percent of Medicare beneficiaries 
can benefit from MTM programs. Previous work by CMS and other 
experts suggest that 25 percent or even more could benefit from 
these programs and we also know that there are certain 
beneficiaries who fall under those criteria who could benefit 
from interventions.
    Patients who are taking drugs such as blood thinners that 
are unusually risky even if it is the only drug that they are 
taking can benefit from counseling and management of those 
therapies.
    So we are providing in this model the flexibility to use a 
risk-based approach to identify beneficiaries who need the 
project, who need the intervention the most, identify 
interventions that will support that patient's care needs in 
collaboration, potentially, with pharmacists, with the 
patient's physicians and will provide a more comprehensive set 
of interventions that can support care improvement.
    For the alignment on incentives, never before has a Part D 
model provided an incentive for Part D plans to manage or 
contribute to managing the overall cost and quality of care for 
patients.
    So this will allow Part D plans to benefit if they are able 
to lower overall medical spending directly by receiving a $2 
premium reduction later on in the model. That will provide 
competitive benefits if they are able to measure the effects of 
this program.
    Mr. Pitts. Cost sharing assistance for financially needy 
enrollees is referenced as ``enhanced and individualized MTM 
strategy'' in the announcement from CMS on the MTM innovation 
model.
    Will the individual PDPs or CMS be defining who is 
financially needy?
    Mr. Gronniger. So that is a good question. Thank you, sir.
    We are asking for plans to provide us ideas on the right 
types of interventions that are needed here and so we are 
hoping to see a diversity of programs created and identified.
    If they choose to take advantage of this option, then they 
will need to submit a detailed plan around what types of 
interventions and what types of medications and what situations 
would give rise to offering cost sharing assistance.
    If a patient tells a plan that cost sharing is an 
impediment to accessing needed therapy, then that is the type 
of situation that this model is intended to allow the MTM 
program to identify. We are not intending that plans would get 
deep into income determination.
    Mr. Pitts. And you will be defining what cost sharing 
assistance entails?
    Mr. Gronniger. We will be evaluating proposals from plans 
and working with them on the right parameters for that type of 
assistance.
    Mr. Pitts. And can we expect this will be elaborated on in 
the request for applicants?
    Mr. Gronniger. The request for applications will include 
what the plans need to submit to us and we will then take those 
applications and work with plans to make sure that it is the 
intervention that makes sense.
    Mr. Pitts. Thank you. My time has expired.
    The chair recognizes the ranking member, Mr. Green, 5 
minutes for questions.
    Mr. Green. One of the great successes of the Affordable 
Care Act is that it not only provided lifesaving health 
insurance coverage to millions of Americans but it also changed 
the way we pay for health care.
    The ACA has indisputably put our healthcare system on the 
path toward one that reimburses for value instead of volume. 
Patients now have the option to be cared for in a more 
integrated system such as accountable care organizations and 
patient-centered medical homes.
    Mr. Gronniger, in your testimony you wrote that the 
enhanced MTM model will be complementary rather than 
duplicative of the ACOs and other integrative care models.
    Can you elaborate on that interaction?
    Mr. Gronniger. Yes. Thank you, sir.
    So for most ACOs, the number of prescription drug plans 
that are providing drug benefits for their aligned populations 
could be anywhere from 15 to 20 or 30 plans and those plans are 
often in a better position to understand the scope of the 
patient's medication-related issues and needs because they have 
access to the full set of data or nearly the full set of data 
on the drugs that that patient is using.
    Today, though, as we have discussed, there isn't a strong 
incentive for plans to engage with ACOs or other physicians who 
are managing the care of their patients overall. And so that 
physician may not be able to see the full picture that they 
need to see of the medications that the patient is taking.
    This model will create the opportunity for a pathway that 
plans can invest in MTM services that could include linkages 
with physician groups to provide better information to the 
physician managing the patient's medications and overall care 
and so enhance the work of an ACO or other alternative payment 
model.
    Mr. Green. Is it fair to say that an enhanced MTM model has 
the potential to not only work alongside newer patient-centered 
medical care models but actually have a multiplying effect on 
the benefits that the patients may receive?
    Mr. Gronniger. Yes, sir.
    We think that there are numerous opportunities for these 
programs to support the care management activities that ACOs 
and other physician organizations are trying to promote to 
improve the quality of care that their patients are 
experiencing.
    Mr. Green. I want to thank you for your work on the MTM 
program. I believe the enhanced MTM model is an excellent step 
and I am happy that CMS has dedicated the time and effort to 
thoughtfully improve the important beneficiary services.
    On the other hand, one of the drawbacks of any 
demonstration project is it is by nature limited in scope and 
will only have results until 2022.
    Are these specific aspects of the Medication Therapy 
Management program would benefit from change prior to the 
completion of the enhanced medication therapy model?
    Mr. Gronniger. We are in the process of standing up the 
model right now so we are still working on the front end part 
of getting plans to apply and to getting the process stood up 
for 2017.
    We allowed 5 years for the model to work and to provide 
adequate time for evaluation because we heard that these types 
of interventions there needs to be a lot of experimentation.
    It is going to take a process of refinement. Plan 
participants can also propose updates to their programs on an 
annual basis that we will discuss with them.
    I would also emphasize that even though the model is slated 
to run for 5 years we will be evaluating it on an annual basis. 
And so we will have the opportunities to engage with you as 
well as to make any needed course corrections in the interim.
    Mr. Green. But during that 5-year period if you have some 
type of real success you could actually put those in place even 
before the 2022?
    Mr. Gronniger. If the data is strong enough and if we are 
able to demonstrate improvements in quality then there would be 
opportunity for extension earlier than 2022, yes.
    Mr. Green. Procedures choosing Part D plans transparency 
and ease of understanding are critical to ensure every 
beneficiary selects the plan that is most appropriate for that 
individual.
    One component, I believe, that has been very helpful in 
this regard is the use of star ratings in the Part D program. 
Can you discuss why CMS decided to add a comprehensive 
medication reviews to the star rating measurement beginning 
next year?
    Mr. Gronniger. Yes.
    So we are constantly looking at improving our quality 
rating systems and our quality performance systems. We have had 
the star program in Part D for a number of years now.
    We have also been aware of issues and we have worked over 
the years to try to improve enrollment in and to scope of the 
MTM program.
    And one opportunity for that was to promote the use and 
adoption of comprehensive medication reconciliation under the 
existing MTM program and we thought that by including a star 
rating on that that would provide some incentive for plans to 
improve.
    And that is work that we still feel is important. We think 
that CMRs are something that is valuable for beneficiaries and 
that will be happening across the country and supporting 
improvement in plans that are not in this intervention.
    Mr. Green. Thank you, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentleman.
    I now recognize the gentleman from Illinois, Mr. Shimkus, 5 
minutes for questions.
    Mr. Shimkus. Thank you, Mr. Chairman.
    I am glad I follow my friend from Texas because he had to 
put in his little plug for the ACA.
    [Laughter.]
    Well, the plug I have is it look likes it is going to be 10 
million under enrolled and that most people I talk to are 
paying more and getting less coverage. So a little tit for tat 
just to show that there is differing views on that piece of 
legislation.
    But that is not what we are here to talk about so we are 
glad to have you here.
    So I come from a very large district in southern Illinois--
33 counties. Many of my seniors, most in need, the pharmacist 
might be the only health care provider that they have 
consistent access to in this area that we are talking about 
today.
    As a result, they are visiting their pharmacist and the 
pharmacist can start asking them because they look maybe 
jaundiced a little bit when they come in or then they can start 
asking these questions.
    So in this process I am kind of excited about this but, of 
course, we will make sure that the pharmacy community, 
especially the independents and some of the chains, they are 
involved in this process.
    Do you track and have evidence showing how this 
relationship translates when it comes to outcomes and emergency 
room usage and hospital utilizations in rural and underserved 
areas?
    So the thing we have is this cost benefit analysis, right? 
So if we are going to move to this new model, if they are able 
to identify stuff through the management practices are you 
trying to track the savings on the back end?
    Mr. Gronniger. Yes.
    Yes and yes. We are very attentive to the issues facing 
rural communities and difficulties accessing providers and 
traveling long distances.
    We have also heard from many community pharmacists that the 
current MTM program really doesn't touch them very often and we 
think that that is largely a result of the misaligned 
incentives and regulatory barriers that we have discussed.
    We are hopeful that this will provide a pathway for 
investment in some of those services that can be delivered 
often by local community pharmacists, potentially by others.
    Today, a lot of MTM programs are provided by national or 
regional contractors and many of them are very competent and 
capable and also able to engage with local pharmacists. But 
because there is not a strong incentive to invest, we think 
that they are mostly in the cost minimization approach rather 
than recognizing the full potential here.
    So yes, we think that this will create an opportunity for 
support of that and we will also be tracking on a granular 
level sort of the intervention by intervention where what is 
happening in this program and where there are benefits being 
provided.
    Mr. Shimkus. Yes, so we want to make sure you remember the 
rural and the underserved areas. Sometimes they are the same 
but sometimes underserved areas could be in some metropolitan 
areas too where there is, we call those deserts for food and 
nutrition but I think that is true in some of the health care 
delivery issues, also.
    You mentioned that current MTM statutory and regulatory 
provision limitations may lead to some beneficiaries who don't 
benefit from MTM being included in the programs while missing 
some of the beneficiaries who would benefit from the MTM 
programs.
    Can you give us some more specifics on what changes you 
think might be needed to include more people that could benefit 
from the program and removing those who don't benefit from the 
program?
    Mr. Gronniger. Sure.
    So, for example, we talked about the need for a cost 
threshold and the minimum number of chronic conditions to 
qualify for MTM programs today.
    We know that diabetic patients often take drugs that are 
risky and can result in hospitalizations and other adverse 
events if they aren't managed well.
    Today, being diagnosed as a diabetic alone doesn't qualify 
you for an MTM program. Under this program, the plan sponsor 
and participant would be able to suggest risk-based 
intervention such as even just one condition such as diabetes 
that could qualify a patient for counseling or other types of 
MTM interventions.
    Mr. Shimkus. And in my remaining time, you state that CMS 
believes pharmacists serve a vital role in ensuring that 
Medicare beneficiaries receive and properly use prescription 
drugs upon which they rely.
    Can you tell us how we have seen that role increase and 
evolve over time with the implementation of Part D?
    Mr. Gronniger. Yes.
    We talked to a lot of pharmacy groups and pharmacists and I 
think that it is fair to say that many of these organizations 
view themselves, as you mentioned, as part of the health care 
continuum and want to provide more support for their patients 
than merely filling a script and we think that this model is an 
opportunity to support that work.
    Mr. Shimkus. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Pitts. Chair thanks the gentleman and now I will 
recognize the gentlelady from Florida, Ms. Castor, 5 minutes 
for questions.
    Ms. Castor. Thank you, Mr. Chairman, for calling the 
hearing today.
    Mr. Gronniger, I am pleased to see that CMS is working to 
improve the Medication Therapy Management program through the 
enhanced MTM model.
    The efficiencies that can be achieved haven't been 
maximized over the past few years and this definitely is a step 
in the right direction.
    I have a question regarding what the model will look like 
from the patient's perspective. At first glance, most of the 
provisions of the medication therapy management model appear to 
target the insurer rather than the patient.
    I understand the rationale behind the restrictions on 
direct marketing. But I am wondering if Medicare beneficiaries 
understand what the MTM is when it is offered to them.
    Personally, I wonder if beneficiaries are naturally 
skeptical when an insurance company says here, we have 
additional services for you. Given that, historically, there 
has been a very low participation in the MTM program.
    Has CMS considered undertaking any actions to improve 
beneficiary awareness and engagement?
    Mr. Gronniger. Yes.
    So we have historically included language in the Medicare & 
You Handbook that is mailed out every year as well as on 
Medicare.gov to explain what MTM programs are in case patients 
are contacted by their insurer.
    We also encourage beneficiaries if they think they could 
benefit from these types of services to contact their Part D 
plan directly.
    And this model, because the interventions are going to be 
very tailored and sometimes may operate at first in the 
background of the beneficiary and the beneficiary will not know 
beforehand whether they will qualify under the plan's tailored 
intervention, we are not going to be doing prospective outreach 
from CMS on this other than providing, again, language 
explaining what the project is and making sure that we are able 
to direct people to the right source to answer questions.
    We think, though, that part of the reason for low 
enrollment in the past is that plans have the ability to engage 
with beneficiaries as well as through trusted intermediaries 
like pharmacists and physicians.
    And so we think that there are multiple ways that further 
engagement could--further engagement with those stakeholders 
and those providers can support better enrollment in the 
program.
    Ms. Castor. Does it make sense to tackle some of the more 
expensive chronic conditions, for example, diabetes? Do you 
have something that is targeted to certain populations like 
that?
    Mr. Gronniger. We have seen diabetes as the most targeted 
chronic condition in MTM services today and we expect that it 
will probably continue to be one of the most targeted.
    We have heard that chronic conditions that are very reliant 
on medication therapy, such as chronic obstructive pulmonary 
disorder--congestive heart failure--are likely to be candidates 
for intervention.
    But we are not prescribing that beforehand. We want to see 
a diversity in innovation and the offerings from plans here and 
then we will hopefully be able to learn what works.
    Ms. Castor. OK. Thank you for your work on it and we will 
look forward to a report back that you have achieved greater 
efficiencies in the MTM.
    Thank you.
    Mr. Pitts. Chair thanks the gentlelady and I recognize the 
gentleman from Pennsylvania, Dr. Murphy, 5 minutes for 
questions.
    Dr. Murphy. Thank you for being here today. This is very 
informative.
    Can you just help me understand the difference between a 
model test versus a demonstration?
    Mr. Gronniger. So I think in this case there is not an 
important difference. This is a model test. I think it is a 
difference between statutory and common language.
    So this is a demonstration project being tested under the 
innovation center's authority.
    Dr. Murphy. So there is not, for example, statutory 
authority for a model test. Is that what you are saying?
    Mr. Gronniger. We can get back to you on the exact wording 
of how this works in the statute. But, yes, this is operated 
under the innovation center's authority to test models.
    Dr. Murphy. OK. Thank you.
    So in the announcement for the MTM innovation model you say 
that one of CMS's research questions--what is the impact on 
patient outcomes and satisfaction--how are you measuring and 
what are you using to measure patient satisfaction and outcome?
    Mr. Gronniger. So we are going to be conducting beneficiary 
surveys to understand how this program is experienced by 
involved beneficiaries to CFA, both if they like the program, 
if they have appreciated the services available, if they felt 
that it has improved to a better understanding of their 
medication.
    We are going to be working with experts, with pharmacists 
and plans and physician organizations to define the right 
quality measures for the program.
    There aren't a consensus set of quality measures right now 
for MTM services. So we are going to have to work with others 
to build them.
    Dr. Murphy. So for example, we have been talking about 
diabetes here as one example in chronic illness. Do you have 
any kind of questions or areas at least you are thinking of in 
a direction with that yet?
    Mr. Gronniger. We don't have any quality measures for MTM 
specific to diabetes that we are envisioning and these are 
draft.
    But we put it out in our announcement to plans, things like 
medication-related problems identified and resolved would be 
the type of quality measures.
    Dr. Murphy. So side effects, et cetera?
    Mr. Gronniger. Yes.
    Dr. Murphy. So there has been a number of studies, for 
example, that have identified people with chronic illness, such 
as diabetes, heart disease, et cetera, have a much higher risk 
of depression, like, double the rate.
    When you have untreated depression and a chronic illness, 
the cost doubled, for multiple reasons, some of them actually 
primary neurological and how the body no longer fights--it 
doesn't have the same immune levels, exacerbation of illness, 
et cetera.
    But crossing over from that, for example, with diabetes, 
cardiovascular disease, et cetera, persons with severe mental 
illness have a much higher risk of those not only primarily 
because they perhaps are not caring for themselves as well, 
they don't keep appointments, they may fear the doctors because 
of hallucinations, delusions, et cetera, but also when they are 
taking a second generation anti-psychotic, for example, higher 
risk for diabetes, higher risk for cardiovascular disease--I 
think type 2 diabetes is one and so it is extremely important.
    When I have seen studies where, for example, Jewish 
Healthcare Foundation in Pittsburgh, is monitoring folks. They 
screen them at the same time for depression when they are 
diabetic or heart disease.
    They intervene quickly and they actually find that overall 
costs go down and they can use less medications to treat.
    So I hope you will use a broader, coordinated and 
integrated care model to look at and not just do you have 
symptoms of side effects or not. But are those being addressed 
in a more global perspective and a multi disciplinary way to 
try and address these issues.
    It is one of those things that--and I know Medicare is 
moving towards, in some way, with this integrative model can be 
extremely important in addressing those. But if we don't ask 
those, it is a problem.
    The second issue I want to get into is pain management. 
Some have said the elderly, actually, is underserved in terms 
of managing pain.
    But the other issue is oftentimes the way you can quiet 
someone down is just give them some opiates for their pain, and 
then we run higher risks of addiction issues.
    Not from someone who has set out to be a drug addict but we 
give them so much opiates that they end up having an addiction 
to that.
    Is that something you will also be monitoring in terms of 
how pain is managed and other sensitivity to opiates?
    Mr. Gronniger. Yes, and so first, I would say I appreciate 
your comments and suggestions for managing mental health 
medications and their interactions with other chronic diseases 
and we will take that back. I think they were great 
suggestions.
    For opiates and other pain medications, we think that that 
is one area that applicants might want to target for the 
reasons you identify.
    MTM programs also attempt to look at the over the counter 
medications that patients are taking, and particularly for 
acetaminophen, can be a really bad interaction problem----
    Dr. Murphy. OK.
    Mr. Gronniger [continuing]. For opiates. And so we think 
that there are opportunities there to improve care and avoid 
risks and we hope that plans will take advantage of that.
    Dr. Murphy. Let me suggest something too, and pharmacists 
can be helpful--with the Affordable Care Act, there is at least 
3 questions that are asked as someone is discharged. Like, for 
an emergency room, you have to fill out surveys, at least 3 
questions that deal with pain.
    And since hospitals are finding themselves scored on this, 
I think there is almost an incentive for them to hand out more 
pain medication because it affects how much they are going to 
get paid.
    And then without follow-up--this committee has done a lot 
of work on looking at substance abuse and addictions issues and 
I hope you look at that whole picture of things.
    But thank you so much for your focus on this. This could be 
innovative. Appreciate that.
    I yield back.
    Mr. Pitts. Chair thanks the gentleman and now recognizes 
the gentlelady from California, Ms. Matsui, 5 minutes for 
questions.
    Ms. Matsui. Thank you, Mr. Chairman.
    Traditionally, patients have been eligible for MTM services 
if they meet fairly rigid criteria regarding either the number 
of prescriptions utilized, the number of chronic diseases or 
the total amount of prescription drug spending. However, there 
seems to be an oversimplification of patients that may benefit 
from MTM services.
    Mr. Gronniger, in the past, CMS has recommended that Part D 
plans offer MTM services to additional patient groups beyond 
the baseline requirements, and we have already talked about 
patients at high risk for opiate abuse.
    Are there other groups of patients that are under 
represented in the MTM programs?
    Mr. Gronniger. Yes.
    I think it is probably fair to say because of the low 
enrollment we think that the patients overall are under 
represented in the programs and we think that there are a 
multitude of condition-specific opportunities available here, 
including in areas where there is already investment in 
diabetes and congestive heart failure.
    So we think that there are going to be a wide range of 
opportunities. Congressman Murphy just mentioned a couple of 
good ones as well.
    So I think yes and I think we are going to probably have a 
large amount of good ideas on the table as we go through the 
applications.
    Ms. Matsui. I would also consider too that there are 
different populations involved here, which might cause some 
concern amongst some patients as to communication, and I was 
wondering whether that is a consideration also. I am looking at 
California a large diversity, different ethnic populations.
    Has there been consideration in that regard?
    Mr. Gronniger. Yes.
    So I think inherent to any successful project and 
application and intervention here is going to be an ability to 
engage with beneficiaries to help them understand the 
medications that they are taking.
    And so plans are going to have to look closely at their 
enrollees to understand what they need to be successful, to 
communicate with them.
    Whether it is working with the pharmacists in their 
neighborhood or whether it is something based out of a 
physician office or some other organization that can reach 
beneficiaries who need to--who can understand their medications 
better. I think that that will have to be a part of these 
models.
    Ms. Matsui. OK. Thank you.
    I noticed in the new model at CMMI that there is a 
particular emphasis on risk-based interventions. Can you speak 
to how a risk-based approach in MTM might improve outcomes?
    Mr. Gronniger. Yes, and it gets to the flexibilities and 
incentives that you mentioned earlier. We think that the intent 
of the statute and the regulations to say the MTM services, we 
know, aren't for everybody so we need to limit them to 
individuals with multiple chronic conditions and with spending 
expected to exceed a threshold would make sense on some levels 
and that we know that it is not for everybody.
    However, we know that there are individuals who don't reach 
those thresholds who can benefit like individuals on blood 
thinners, medications that can have fatal consequences if not 
managed appropriately.
    Even if it is the only drug that that patient is taking 
they wouldn't qualify for MTM under the current programs. So we 
think that that is an example of an area where we are providing 
the ability to reach beyond the current thresholds.
    Ms. Matsui. OK. Well, thank you very much, and I yield 
back.
    Mr. Pitts. Chair thanks the gentlelady and now recognizes 
the gentleman from New York, Mr. Collins, 5 minutes for 
questions.
    Mr. Collins. Thank you, Mr. Chairman, and thank you, Mr. 
Gronniger, for your testimony.
    Obviously, from the questions and the tone we are just all 
trying to better understand what is going on and, clearly, 
looking out for patient safety and costs at the same time are 
admirable goals and I think all of us can agree that is a good 
thing.
    So just, really, a couple of questions as I have heard some 
of the testimony. Am I correct that the MTM program--a 
beneficiary has to agree with their provider to enter their 
program?
    Mr. Gronniger. So beneficiaries can opt out of the program 
at any time and they will be contacted by the plan, generally, 
speaking, and it will depend on the intervention and it will 
require some work with the plans to identify exactly the type 
of intervention for the right type of patient. Sometimes it 
might be something as simple as an extra communication at the 
pharmacist level.
    So they might not feel like they are enrolled in anything 
but plan patients will have the opportunity to opt out at any 
time.
    Mr. Collins. But why would a patient opt out? If we are 
looking after their health to make sure they are not taking 
drugs that could interfere, et cetera, and putting aside the 
cost factor, why would a beneficiary opt out?
    Mr. Gronniger. I would think that beneficiaries wouldn't 
and shouldn't and I wouldn't recommend to any of my relatives 
to opt out.
    It is possible that some beneficiaries don't find the 
current program where they do an interview, a comprehensive 
medication review with, say, a pharmacist and they have to 
spend 45 minutes talking to that person, some people find that 
an imposition.
    And so under the current program, some patients opt out. We 
think that under a better designed program many fewer would 
agree to participate.
    Mr. Collins. Is there anything that would--clearly, I am 
assuming the cost benefit which accrues to both the government 
and the carriers but also information that would be available 
to patients if they tried to opt out that they might get 
something that would say, you should rethink this. Does that 
type of thing happen or if somebody opts out they just opt out?
    Mr. Gronniger. We are going to have to figure that one out 
as we get the specific projects proposed by plan sponsors. And 
that will include discussion of how the communications work 
with beneficiaries.
    We think that a well designed program should be sort of 
self-evidentially beneficial to beneficiaries.
    Mr. Collins. Right, I agree. So----
    Mr. Gronniger. And so we hope that that is what we will see 
and that we will see much lower rates of opt out. Only about 1 
percent of beneficiaries in all of Part D receive comprehensive 
medication reviews. Right now, we would expect that use of the 
interventions in this program would exceed that in these 
regions.
    Mr. Collins. So now, as you bring this forward, I represent 
the very rural area of eight counties and 105 towns in western 
New York.
    We have an extraordinarily high enrollment in Medicare 
Advantage. It has just been adopted in our area probably, like, 
no other. Now, am I correct that the MTM program does not apply 
to Medicare Advantage plans?
    Mr. Gronniger. Yes, that is right, sir.
    Mr. Collins. And why would that be?
    Mr. Gronniger. So one of the reasons that we are pursuing 
this project is that we recognize that the incentives for Part 
D plans are different from Medicare Advantage plans.
    Medicare Advantage plans have responsibility for the total 
Medicare benefit Parts A, B and D. Part D plans only have 
responsibility for the drug part of the benefit. So they have a 
different financial perspective on this than anybody.
    Mr. Collins. So the assumption would be someone in Medicare 
Advantage, those providers are already looking at the 
interaction of A, B and D and should already be doing this? Is 
that the idea?
    Mr. Gronniger. We aren't assuming that and, in fact, we 
have data suggesting that there are issues in Medicare 
Advantage as well. So we aren't saying that this isn't 
something that could benefit Medicare Advantage patients.
    But as a first step and a first evaluation, we think this 
is where we have the greatest needs. We would look at whether 
we should expand it to Medicare Advantage in the future.
    Mr. Collins. So that also begs the next question on 
Medicaid. You would certainly have individuals in Medicaid that 
have the comorbidities as well as cost and so forth.
    Is there any thought that this MTM program should also move 
into the Medicaid world?
    Mr. Gronniger. It is a good question.
    I think that some of the evidence that we have seen 
supporting the use of Medication Therapy Measurement programs 
has come from the Medicaid world.
    States have the ability to offer this service under 
Medicaid today and I would be happy to talk further about 
whether it makes sense to try to expand that.
     Mr. Collins. And is this a 7-year program, as I understand 
it, this pilot?
    Mr. Gronniger. It is a 5-year intervention with an extra 2 
years run out to provide the premium subsidy for plans that 
perform well in the fifth year.
    Mr. Collins. OK. Well, again, my time has expired. Thank 
you for that testimony.
    Mr. Chairman, I yield back.
    Mr. Pitts. Chair thanks the gentleman.
    I now recognize the gentleman from Oregon, Dr. Schrader, 5 
minutes for questions.
    Mr. Schrader. Thank you, Mr. Chairman.
    I appreciate you being here, Mr. Gronniger.
    I would like to follow up a little bit on the Medicare 
Advantage piece and it is a big part of prescription drug 
delivery in my part of the world and patently very successful 
by all accounts.
    Wondered if you could elaborate what time frame might there 
be an opportunity for Medicare Advantage to also have the same 
incentives.
    It seems smart to line all prescription drug plans 
incentives along the same lines. Everyone is playing from the 
same deck of cards and wondered when that might happen.
    Mr. Gronniger. Sure. So Medicare Advantage prescription 
drugs plans today are required to offer the same set of MTM 
services and interventions that stand alone Part D plans are. 
So Medicare Advantage plans do offer the currently existing set 
of services that we have been trying to improve over the last 
10 years.
    This model has focused on Part D stand alone plans because 
of the misalignment of financial incentives is greatest there 
and we think that the greatest opportunity to demonstrate the 
benefit of the program are the largest in the shortest amount 
of time there.
    We don't have plans to expand it to Medicare Advantage 
right now but it is something I would be happy to talk with you 
and others about over the coming months and year.
    Mr. Schrader. I appreciate that, because I think there is 
an opportunity and we want to make sure that as we hopefully 
get better healthcare outcomes from whatever healthcare 
delivery system continues to go forward that we align them 
somewhat similarly so, again, we don't get this duplication--
some of the things you are trying to avoid, actually, with the 
new rules.
    And I guess I would ask the chair if it would be possible 
to include a piece of information and some concerns put forward 
by the National Association of Chain Drug Stores dated October 
16th as part of the record for further consideration.
    Mr. Pitts. Without objection, so ordered.
    Mr. Schrader. And I yield back the rest of my time.
    Mr. Pitts. Chair thanks the gentleman and now recognize the 
gentleman from Indiana, Dr. Bucshon, 5 minutes for questions.
    Dr. Bucshon. Mr. Chairman, I don't have any specific 
questions, just a few comments.
    I was a practicing cardiovascular surgeon before and there 
are many barriers to patients properly taking their medications 
and being in compliance and this is some of those.
    Other areas, I think, of interest to me are prepackaging 
patients with certain amount of medicines they have to take on 
a daily basis.
    As many people know, patients already go home and take the 
little pill counters and put them in there themselves. But I am 
very intrigued about prepackaging at pharmacies, which some are 
doing now, where patients will just get a packet and all their 
medicines will be in there and it helps with the compliance 
issue and it also helps, I think, the pharmacist also and the 
pharmacy because less wasteful product, so to speak, where 
patients have pill bottles renewed and still have three or four 
pills in the other one and switch to the new bottle and those 
medicines are lost.
    So in the long run, there is a cost savings there probably 
for the health care system overall. So I appreciate your 
efforts at CMS to improve the quality of care for patients and 
I yield back, Mr. Chairman.
    Mr. Pitts. Chair thanks the gentleman.
    I now recognize the gentleman from New York, Mr. Engel, 5 
minutes for questions.
    Mr. Engel. Thank you very much, Mr. Chairman.
    I am always pleased when our subcommittee comes together in 
support of a particular cause and I just want to say that 
Medicare Part D Medication Therapy Management program is a very 
great example, and I thank our witness and look forward to the 
second panel as well.
    Mr. Gronniger, you note in your testimony CMS's belief, and 
I am going to quote it, ``that the Part D MTM model will give 
prescription drug plans stronger incentives and flexibility to 
improve prescription drug safety and efficacy.''
    Can you talk a little bit about why plans don't feel such 
incentives currently or, perhaps put differently, why isn't 
there already an incentive to improve prescription drug safety? 
Is there any reason that this wouldn't already be a goal?
    Mr. Gronniger. Yes.
    So it is not that Part D plans aren't trying to deliver the 
best care for patients and that clinicians managing care aren't 
trying to deliver the best care and that many cases do have the 
desire as well as the financial incentives.
    I think that the example that Dr. Bucshon just gave is a 
great one of prepackaging medications, is something that can 
help patients remember to take the right drugs. It can help 
them with the difficulty of opening bottles.
    But right now, there is just not an incentive for plans or 
pharmacists to invest if it costs less than the current 
standards then that they can justify. But there is no incentive 
in place that can support that.
    There is no true up at the end that says you have done 
better on the medical side of the benefit so we are going to 
provide some support for your work. And so because it cuts 
against the competitive pressures in Part D to keep the premium 
low, to keep enrollment high, we just don't see the investment 
that we think is probably beneficial here.
    Mr. Engel. And you don't see it down the road either, 
because, obviously, cost is the most relevant thing?
    Mr. Gronniger. Yes.
    So Part D plans are incentivized to manage and minimize the 
spending on prescription drugs and unless they are Medicare 
Advantage plans, are not responsible for the total cost of care 
of the benefit.
    And that makes sense in certain contexts but it also makes 
sense to test approaches to making them more attentive and more 
focused on how the drugs that the patients are taking are 
supporting the overall patient care.
    And that is why we have created an incentive to provide to 
plans so that if they do demonstrate that they can reduce costs 
on areas where we know that pharmacists and MTM type 
interventions can drive cost savings then plans should have the 
opportunity to share in that as long as beneficiaries from 
lower premiums.
    Mr. Engel. Thank you.
    I can see from your testimony that CMS put a significant 
amount of thought into defining the test area with the new MTM 
model and I can also see from your testimony that CMS has 
already carefully considered evaluation methods for this model.
    I have a clarification I would like. Why did CMMI choose to 
make only plans with the basic benefit eligible to participate 
in the new model?
    Mr. Gronniger. Sure.
    So like we have talked about for some of the evaluation 
parts of this, we want to make sure that we get the best test 
of this model and the best defined set of patients and plans 
possible.
    The basic plans are a clearly defined set of patients and 
populations where we believe there is significant need for 
these services. Over time, just as with Medicare Advantage, we 
would want to look at whether it makes sense to expand to 
enhance coverage as well.
    Mr. Engel. So what percentage of plans overall will be 
participating in this model nationwide?
    Mr. Gronniger. Nationwide, I am not sure of the percent 
overall. It is in 5 regions and I think there are 34 PDP 
regions. So it will be a minority of the population nationwide 
but a nontrivial minority.
    Mr. Engel. OK. Thank you very much.
    Thank you, Mr. Chairman. I yield back.
    Mr. Gronniger. The chair thanks the gentleman. I now 
recognize the gentleman from Virginia, Mr. Griffith, 5 minutes 
for questions.
    Mr. Griffith. Thank you very much, Mr. Chairman. Appreciate 
it. Appreciate you being here with us today. I am glad that 
Virginia is in the program area that is going to be tested.
    The CMS and Center for Medicare and Medicaid Innovation 
recently announced plans to conduct a pilot allowing Part D 
plans the opportunity to utilize new and innovative approaches 
to Medication Therapy Management.
    I have been a supporter of this and expanding the MTM 
program and cosponsor of Cathy McMorris Rodgers' bill to do so 
because I think better adherence to medication will keep our 
seniors healthy and lower our cost for chronic care.
    Does CMS plan on rolling out successful approaches, those 
that prove to be successful, to the entire Part D MTM program 
before the end of the 5 years that the pilot is scheduled to 
take place or to last?
    Mr. Gronniger. So for all innovation center projects our 
goal is to identify pilots and demonstrations that both improve 
the quality of care experience by patients and reduce program 
costs and if they meet those tests in the evaluation then there 
is the opportunity to expand them on the larger scale or even 
nationwide.
    So that would be our hope for this model as well that we 
get really strong results and that we are able to expand it and 
to provide these types of improvements on a nationwide basis if 
we can get the research base behind it.
     Mr. Griffith. And if you discover that before the end of 
the 5-year period, do you feel like you will roll it out before 
the end of that 5 years?
    Mr. Gronniger. We will always be contingent on the data and 
making sure that we have a clear understanding of how the 
program is working for patients and for the Medicare program.
    But we went with 5 years not because we wanted to wait 5 
years but because we heard from plans and other stakeholders 
that there was a lot of experimentation that is going to be 
required here and it is going to take some time to get it 
right.
    And so we wanted to make sure we allowed for that and not 
find ourselves feeling like we really got up and running year 3 
and the project is over. So we wanted to make sure that there 
is the opportunity to identify successful projects.
     If we are able to find that things work great in year 1 
and year 2, then we would be happy to talk with you and others 
about the right way to expand that and scale it up sooner than 
5 years.
    Mr. Griffith. OK. I appreciate that.
    I am glad you are here and given your role at CMS I wanted 
to go off subject a little bit and mention another Part D 
reform that I think is important. I know others disagree with 
me. But I know that last year CMS released a broad rule which 
was ultimately not finalized.
    That rule contained a provision to allow for any willing 
pharmacy to participate in Part D preferred network programs. 
This is an issue of great importance for rural seniors and 
pharmacies that I represent.
    Seniors ought to be able to go to their local community 
pharmacy and get the lowest price possible instead of being 
told by an insurance plan they need to travel upwards of 20 
miles to go to a different drug store.
    Now, in my district, that doesn't sound like a lot, I 
guess, if you come from a flat land area. But I represent the 
mountainous parts of Virginia and in my district that 20 miles 
could result in up to an hour in travel time.
    In fact, from Haysi to Clintwood is only 18.1 miles. Those 
are two towns in Dickenson County in my district but the mayor 
of Haysi tells me that if he is going to a meeting in the 
county seat in Clintwood, he plans on an hour because any 
weather condition, a coal truck, a timber truck or any traffic 
problem of any sort or nature on a mountain road means you are 
not going to get there on time.
    So he makes plans to travel an hour and it is just not 
right to have our seniors having to make plans to travel an 
hour to get to the pharmacy that may be designated by computers 
being close by but is not in reality.
    So that is my Congressman Welch and I, along with 59 
bipartisan cosponsors, have a bill in, H.R. 793, to ensure 
senior access to local pharmacies and we are hopeful that that 
will go forward and encourage CMS to take a look at this and 
would love to know if you had any comments.
    Mr. Gronniger. Yes, sir.
    Thank you, and I do come from flat lands in Kansas where we 
go by about a mile per minute. If you have to take longer than 
that then we are unhappy about it.
    The specific provisions you reference in the rule from last 
year we don't intend on in pursuing those at this time. We do 
think that improving and making sure that the pharmacy networks 
in Part D are robust is an important project and it is 
something that we are continually looking at.
    Mr. Griffith. Appreciate it very much and yield back.
    Mr. Pitts. Chair thanks the gentleman. I now recognize the 
gentleman from Maryland, Mr. Sarbanes, 5 minutes for questions.
    Mr. Sarbanes. Mr. Chairman, I don't have any questions. I 
just want to associate myself with the comments of Mr. Griffith 
on the annual pharmacy provision. I yield back.
    Mr. Pitts. Chair thanks the gentleman. All right. We will 
go to Mr. Long from Missouri, 5 minutes for questions.
    Mr. Long. Thank you, Mr. Chairman.
    Mr. Gronniger, what is the need for this innovation model?
    Mr. Gronniger. So we think that the Medication Therapy 
Management program to date hasn't delivered the benefits that 
we and others and Congress were intending when it was created 
in 2006.
    We think that there is a lot of need for better management 
of prescription drugs for the Medicare population and we think 
that the current program hasn't delivered largely as a result 
of misaligned financial incentives and regulatory barriers that 
we are trying to address in this project.
    Mr. Long. OK. And then back in 2012 November, I think, the 
CBO identified the cost savings potential of medication 
adherence in the Medicare program.
    And does CMS believe the program is designed to encourage 
medication adherence, can improve the quality for 
beneficiaries, and decrease costs?
    Mr. Gronniger. Yes, absolutely.
    We think that increasing adherence is likely to be one of 
the major tools in the toolkit successful applications here.
    We think that applicants will also look at projects to 
address side effects, to address duplicative therapies if any 
are identified and look at managing potential risks of drugs. 
So we think that improving adherence is likely to be one aspect 
of many of these programs.
    Mr. Long. OK. Thank you.
    You have covered a couple of my questions I had a little 
earlier. So with that, Mr. Chairman, I yield back.
    Mr. Pitts. Chair thanks the gentleman. I now recognize the 
ranking member of the full committee, Mr. Pallone, 5 minutes 
for questions.
    Mr. Pallone. Thank you, Mr. Chairman.
    Mr. Gronniger, I am very pleased that just over 5 years ago 
the Affordable Care Act was signed into law and the legislation 
expanded insurance to those who needed it the most and provided 
important protections for our most vulnerable citizens.
    So I would just like to ask you about one aspect of the law 
that pertains to Medication Therapy Management and that is the 
medical loss ratio, or MLR.
    Has CMS issued specific criteria as to what MTM services 
must contain in order to be considered quality improvements?
    Mr. Gronniger. Yes.
    So this is one of the regulatory and financial issues that 
we haven't discussed today. But the medical loss ratio rules 
stipulate that MTM programs today are counted as administrative 
costs and so it is a further reason that plans feel the 
financial need to minimize the investment in these programs.
    Under the model we will treat them as quality improvement 
activities and so they will not be counted against the plan, so 
to speak, in the calculation of MLR.
    Mr. Pallone. So you just want to elaborate a little more on 
CMS's decision to adjust the treatment of MTM services for 
purposes of the calculation of MLR? You want to just talk about 
that a little more? Is it just because as a means of 
encouraging it?
    Mr. Gronniger. Yes.
    So plans today need to meet the minimum MLR to participate 
in the program and so everything that counts against them on 
the administrative side is something that they feel acutely.
    By providing the ability to take something that is a 
quality-enhancing activity like MTM services out of the 
numerator, so to speak, out of the calculation it will allow 
plans to look at the investments that they need to make here 
and to right size them on the benefits of the program itself 
rather than on a compliance checklist.
    Mr. Pallone. All right. Let me ask you about the low income 
subsidy patients. On average, Part D patients who receive the 
low income subsidy tend to be in a poor state of health and 
subsequently need to take more prescriptions.
    And given that this is a more vulnerable population I am 
interested in how well the MTA program is being applied to our 
LIS patients. To date in Part D what proportion of MTM-eligible 
Part D beneficiaries are LIS enrollees?
    Mr. Gronniger. I will get back to you on the specific 
numbers, sir.
    Today, enrollment in MTM programs is slightly higher for 
LIS beneficiaries than for other beneficiaries and we think 
that under this model it is likely low income beneficiaries 
including LIS beneficiaries are likely to be people who 
successful plans study and try to target for specific tailored 
interventions to help them access their medications.
    We think we know that LIS enrollees are also in basic plans 
which are the plans that are eligible to apply here. So we 
think that it is likely to support improvements in care for LIS 
beneficiaries through that channel as well.
    Mr. Pallone. So is there anything else you could say about 
how the rates of MTM participation compare between LIS 
enrollees and other beneficiaries other than what you 
mentioned?
    Mr. Gronniger. Let me get back to you on the specific 
numbers on that one, sir.
    Mr. Pallone. All right.
    Mr. Gronniger. We think that this will improve the ability 
of plans to engage with LIS beneficiaries.
    Mr. Pallone. Are there elements in this CMMI-enhanced MTM 
model to specifically target the low income subsidy patients?
    Mr. Gronniger. The particulars of the interventions 
including beneficiary communications and the conditions 
targeted are something that plans are going to propose and we 
are going to work out what plans around the right way for that 
intervention to happen.
    So it is something where we hope to see diversity of 
approaches and innovation from the participants and 
applications.
    Mr. Pallone. All right.
    And my last question is will CMS be tracking MTM 
participation and rates of comprehensive medication review 
amongst these low income subsidy beneficiaries?
    Mr. Gronniger. Yes, definitely.
    Mr. Pallone. All right. Thank you so much. Thank you, Mr. 
Chairman.
    Mr. Pitts. Chair thanks the gentleman and now recognize the 
gentlelady from North Carolina, Ms. Ellmers, 5 minutes for 
questions.
    Ms. Ellmers. Thank you, Mr. Chairman, and thank you, Mr. 
Gronniger, for being with us today.
    And I apologize for coming in late and you may have already 
addressed the question that I have for you. But in relation to 
the Medication Therapy Management program, you know, CMS 
already acknowledging that the Medicare Part D program itself 
has been utilized lower than had been expected.
    I was just wondering, and there again, I know, there have 
been many discussions, especially the pilot program that is 
going to move forward--that was another one of my questions.
    But if you can just identify for me what you think the 
reasons are that this program has not been as successful as 
anticipated.
    Mr. Gronniger. Sure, and it gets back a little bit to the 
question that Ranking Member Pallone asked.
    We think that under the construct today Part D plans 
operate in a very competitive market. They need to keep 
premiums low to--both to attract enrollees as well as to 
qualify as low income subsidy benchmark plans which qualifies 
them for some automatic enrollment.
    So in that circumstance, plans have to look very hard at 
where they invest and where they try to do quality improvement 
activities, and because MTM services cost money, not 
necessarily a lot of money, but plans really are discouraged in 
some ways by the current structure from investing inactivities 
that are known to improve quality.
    So this is a required service for plans in Part D so they 
do it and we have defined how to do it and we have tried over 
the years to expand the number of people involved as well as 
the flexibility of what can be offered.
    But, you know, we have some statutory constraints as well 
as regulatory history. So this is an attempt to step outside of 
that box and say we know that there are potential interventions 
here that can benefit patients.
    Let us create a model that is sustainable for a plan to 
invest in those services, provide the technical investment that 
can work with--work with local pharmacists, that can work with 
the patient's physicians, that can provide better counseling to 
patients and better understanding of their medications, provide 
a framework for that and hopefully we will see this program 
take off.
    Ms. Ellmers. Great. Thank you so much for your time, and 
with that, Mr. Chairman, I yield back.
    Mr. Pitts. Chair thanks the gentlelady.
    That concludes the questions of the members present. I am 
sure we will have follow-up questions and other members who may 
be in another hearing will want to ask questions.
    We will send them to you in writing. We ask that you please 
respond promptly. Thank you very much for your testimony, your 
time and very informative.
    While the committee sets up for the second panel, the 
committee will stand in recess for 3 minutes.
    [Whereupon, the above-entitled matter recessed at 11:23 
a.m. and resumed at 11:29 a.m.]
    Mr. Pitts. Ladies and gentlemen, if you will take your 
seats. The subcommittee will reconvene. I would like to submit 
the following documents for the record: statements from the 
American College of Clinical Pharmacy and the College of 
Psychiatric and Neurologic Pharmacists, from the American 
Association of Diabetes Educators, from the American 
Pharmacists Association, from Prescriptions for a Healthy 
America, from the American Society of Health System 
Pharmacists, from the Healthcare Leadership Council, from the 
National Community Pharmacists Association and from the 
National Association of Chain Drug Stores and from the Academy 
of Managed Care Pharmacies.
    Without objection, those will be entered into the record.
    [The information appears at the conclusion of the hearing.]
    Mr. Pitts. I am pleased to welcome the second panel at this 
time and I will introduce them in the order of their 
presentation.
    First we have Mr. Lawrence Kocot, principal and national 
leader, Center for Healthcare Regulatory Insight, KPMG. 
Secondly, we have Mr. Mark Merritt, president and chief 
executive officer of the Pharmaceutical Care Management 
Association. Thirdly, Mr. Jesse McCullough, director, Field 
Clinical Services, Rite Aid Corporation, and finally, Dr. 
Richard Thomas Benson, associate director of stroke, MedStar 
Washington Hospital Center.
    First of all, your written testimony will be made a part of 
the record. You will each be given 5 minutes to summarize your 
testimony and we welcome you. Thank you for coming, and Mr. 
Kocot, you are recognized 5 minutes for your summary.

 STATEMENTS OF LAWRENCE KOCOT, PRINCIPAL AND NATIONAL LEADER, 
   CENTER FOR HEALTHCARE REGULATORY INSIGHT, KPMG LLP; MARK 
  MERRITT, PRESIDENT AND CEO, PHARMACEUTICAL CARE MANAGEMENT 
    ASSOCIATION; JESSE MCCULLOUGH, DIRECTOR, FIELD CLINICAL 
    SERVICES, RITE AID CORPORATION; RICHARD THOMAS BENSON, 
   ASSOCIATE DIRECTOR OF STROKE, MEDSTAR WASHINGTON HOSPITAL 
                             CENTER

                  STATEMENT OF LAWRENCE KOCOT

    Mr. Kocot. Thank you, Mr. Chairman.
    Chairman Pitts, Ranking Member Green and distinguished 
members of the subcommittee, thank you all for this opportunity 
to testify on the Medicare Part D Medication Therapy Management 
program.
    My name is Larry Kocot and I am currently principal and 
national leader of the Center for Healthcare Regulatory Insight 
at KPMG.
    As a former senior official with CMS during the 
implementation of the MMA I was an active participant in the 
implementation of Medicare Part D. Specifically, I was involved 
in the development of the original MTM program requirements and 
regulations.
    More recently, I was the project leader for the technical 
expert panel convened by the Brookings Institution and the 
MITRE Corporation to inform the development of the Medicare 
Part D enhanced MTM model recently announced by CMMI.
    The MMA amended the Social Security Act to provide 
subsidized prescription drug coverage to Medicare beneficiaries 
through Medicare Advantage and through a stand alone PDP.
    Today, nearly 40 million Medicare beneficiaries are 
enrolled in a Medicare-sponsored plan that provide prescription 
drug coverage with approximately 24 million Medicare 
beneficiaries accessing their prescription drugs for a stand 
alone PDP.
    Effective medication use can prevent or address acute 
chronic illnesses and improve beneficiary health outcomes and 
reduce overall healthcare costs.
    However, prescription drugs are often inappropriately used 
or suboptimally used, leading to adverse drug events, 
unnecessary hospitalizations, and other unintended health 
outcomes.
    Noting the great benefits as well as the potential risks of 
providing prescription drug benefit coverage to Medicare 
beneficiaries, Congress required that all Part D plans provide 
an MTM program to optimize therapeutic outcomes through 
improved medication use and to reduce the risk of adverse 
events.
    While the MTM program has had a positive impact on the 
health outcomes of some Medicare beneficiaries, the program has 
not lived up to expectations. Some plan sponsors view MTM as a 
necessary cost of participating in the Part D program and they 
do the minimum necessary to engage patients to satisfy CMS 
requirements.
    Experts across the spectrum of plans, pharmacists, 
academics, and advocates have noted that the success of the MTM 
program is severely limited by the misalignment of incentives.
    Furthermore, better evidence is needed to understand how 
MTM can more effectively be used and what factors are most 
important to broader adoption and use.
    Recognizing the limitations of the current program CMMI 
convened a technical expert panel to explore some of the major 
barriers to MTM program development and advancement.
    As a result of the tech discussions and consultations with 
a broad array of stakeholders, CMMI recently announced the 
enhanced MTM model demonstration.
    This demonstration has three important elements. First, it 
will provide additional regulatory flexibilities to allow plan 
sponsors to design more individualized and risk stratified 
interventions.
    Second, it will realign the incentives to provide a 
prospective payment for more extensive MTM intervention 
investment that will be outside of the plan's bid, and third, 
it will provide a performance payment in the form of an 
increased direct premium subsidy for plans that successfully 
achieve a certain level of reduction in fee-for-service 
expenditures and fulfill quality and other data reporting 
requirements under the model.
    Greater regulatory flexibility and a fundamental 
realignment of incentives for providing more robust and 
meaningful MTM through the enhanced model will encourage plan 
sponsors to deliver a more patient-centric and comprehensive 
approach to improve medication use in Part D.
    Likewise, the program could create new competitive 
opportunities for Part D plan partnerships that leverage data 
sharing and provider communications to bring greater value to 
the Medicare program and Medicare Part D beneficiaries.
    This could encourage plan engagement with more providers 
including pharmacists and physicians to more systemically 
collaborate, coordinate patient care and optimize drug therapy.
    Additionally, the model could better align Part D and the 
goals of MTM with other CMS programs incentivize to deliver 
higher value care to Medicare beneficiaries such as the 
Medicare Shared Savings Program.
    There are a number of factors that Part D sponsors will 
consider before participating in the model, some of which are 
outlined in my testimony.
    Nonetheless, I believe the enhanced MTM model is a critical 
first step to aligning the PDP sponsors and government 
financial interests.
    The model promises to create incentives for more robust MTM 
investment. It will provide flexibility to better target the 
interventions to the right patients at the right time and it 
will help generate better evidence on how MTM can be more 
effectively deployed across the health care system.
    The enhanced MTM model demonstration has the potential to 
unleash greater private sector innovation in the MTM program to 
provide higher quality prescription drug benefit for Medicare 
Part D beneficiaries.
    If the objectives of the demonstration are achieved, the 
MTM program could add even greater value to Medicare by 
improving the health outcomes of beneficiaries in Medicare Part 
D.
    Thank you, Mr. Chairman, for this opportunity to appear 
before the subcommittee. I am happy to take any questions.
    [The statement of Mr. Kocot follows:]
    
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    Mr. Pitts. Chair thanks the gentleman.
    Now I recognize Mr. Merritt 5 minutes for his summary.

                   STATEMENT OF MARK MERRITT

    Mr. Merritt. Good morning, Chairman Pitts, Ranking Member 
Green and the other members of the panel. Thank you for having 
me today.
    I am president and CEO of the Pharmaceutical Care 
Management Association. My name is Mark Merritt and I 
appreciate the opportunity to be here today and talk about an 
issue which actually has a lot of synergies among different 
stakeholders in health care and that is improving MTM and 
Medicare Part D.
    PCMA, my trade association, represents America's pharmacy 
benefit managers which administer prescription drug plans for 
over 250 million Americans with coverage through employers, 
unions, FEHBP, Medicare, and other programs.
    We are probably best known for what we do in Part D because 
it is such a popular successful program. But it is a program 
that can be improved.
    We do offer high quality affordable benefits. We do this by 
offering an array of choices to consumers by negotiating 
discounts with manufacturers, with retailers, establishing 
affordable pharmacy networks and offering innovative 
convenience tools like home delivery for prescription refills.
    We also use sophisticated analytics to prevent harmful drug 
interactions and improved patient safety. On this note, the 
Part D statute includes the Medication Therapy Management 
provisions that are designed or the goal of them anyway is to 
improve adherence, reduce adverse drug effects, and make sure 
there is not under use or overuse of prescription medications.
    And I think we all agree the promise of MTM has not been 
fully realized and that there is an opportunity here with the 
CMMI model to get it right.
    The reason there have been problems have been stated from 
some others but let me just kind of go through our list here. 
First, the one size fits all MTM requirements that are 
currently there prevent Part D drug plans from focusing on the 
beneficiaries who could really benefit most from the services.
    However, we are required to provide the same uniform 
services to every eligible patient regardless of their level of 
need, their level of compliance, their condition, or their 
willingness to participate in the program in the first place.
    It would be much more productive to let plans develop 
innovative programs that treat patients like individuals 
according to their particular needs, circumstances, and 
receptivity to MTM services.
    Second, even when MTM services appear to be working in Part 
D, the stand alone plans have had little visibility into the 
patient outcomes or economic savings they may generate in 
Medicare Parts A and B.
    Third, the existing MTM program offers no economic 
incentives to innovate or improve MTM services. In fact, they 
are somewhat of a disincentive to do so, since it is unclear 
whether investments that go beyond the bare minimum are treated 
as administrative rather than quality improvement expenditures 
in the medical loss ratio calculations.
    In this light, we would encourage CMS to explore new 
approaches that would improve the program in six ways. First, 
let plans target high-risk beneficiaries most likely to benefit 
from such interventions.
    Our plans have broad knowledge not just in Medicare but all 
across America in all these different programs to target people 
in different ways. The more flexibility we have the better.
    Second, if we have greater flexibility and a better range 
of services, we will do better for patients, do better for the 
program.
    Third, we need financial incentives for plans to innovate 
and expand MTM services. As Mr. Gronniger said, right now our 
top goal is to provide the best benefits at the lowest 
premiums, lowest cost sharing we can find, and if MTM has been 
kind of a low return project so far because of the way it is 
structured, there is not going to be a huge amount of 
investment in there if it comes to the expense of premiums or 
other things that patients really value.
    Fourth, we like to count expenditures for expanded or 
innovative MTM services as quality-improving activities for 
purposes of MLR.
    Then five, we want to focus on clinical outcomes instead of 
just procedural or process measures like medication counts or 
completed CMRs.
    It is not that those are not important, but outcomes that 
people are looking for, both clinical outcomes, economic 
outcomes and that is what we need to focus on.
    And six, stand alone PBMs should have access to Part A and 
B beneficiary outcomes data including alignment with ACOs.
    To its credit, CMS is working collaboratively with 
stakeholders and understands that the current requirements are 
preventing the MTM program from realizing its potential. We 
have had very productive discussions with them, as have other 
stakeholders here today.
    CMMI's new Part D enhanced MTM model program largely 
addresses our concerns and offers new hope that the original 
goals of MTM can be realized starting in 2017.
    So, in conclusion, our hope is that Congress and CMS 
regulators will allow this program to get off the ground and 
resist the temptation to add new MTM requirements in the 
meantime.
    The model needs time to build momentum, produce results, 
and fulfill the original goals of the MTM program.
    Thank you for your time and I look forward to answering 
questions you might have.
    [The statement of Mr. Merritt follows:]
    
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    Mr. Pitts. Chair thanks the gentleman and now recognizes 
Mr. McCullough 5 minutes for your summary.

                 STATEMENT OF JESSE MCCULLOUGH

    Mr. McCullough. Chairman Pitts, Ranking Member Green and 
members of the House Energy and Commerce Health subcommittee.
    My name is Jesse McCullough and I am the director of Field 
Clinical Services for Rite Aid Corporation. I oversee Rite 
Aid's clinical programs in Michigan, Ohio, Pennsylvania, New 
Jersey and the District of Columbia.
    My primary objectives are improving performance of 
Medication Therapy Management, immunization, and quality 
measure-based programs by identifying ways to reduce or 
eliminate barriers to providing these health care services to 
patients in the communities that we serve.
    We greatly appreciate this opportunity to testify because 
we feel strongly about the ability of MTM to improve the 
quality and affordability of health care services.
    My written testimony goes into greater detail but I would 
add this statement is consistent with the policy positions of 
the National Association of Chain Drug Stores of which Rite Aid 
is a member.
    For my oral testimony, I would like to summarize the 
importance of MTM, some progress in advancing it and challenges 
and opportunities for its improved utilization.
    First, the importance of MTM. Medications are the primary 
intervention to treat chronic disease and are involved in 80 
percent of all treatment regimens. Medicare beneficiaries with 
multiple chronic illnesses call on 13 different physicians on 
average, have 50 different prescriptions filled per year, 
account for 76 percent of all hospital admissions and are one 
hundred times more likely to have a preventable 
hospitalization.
    Yet, medication management services are poorly integrated 
into existing health care systems. Poor medication adherence 
alone cost the nation approximately $290 billion annually, 13 
percent of total health care expenditures and results in 
avoidable and costly health complications.
    My written testimony details numerous studies that 
demonstrate MTM's ability to help fix this. The Centers for 
Medicare and Medicaid Services and the Congressional Budget 
Office have reached positive conclusions about MTM improper 
medication use.
    Several states have implemented MTM programs and have seen 
notable savings for the state and beneficiaries. An MTM program 
in Ohio returned $1.35 for every $1 invested in the first year 
and $2.17 for every dollar invested in the second year. This is 
one example among many.
    Now about progress in leveraging MTM. Despite the proven 
value of MTM, the Medicare Part D MTM program has seen low 
enrollment and utilization rates. Current restrictions limit 
the eligible population too dramatically. That said, plans are 
required to offer a minimum level of MTM services and CMS has 
taken steps to improve the quality and measuring of the Part D 
MTM program.
    CMS and the Center for Medicare and Medicaid Innovation 
recently announced an initiative that would provide Part D 
plans the opportunity to utilize enhanced MTM models and 
strategies. Rite Aid applauds that.
    Although the testing phase for the program is 5 years, 
meaning that it will take a long time to incorporate useful 
strategies across the Part D program.
    So where are the challenges and opportunities that can be 
addressed now? Rite Aid has participated in MTM programs since 
their inception. We have helped thousands of patients get more 
out of MTM to optimize their medication therapy.
    The fact of the matter is we can do more.
    There are numerous challenges that exist which impede the 
uptake of Part D MTM services such as lack of incentives for 
plans, providers and beneficiaries, poor targeting of 
beneficiaries, a lack of beneficiary awareness and provider 
participation and prohibitive documentation requirements.
    Rite Aid believes reforming the Part D MTM program can be 
accomplished by better identifying beneficiaries who most need 
the services. Changes should be made to revise the eligibility 
requirements to include beneficiaries with single chronic 
conditions that have been shown to respond well to improved 
medication adherence.
    One of the committee's members, Congresswoman McMorris 
Rodgers, introduced legislation last Congress that would have 
made such changes. Under her outstanding leadership, the bill 
garnered 170 bipartisan cosponsors including 29 current Energy 
and Commerce Committee members.
    This Congress there is similar legislation that has been 
introduced in the Senate, S. 776, the MTM Empowerment Act. This 
bill would provide access to MTM for beneficiaries with 
diabetes, cardiovascular disease, COPD, and high cholesterol.
    We encourage Congress to advance this vital legislation to 
allow more Medicare patients to have access to MTM services.
    In addition to more effectively targeting and to more 
effectively target and reach beneficiaries most in need of MTM, 
we believe policy makers should explore ways to realign 
incentives in the program for plans, providers, and 
beneficiaries alike.
    I would welcome the opportunity to elaborate more on these 
topics further during the Q and A portion.
    In closing, Rite Aide would like to thank Congresswoman 
McMorris Rodgers, the committee for their leadership on this 
important issue.
    Our company and industry look forward to serving as a 
resource as Congress explores ways to strengthen the Medicare 
Part D MTM benefit for our nation's seniors.
    Thank you for the opportunity to be part of this vital 
discussion.
    [The statement of Mr. McCullough follows:]
    
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    Mr. Pitts. Chair thanks the gentleman and now recognizes 
Dr. Benson 5 minutes for your summary.

               STATEMENT OF RICHARD THOMAS BENSON

    Dr. Benson. Thank you, Chairman Pitts, Ranking Member Green 
and members of the subcommittee for holding this important 
hearing and inviting me to testify.
    Today, I speak not only as associate medical director of 
stroke at MedStar Washington Hospital Center but as a volunteer 
for the American Heart Association and its more than 30 million 
supporters dedicated to building healthier lives free of 
cardiovascular disease and stroke.
    The statistics are alarming. Over 93 million Americans 
don't take their medications as prescribed. Poor medication 
adherence results in 125,000 deaths in the United States 
annually and costs our health care system nearly $300 billion a 
year in additional doctor and emergency department visits and 
hospitalizations.
    Poor medication adherence is particularly common among 
patients with cardiovascular diseases, which is the number-one 
cause of death in this country and stroke is the number-one 
cause of disability among adults.
    And with patients with CVD, when they don't take their 
medications as directed, the repercussions are very severe. As 
I mentioned, they die or have loss with major disability.
    So why don't patients take their medications? There are 
many reasons. They may forget. They may think the medication is 
not working. They may fear the side effects or are having 
difficulty taking the medication, or it may be a combination of 
all of these.
    However, there is hope. Medication Therapy Management 
programs can improve adherence. Research indicates that these 
programs can lead to better health outcomes, reduce the risk of 
adverse events and help control health care cost.
    For example, the American Pharmacists Association 
Foundation created a community-based MTM program focussed on 
CVD risk factors such as hypertension and 
hyperhypercholesterolemia.
    The results were impressive and across the board. The 
proportion of program participants achieving targeted blood 
pressure level increased while heart attacks and other cardiac 
events fell by more than half as did patients' use of emergency 
room and other hospital services.
    In addition, health care costs paid by employers declined 
by more than 45 percent and the percentage of health plan costs 
related to CVD decreased from approximately 30 percent to 19 
percent.
    A 2013 CMS report showed that patients suffering from 
congestive heart failure and diabetes enrolled in MTM programs 
had improved medication adherence with considerable hospital 
cost savings.
    This was particularly true for those who received 
comprehensive medication review. The American Heart Association 
supports policies that would ensure access to these vulnerable 
services, especially for patients most in need.
    Passage of the Medication Therapy Management Empowerment 
Act of 2015 is critical to ensuring that a greater number of 
Medicare beneficiaries have access to MTM services.
    It would amend current MTM criteria to allow beneficiaries 
with a single chronic condition such as hypertension, high 
blood pressure, to be eligible for these services.
    While the MTM Empowerment Act of 2015 has not yet been 
introduced in the House this Congress, we salute Representative 
McMorris Rodgers' past work on this issue and for introducing 
legislation similar to this act.
    The American Heart Association was also encouraged when the 
Center for Medicare and Medicaid Innovation announced its new 
enhanced model to test strategies to improve and strengthen 
medication use among Medicare beneficiaries enrolled in Part D.
    MTM services currently offered by Part D plans falls short 
of their potential to improve quality and reduce unnecessary 
medical costs.
    This is an important step to provide these programs with 
regulatory flexibility and to identify new ways and strategies 
to improve Medicare patients' health outcomes.
    The American Heart Association strongly supports the MTM 
enhanced model as both seniors and health plans that cover them 
could benefit from stronger adherence to prescription 
medication. We look forward to its launch in 2017.
    In conclusion, the American Heart Association believes that 
Medication Therapy Management services play a critical role in 
ensuring patients meet their health care needs. We support 
greater access to these services and better patient education 
about medication adherence.
    We further advocate for improved care coordination between 
providers and utilizing existing relationships between 
pharmacists and prescribers to identify and help reduce 
barriers to improve drug adherence for those most at risk.
    It could allow a patient to attend his grandchild's 
baseball game or walk his daughter down the aisle. These are 
the outcomes we can all support and work towards.
    I thank you for giving me the opportunity to testify on 
this important issue and I would be happy to answer any 
questions.
    [The statement of Dr. Benson follows:]
    
    
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    Mr. Pitts. Chair thanks the witnesses for their testimony 
and we will now begin questioning. In the interests of my 
colleagues' request, I will now recognize Ms. McMorris Rodgers 
for her 5 minutes of questions.
    Ms. McMorris Rodgers. Well, thank you, Mr. Chairman, and 
thank you for holding this hearing on MTM and appreciate all 
the witnesses being here and providing your insights.
    I think we recognize that there is a lot to be gained if we 
could focus more on getting the program to function more 
efficiently but also the impact that it has on medication 
adherence, which is a goal that we can all share.
    Certainly, community pharmacists have been at the forefront 
of providing services such as medication therapy management. 
Pharmacist-provided services such as MTM are important tools in 
our effort to improve medication adherence, patient health as 
well as to improve health care affordability.
    I wanted to applaud Rite Aid for their active management 
and leadership on this issue, engagement with nearly 12,000 
pharmacists across the country that are on the forefront every 
day interfacing and treating patients.
    And Mr. McCullough, I wanted to start by just asking if you 
would review--I know you highlighted some but as you think 
about the current program, the Medicare Part D MTM program, 
just review some of the benefits, the challenges that you are 
seeing day in and day out at Rite Aid.
    Mr. McCullough. Well, let me start with the benefit. We 
have the opportunity with nearly 12,000 pharmacists trained to 
provide MTM services to be able to contract with a number of 
different plans to provide these services and we do that 
anywhere we can. It has been tremendous.
    That being said, the identification of patients who are 
eligible is probably one of the bigger challenges that we have. 
Being able to expand that eligibility would be vital to help in 
a number of ways.
    As it is right now, the patients that come to us they are 
oftentimes very, very complicated. They have a number of issues 
going on and what we try to do is we try to engage them to help 
make sure that any disease state that they have is being 
appropriately treated and any treatment that they have has a 
corresponding disease state for which it matches up, and 
through that process they identify a number of drug-related 
problems and work toward the resolution and the documentation 
to be able to communicate with other providers to make sure 
that we are all on the same page.
    Some of the biggest things that we have is just being able 
to get people in the door for these services. So while people 
may be eligible, getting them to accept that service is 
sometimes challenging. You have a number of patients that are 
somewhat skeptical.
    They may be a little naive of what the benefit of that 
program is and I would suggest those are a couple of bigger 
things that we see is we say well, my doctor takes care of 
that.
    There is some perception that there is a health care system 
that exists that is different in their mind than what actually 
exists.
    Ms. McMorris Rodgers. So address what you think a 
successful MTM program would look like and then also highlight 
the populations that you think will benefit most.
    Mr. McCullough. I think what would be most successful is 
where we can intervene the earliest. The old expression goes an 
ounce of prevention is worth a pound of cure. So the earlier we 
can intervene in any chronic disease state, and diabetes, COPD, 
cardiovascular disease are ones that come to mind very, very 
quickly.
    But anything that we can do earlier in the process will 
prevent disease progression and ultimately that will do is that 
will eliminate health care costs downstream.
    So if we can intervene with a diabetic to prevent morbidity 
such as blindness, amputation, so on and so forth, those are 
benefits that are direct cost related to the health care system 
and then there is also quality of life things that come in as 
well.
    Also, earlier intervention can prevent kidney disease 
progression like that. Diabetes is probably one of the low-
hanging fruits, cardiovascular disease.
    But, essentially, I am probably of the mind set that any 
chronic disease state is fair game to start early on to prevent 
that progression.
    Ms. McMorris Rodgers. Great. OK. Thank you, and thank you, 
Chairman, for yielding me this time.
    Mr. Pitts. You are welcome. Thank you.
    Chair now recognizes the ranking member, Mr. Green, 5 
minutes for questions.
    Mr. Green. Thank you, Mr. Chairman.
    The CBO estimates that last year Medicare Part D spent $65 
billion on prescription drugs. Despite the impressive magnitude 
of the spending we haven't developed a successful system that 
ensures we are doing all we can to help beneficiaries overcome 
any obstacles to taking that medication as prescribed.
    This issue is not new and, in fact, 25 years ago the Office 
of Inspector General issued a report entitled ``Medication 
Regimens: Causes of Noncompliance.''
    Yet, a quarter of a century later, we have made little 
progress and I want to add 25 years ago we didn't have some of 
the great pharmaceuticals that we can take for our illnesses.
    That being said, we do have several examples, many noted in 
the testimony of our witnesses of outstanding success in the 
area. I would like to take advantage of the four different 
perspectives we have on our second panel.
    Can our witnesses comment on what characteristics are the 
most important to incorporate in any MTM intervention in Part 
D, moving forward to achieve the outcomes of what we have seen 
in Medicaid and in private sector?
    In response, I would be interested in understanding what 
you see as a top barrier right now to achieving the success in 
Medicare Part D MTM and how the characteristics you identified 
would overcome that barrier.
    Mr. Kocot. I guess I will start. Well, first, I think what 
CMMI has done in constructing this model does address some of 
these questions.
    First, a prospective payment to allow plans to invest up 
front into MTM interventions and target patients that have the 
most need is a real good start.
    Secondly, having a reward on the back end for outcomes as 
opposed to processes is a very good result. There are some 
challenges with that, obviously, but we will work through those 
challenges.
    Those are two very good starting points for CMS to start 
with because the way that the program was structured before, as 
was said earlier, the goal of prescription drug plans is to 
compete in the marketplace based on premium, and if you are 
focusing on lowering the premium then you are not going to be 
investing a lot of cost or a lot of money into prevention and 
some of the other things that are necessary.
    CMS, under the current program, allows people to allocate 
or allows plans to allocate money but it has to be included in 
their administrative costs within their bid.
    Taking this outside of the bid and putting this as a 
prospective payment is going to make a huge difference in the 
ability in plans to invest more freely, more creatively, and 
more innovatively.
    Mr. Green. OK. Mr. Merritt?
    Mr. Merritt. I would agree with what Larry has said. I 
think the key is we need to let innovation start working 
because there are ways to reach these people.
    But right now, you have a lot of people who maybe are the 
wrong people to be targeting because they are full compliant on 
their medications.
    Maybe they are people who aren't interested in 
participating and a whole host of other reasons. You have 
prescriber abrasion where prescribers are getting asked by 
patients.
    What is this called, this MTM thing, and the prescriber 
will say, ``I don't know--I don't take the call--it's not for 
me--don't talk to them.'' So we need more coordination. I think 
these incentives will help there be more coordination between 
the plan and the prescriber, the pharmacist, the patient.
    Right now, people are subject to so much noise in their 
life in general and noise just on your phone, getting calls for 
refills and so forth.
    The thought of, for a lot of people, getting on a phone 
call and talking for 15 or 20 minutes about something to 
somebody on the other end of the line or waiting in line at the 
pharmacy and talking for 15, 20 minutes, a half hour.
    They don't have the time to do it, they are not interested 
in doing it and I think there are ways to change that. But we 
need to let innovations start working so we can see the stuff 
the works and do more of it.
    Mr. Green. Mr. McCullough.
    Mr. McCullough. I would just add in addition I think the 
top barrier, as you asked for, Mr. Green, is that the 
identification of the appropriate patients to impact.
    We have an awful lot of patients that come in our stores 
every day that would benefit from earlier intervention. So by 
being able to get earlier access to care I think you can have a 
lot of cost effective interventions that will save us money in 
the long run.
    Mr. Green. Dr. Benson.
    Dr. Benson. My idea of a excellent MTM intervention would 
be to truly embrace healthcare wellness and not illness.
    When we create a medical home for each individual, as we 
have talked about, in a medical neighborhood where a patient 
would go to his or her physician, be evaluated, medications are 
prescribed, that patient would then go to a pharmacist, have 
the prescription filled.
    The pharmacist would be an intermediary who can explain the 
side effects of the medication and also help with possibly 
checking blood pressure or blood sugars periodically.
    If there is an abnormal value that information would be 
relayed back to the physician and then that patient could go 
back to physician and we are truly creating a neighborhood of 
health and Wellness where we are catching abnormalities early. 
We are catching people who are not being compliant.
    We are truly developing a medical home and a medical 
neighborhood to deal with these diseases.
    Mr. Green. Thank you, Mr. Chairman. I know I am out of my 
time but, Mr. Kocot, you recently wrote an article for 
Medication Therapy Management health fair's blog and you 
described the status of an MTM program as well as upcoming CMMI 
Part D.
    I am interested in your thoughts and we might contact you 
as we go further. So thank you.
    Mr. Kocot. Be happy to. Thank you.
    Mr. Pitts. Chair thanks the gentleman. I will now recognize 
myself 5 minutes for questions. Mr. Kocot, we will start with 
you.
    Can you elaborate on your experience at CMS in developing 
the original MTM program, please?
    Mr. Kocot. Sure. Congress actually established the MTM 
program through the MMA, as you know, and Congress left it to 
CMS to fill in some of the blanks and that is the number of 
drugs that would qualify the number of chronic conditions and 
the dollar amount.
    As you will recall, Mr. Chairman, when we were implementing 
the MMA and, specifically, Part D we didn't know whether anyone 
was even going to provide a prescription drug benefit at the 
time.
    We were hoping people would come if we set up the party. 
The other thing we didn't know was whether it would be 
affordable. And then finally, with regard to the MTM program, 
we didn't have a lot of evidence on what would work.
    So the idea behind setting up the MTM program the way that 
we did was to get it set up, get it running, make it affordable 
and then learn through the process, learn through time and then 
add and develop the program.
    As you may know, the CMS, when we rolled out the Part D 
final rule, we called the Part D or the Medication Therapy 
Management program, we said it had the potential to be the 
cornerstone of the Part D benefit. And I truly believe that 
that is true still and it will become the cornerstone of the 
Medicare Part D benefit.
    But it is going to take some innovation and that is what 
this model is intended to bring to it. It is probably overdue 
but it is about time.
    Mr. Pitts. Looking to the future, if you will just continue 
a moment, what can Congress do to make sure MTM is reaching its 
fullest potential?
    Mr. Kocot. Well, I think one of the things that Mark said 
is important and that is, you know, let this model work. Don't 
allow administrative barriers to get in the way.
    There is other things that we may want to experiment with. 
CMS has been very adamant about marketing this new benefit or 
this new model to beneficiaries.
    We have got to do more to engage beneficiaries in their 
care. We are just not doing enough of that and that may be a 
barrier to engaging people in the care.
    There is a fine line between marketing and overdoing it 
with beneficiaries and using this in ways that you shouldn't 
but we also need to engage them and we should explore new ways 
to develop programs to do that.
    Mr. Pitts. Thank you. Mr. Merritt, what flexibility to do 
plans need to enhance the MTM program for their beneficiaries 
and does the CMS model provide you with that flexibility?
    Mr. Merritt. We are very encouraged by the CMMI model. It 
addresses virtually all the concerns that we have mentioned 
from economic incentives to flexibility.
    In terms of flexibility, right now there is the assumption 
that OK, you have to have several classes of problems and 
several different conditions, and it may just be one condition: 
a blood thinner.
    It could be opioid. It could be diabetes. It could be a 
whole host of things and there are different ways to identify 
individuals. Right now, we need to find individuals who need 
the help, who want the help and that we can really talk to 
about it.
    There is almost no awareness right now among people about 
this particular program and a cold call from us or a question 
from a pharmacist at the counter is not going to kind of move 
them right now.
    So we need to really find ways to target individual groups 
of people and really go after them, educate them, find other 
providers that they want to talk to.
    Maybe they want to talk to the plan. Maybe they want to 
talk to the doctor, maybe the pharmacist. But we need to get to 
know those people better. This will help us do that.
    The problem we have with existing law is we have to treat 
everybody the same, give them all the same uniform treatment. 
They don't all need the same treatment. You don't market any 
other program like that. We need that flexibility.
    Mr. Pitts. What are the implications for plans that 
activities associated with MTM will be counted as quality 
improving activities in the medical loss ratio? What does that 
mean for plans?
    Mr. Merritt. Well, the medical loss ratio really, in a 
sense, punishes additional administrative expenses. If more 
spending on MTM is viewed as an Administrative expense, the 
plan is going to get punished. You are going to have given 
rebates back and it is just a huge disincentive to move in that 
direction.
    The intriguing thing about the CMMI model is you will have 
separate payments that are outside of the whole MLR, outside of 
the bid where plans can have flexibility to invest in these 
things to get a return on that investment to see what works.
    Right now, the challenge is if we are going to spend more 
money than the bare minimum that is required, that money will 
be largely counted as administrative costs. It will undermine 
premiums.
    It will make products less competitive and there is just no 
incentive to do it, considering what people really want is 
lower premiums and real access to drugs. That is the most----
    Mr. Pitts. Thank you. Thank you.
    Mr. McCullough, please discuss how MTM works in practice 
and give me a real life example of a success story.
    Mr. McCullough. Yes, sir.
    In practice, what we do is when we have the opportunity to 
sit down with the patient to provide MTM service and, more 
specifically, the comprehensive medication review, is we sit 
down and we assess the patient to make sure that every medical 
condition they have has an appropriate treatment and every 
treatment that they have on board has a corresponding medical 
condition.
    Through that process, we also do some physical assessment 
to make sure that the therapies that they are on are actually 
achieving clinical goals to the benefit of the patient.
    And through that whole process we identify different drug-
related problems that we then collaborate with the prescribers 
to look to resolve, be that increasing a dose, decreasing a 
dose, adding a medication, removing a medication. Those are 
some very common things.
    Additionally, what we do is we then provide documentation 
to the patient around different actions that they can take to 
improve their health as well as documentation for them to be 
able to share with other providers, which would be a 
comprehensive list of a personal medication record.
    That is, arguably, one of the most important things that 
prescribers look for is to have a current list of medications 
so they know what to work from.
    As far as an individual example, we had an opportunity 
where we provided care to a patient--I believe the patient was 
in the State of Tennessee--where it was discovered that the 
patient was receiving continuous treatment for a urinary tract 
infection that was not necessary.
    And what was happening is that was creating respiratory 
complications and this patient was then put on a number of 
inhalers and steroids and what not to treat that.
    Through the comprehensive medication review process, we 
identified that root cause. We were able to get the patient's 
symptoms resolved.
    They were able to discontinue the respiratory medications 
and the word we got back is that that saved tens of thousands 
of dollars in health care costs.
    Mr. Pitts. All right. Thank you.
    The chair now recognizes the vice chair of the 
subcommittee, Mr. Guthrie, 5 minutes for questions.
    Mr. Guthrie. Thank you very much, and my question is for 
Mr. McCullough.
    As a pharmacist, you are aware of the important role that 
pharmacists can play in delivering care to patients we have 
talked about this morning.
    Actually, I have another bill--it is H.R. 592--that would 
allow Medicare reimbursement for some of the basic services 
that pharmacists provide they are allowed to perform under 
their own state law.
    Can you address some of the things that pharmacists can do 
but aren't reimbursed for in Medicare?
    Mr. McCullough. Yes, sir. I would be happy to do that. 
Thank you.
    I will just start off by just saying from my perspective I 
believe that the pharmacist has a specific goal in the health 
care community and that is to monitor health care safety and 
efficacy.
    We do an excellent job with safety as we look for drug 
interactions and drug allergies with every prescription that we 
fill in the community setting.
    Where we have a tremendous opportunity is in how do we make 
sure that the patient's therapy is as efficacious for them as 
possible and to that simple monitoring tests would be some of 
those very simple tests that we could be looking at.
    There are some medical conditions that monitor blood 
pressure with a cuff and a stethoscope. But there are other 
ones where you have to do some simple blood tests, which are 
allowed by state laws, and that does vary from one state to the 
next.
    But those are tests that we could do where we would be able 
to intervene and collaborate with prescribers to adjust 
therapies more appropriately.
    However, as it is right now, we do not have the capacity to 
be able to be able to bill for services like that, which would 
be very simple and very timely interventions to help increase 
the patient getting to a location where the therapy is adjusted 
in a more timely manner.
    Mr. Guthrie. OK. Thank you.
    And some of the questions I also have you touched on in 
your opening statement--your 5 minutes. But I think you said at 
the end you wanted, hopefully, a chance to elaborate.
    So I am going to ask some questions, because you kind of 
addressed that you would maybe get a chance to elaborate. You 
have already talked about the role that pharmacists play under 
the current MTM program.
    Could you talk about how the role could potentially change 
under the MTM model test out of CMS?
    Mr. McCullough. I think that through that you are going to 
see some different changes just by the new models that come 
forth and what I expect to see is just a number of different 
strategies used to identify different groups of patients, 
groups that will be more responsive.
    I think that that is one of the biggest things that we can 
get out of this is to be able to demonstrate that earlier 
action through more appropriate patient identification would be 
one of those things to look for.
    Whenever we are able to intervene earlier in the disease 
process I fully believe that we can change the trajectory of 
that disease progression to the benefit of the patient.
    Through that I can see pharmacists getting involved and 
doing a number of different additional things. Some of the low-
hanging fruit will be assessments to make sure immunizations 
are up to date with more regularity.
    I think there are a number of things like that that you 
will see come to light.
    Mr. Guthrie. OK. Thanks.
    I know that pharmacists and pharmacies particularly played 
an instrumental role implementing the Part D program.
    Has the role of the pharmacy changed since the introduction 
of Medicare Part D?
    Mr. McCullough. It is interesting. When I was talking with 
Mr. Kocot here before we started and I was dispensing when 
Medicare Part D was implemented and that was an interesting 
time, it was great because we were able to get more people 
accessed to medications that in December of 2005 there were 
different conversations than there were in January of 2006.
    Since that time, what we have seen is we have seen 
pharmacists become more instrumental in educating beneficiaries 
around their benefit design.
    But additionally you have seen the role of the pharmacist 
expand through the advent of MTM services that was brought 
through with Medicare Part D.
    But also we have seen a rapid expansion in the last 10 
years with immunization services that are provided in the 
community setting.
    Ten years ago there were a limited number of states and 
now, I believe, every state in the union offers some level of 
significance with pharmacy-based immunizations.
    Mr. Guthrie. Thank you. I just have a few--about 30 
seconds.
    You said--30 seconds for an answer--when Mr. Pitts talked 
to you, you talked about the benefits of the MTM program. What 
are some of the challenges you have seen in trying to implement 
or--at Rite Aid?
    Mr. McCullough. We contract with whoever we can because we 
want to provide service to whoever we can, and I believe Mr. 
Merritt made the comment that some of the challenges is when 
you are reaching out the patients to get them to enroll there 
is some resistance, there is some hesitancy, one, because they 
are not aware of the benefit.
    They don't know what all is entailed with that. They 
consult with the physician who says, I am not sure about what 
is going on.
    I would even suggest that there is some community-based 
resources such as senior centers that I have heard specific 
examples of that would say hey, if somebody calls you with 
something that sounds too good to be true it might be too good 
to be true.
    So, I think there is a huge opportunity to drive awareness 
with that population as to this is something that you may have 
as a benefit and if you have a benefit you should very much 
take advantage of that and then, additionally, working with 
other members of the health care team to make sure that you 
have their buy-in and endorsements and support.
    Mr. Guthrie. Well, thank you. Thank you for those answers.
    My time has expired. I yield back.
    Mr. Pitts. Chair thanks the gentleman.
    I now recognize the gentleman from New York, Mr. Collins, 5 
minutes for questions.
    Mr. Collins. Thank you, Mr. Chairman.
    Maybe to follow up a little bit on what Mr. Guthrie was 
getting at, and maybe what you said a little bit, Mr. 
McCullough.
    Motherhood and apple pie--I mean, this, on the one hand, 
sounds like that. You have got Democrats and Republicans here 
universally agreeing anything we can do to help patients treat 
their diseases better, save money at the same time both for the 
federal government and plans. If that is not motherhood and 
apple pie I don't know what is.
    So it comes back to, the question of how do we get more 
plans involved, how do we get more beneficiaries involved and 
maybe at some point confirming the cost benefit is real and it 
is not so nebulous that it is manipulated.
    But one particular question for Mr. Kocot, I think your 
written testimony anyway said basically there is not a lot of 
financial incentive--for plans to enter the MTM.
    But, on the star bonus payments, as I understand it anyway, 
one of the quality measures is drug related.
    So if have at least understood from some in the industry 
that the MTM plans have helped them in that particular criteria 
within their--to get their star ratings up, would you comment 
on that, Mr. Kocot, whether you agree or not that----
    Mr. Kocot. Sure. As you know, the financial rewards of the 
star ratings go to the MAPDs and the prescription drug plans do 
get a star rating. But it is not as powerful because of the 
financial rewards that are associated with the star program for 
Part D.
    So there is a different incentive. Certainly, they get a 
star ranking and they get that moniker next to their name as a 
plan. But that is certainly not as powerful as the financial 
incentives that the new model does establish for MTM.
    Mr. Collins. So a question I asked earlier, the gentleman 
from CMS, was why not Medicare Advantage and why not Medicaid.
    Now, the answer on Medicare Advantage was those companies 
offering those plans they are already coordinating and 
integrating A, B and D and that there is really not the need 
for the incentive because they are already covering the costs.
    Would you agree with CMS's position that an MTM pilot or an 
MTM program would not really be cost advantageous to the 
taxpayers in the Medicare Advantage world because it is already 
being done?
    I mean, is that--and anyone who might want to jump in on 
that?
    Mr. Kocot. I will start. I think what Mr. Gronniger was 
trying to say was that the incentives are aligned more fully in 
the Medicare Advantage program than they are in Part D and I 
thought I heard him say that we want to experiment with Part D 
and if things look like they are effective we could try to 
adopt more for the Medicare Advantage program.
    I don't think he ruled it out. But I think this is a good 
place to start because the contrast is very stark. The 
incentives are totally misaligned in Part D for a plan to 
invest in better care because there is no financial reward.
    Mr. Collins. Would the others agree with that?
    Mr. Merritt. Yes, I would agree with that.
    The reality is because the MTM current setup is so 
inflexible there just hasn't been a lot of information. There 
is not a lot of data.
    There are not a lot of outcomes reports on it and the 
assumption is the Medicare Advantage plans they have better 
access and reasons to be able to get there.
    The stand alones, clearly, can't get there. They don't have 
the incentives. They need this kind of support and I do think 
it is a good place to start.
    Mr. Collins. One last question, as my time expires here.
    Is there a geographic area in the country that seems to 
have adopted MTM more than others and, if so, why and what have 
they found?
    Or is this kind of a difficult issue across the whole 
country? Or is there any early adapters that you can think of? 
Not really?
    Mr. Kocot. We have some anecdotal evidence that MTM has 
taken hold in certain communities. But I don't have any real 
evidence to offer you that MTM is more prevalent in one plan 
versus another or in one geographic area versus another.
    I think it comes back to that issue of incentives and all 
Part D plans have to live within the same rules.
    Mr. Collins. So, really, where we might wish upon a star 
even that this was being better adapted by patients and plans, 
what you are referring to, the incentive piece and maybe the 
hard evidence of cost benefit analysis and it also sounds like 
really almost an educational piece wouldn't hurt and into even 
the community where, you stress, patient safety--somebody is 
taking 19 drugs, you got to figure there could be an issue 
there somewhere and if the patient is going back, it is push 
pull.
    So anyway, thank you for your testimony and with that, Mr. 
Chairman, I yield back.
    Mr. Pitts. Chair thanks the gentleman. I now recognize the 
gentleman from Virginia, Mr. Griffith, 5 minutes for questions.
    Mr. Griffith. Thank you very much, Mr. Chairman.
    Mr. Merritt, it is evident that the utilization of the Part 
D MTM program has been low since its inception. There may be a 
number of reasons for that.
    But one might be that Part D plan set an unreasonably high 
eligibility criteria for covered beneficiaries. Why is it that 
most plans require three or more chronic conditions and eight 
or more prescription drugs?
    Mr. Merritt. Well, I mean, we comply with what is in the 
MTM statute right now. So there is certainly, I would say, 
within our industry the certainty and intention to make this 
work.
    It is just very difficult to make it work when you have to 
have uniform services for every single person regardless of 
their needs, their interest in the program, their receptivity, 
what drugs they are taking and so forth.
    So it is in our interest to see this thing work. It has 
just been structured in a way where it is just difficult to 
work and not just from our perspective.
    I think everybody here, all the different stakeholders 
would say for different reasons it is very hard to get this off 
the ground the way it has been.
    We are hopeful, though, with the CMMI model that those 
barriers will be removed and I think all the stakeholders here 
think there is a really good chance of success if we let this 
program work.
    Mr. Griffith. So you don't think that the high barriers are 
causing a problem at this point or they are not designed to 
reduce the number of folks who take advantage of it?
    Mr. Merritt. No. I don't concede that there are high 
barriers. I just concede we are complying with what the 
standards are right now. And one of the good things about the 
standards with the CMMI program is it is reducing the number of 
conditions that make somebody eligible for this program.
    So there may be somebody with one condition that makes them 
eligible. There may be somebody with two. So it is in our 
interest to make sure that the utilization is done right and I 
think the challenge for all of us just hasn't been the 
incentive or the structure to make it work yet.
    Mr. Griffith. All right. Dr. Benson, you wanted to get in 
on this.
    Dr. Benson. Yes. No, I agree that the issue is multi-
factorial but I definitely support allowing single chronic 
conditions to be an eligibility criteria.
    As a representative of the American Heart Association, 
hypertension is one of the most common as well as treatable 
conditions that can decrease a lot of deaths in this country 
and that is a single condition, as well as diabetes.
    We have talked about that today is also a single chronic 
condition. So I definitely advocate that as a representative of 
the American Heart Association, allowing individuals with a 
single chronic condition to also be eligible for the program.
    Mr. Griffith. OK, and I appreciate that.
    Also, Mr. Merritt, the Pharmaceutical Care Management 
Association has stated that expansion of MTM eligibility would 
result in increased costs to the plans and therefore could lead 
to increased beneficiary premiums and costs to the Federal 
Government without adding any clear value to the program.
    Do you disagree with that? And then if you do what would 
you say to those who argue that well run MTM programs can 
result in reduced prescription drug prices as found by CMS when 
they studied the Part D MTM program?
    Mr. Merritt. Sure. That statement is true if there aren't 
the economic incentives to get the job done right.
    Right now, with the way the medical loss ratio calculations 
are calculated, any additional innovative things that we do on 
MTM are counted as administrative costs, not medical costs, 
which punish the plans and force some to give rebates.
    And so with economic incentives, not only do we have a 
reason to pursue this without having to sacrifice premiums or 
access to drugs and so forth but if it is set up this way where 
it is outside of the whole MLR calculation we have every 
incentive to really go for it and use all the innovative tools 
we have to make it work.
    Mr. Griffith. I appreciate that. Appreciate all of you 
being here today, and with that, Mr. Chairman, I yield back.
    Mr. Pitts. The chair thanks the gentleman. That concludes 
the questions of the members present. As always, we will have 
follow-up questions and members who couldn't be here will have 
questions.
    We will submit those to you in writing. We ask that you 
please respond promptly. I remind members that they have 10 
business days to submit questions for the record. Members 
should submit their questions by the close of business on 
Wednesday, November the 4th.
    Excellent hearing. Excellent testimony. Good program with 
bipartisan support and we look forward to progress that we will 
be making on this issue.
    So without objection, the subcommittee is adjourned.
    [Whereupon, at 12:24 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

                 Prepared statement of Hon. Fred Upton

    Today we are examining the Medicare Part D Medication 
Therapy Management program (MTM). This program has been in 
existence since the Medicare Prescription Drug Benefit began in 
2006 after the enactment of the Medicare Modernization Act of 
2003. The goal of MTM is simple--to ensure that Part D drugs 
are appropriately used by beneficiaries. Through more optimal 
utilization of prescription drugs in Part D, patients' health 
will be improved and medical costs can be lowered. This is 
important for seniors in Michigan and all across the country.
    But over the past nearly ten years, the program has been 
somewhat of a missed opportunity to cut costs for seniors and 
the Medicare program. Under the current construct of the 
program, it has been difficult to engage seniors and coordinate 
care due to burdensome statutory and regulatory requirements. 
Today, only 8%, a rate lower than one out of every ten seniors 
enrolled in Part D even participate in MTM.
    Last month, CMS announced a new innovation model titled, 
``The Part D Enhanced Medication Therapy Management Model.'' I 
am eager to hear from them today on the improvements this model 
will bring to MTM in the Part D space. We appreciate our 
witnesses for taking the time to talk with us about ways to 
advance this program so we can improve beneficiary care. I also 
want to thank Conference Chair McMorris Rodgers for her 
leadership on this issue.
    I yield the remainder of my time to ----------------------
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