(Medicare Part D Manual)

The definition of a Part D drug does not include less than effective (LTE) DESI drugs or those identical, related or similar drugs to the LTE DESI drug.  As FDA continues to undertake reviews under the DESI program and announces results of its hearings, CMS would expect Part D sponsors to adjust their formularies accordingly, as they should with any other applicable FDA drug product announcement.  If a sponsor discovers the presence of any LTE DESIs on its formulary based on an FDA announcement or otherwise, it should remove these drugs from the formularies on accordance with section 30.3.1  10.10 - Over -the-Counter Products  (OTCs)  (Rev. 2, Issued:  07- 18-08; Effective/Implementation Date:  07- 18-08)  The definition of a Part D drug does not include OTCs.  Therefore, Part D sponsors cannot cover  OTCs under  their basic prescription drug benefit or as a supplemental benefit und er enhanced alternative  coverage.  However, CMS will allow Part D sponsors the option to provide OTCs  as part of their administrative costs structure.  Refer to chapter 7, s ection 60, of this manual for further discussion of this option.  When an existing formulary product switches to an OTC status during the contract year, any existing inventory of the previous legend product (manufactured under the legend New Drug Application (NDA) and possessing the legend National Drug Code (NDC) number ) will continue to satisfy the Part D drug definition.  Given the potential for beneficiaries requiring conversion to other therapeutically equivalent legend products, CMS strongly recommends immediate notification of affected enrollees using the notificat ion criteria outlined in section 30.3.4.  CMS will direct sponsors to remove the converted legend product from their formulary at the next formulary submission window after the OTC product becomes available.   Providing the OTC product at no cost to benefic iaries, as outlined in chapter 7, s ection 60, of this manual, will not satisfy CMS formulary requirements and Part D sponsors may need to add additional drugs when the OTC is removed  from its formulary.  However, adjudication of the legend product may continue as long as the market holds residual inventory.   10.11 - Common Home Infusion Drugs (Rev. 2, Issued:  07- 18-08; Effective/Implementation Date:  07- 18-08)  CMS has identified a list of acute care drugs that are most commonly utilized in the home infus ion setting.  The use of these drugs or drug classes often results in an earlier hospital discharge and reduced healthcare costs.  Rapid access to these agents is imperative for these health care transitions.  It is CMS expectation that Part D sponsors wi ll not implement policies that could potentially delay or restrict beneficiary access to these important agents.  In general, should prior authorization or other utilization management edits apply to any of these agents, CMS would expect that Part D sponsors handle these in an expedited manner in order to facilitate hospital discharge in appropriate time frames.  In addition, it is CMS expectation that Part D sponsors ensure appropriate beneficiary access to these drugs or drug classes via formulary inclus ion.  See Appendix A for a list of commonly utilized home infusion drugs.    1 If, based on an FDA announcement, a Part D sponsor recognizes and removes a non -Part D drug from its formulary; CMS expects that Part D sponsors will provide 60 days of advance  notice of the formulary removal.                                                    10.12 - Bundling of Home Infusion Drugs Under a Part C Supplemental Benefit (Rev. 18, Issued: 01- 15-16, Effective:  01-15-16; Implementation:  01-15-16)  Part D sponsors that offer Medicare Advantage (MA) prescription drug plans may choose to provide Part D home infusion drugs as part of a bundled service as a mandatory supplemental benefit under Part C, provided the sponsor consistently applies the option (i.e., in a given contract year, the plan either always covers a particular home infusion drug as part of a bundled service under Part C, or always covers a particular home infusion drug under Part D).  Given uniform benefits requirements, sponsors electing this option must also ensure that the bundled service is available to all enrollees of any MA -PD or cost plan in which it chooses to provide Part D home infusion drugs as a mandatory s upplemental benefit under Part C.  Interest ed Part D sponsors must appropriately assign these costs to the Part C component of their bids to account for these bundled drugs.  They must also provide, through the Formulary Submission module, a file that clearly identifies the Part D home infusion drugs that will be offered as part of a mandatory supplemental benefit under Part C for the following contract year.  CMS will review sponsors home infusion drug files as part of our formulary review process to ensure that only home infusion drugs are included as part of the Part C supplemental benefit.   Effective with contract year 2010, CMS waived  the definition of a Part D drug at 42 CFR 423.100  with respect to Part D drugs c overed as part of a bundled benefit under a Part C supplemental benefit.  Waiver of the definition of a Part D drug will improve benefit coordination of home infusion therapy between Parts C and D, particularly since the services and supplies necessary for  home infusion are never covered under Part D but would be provided as part of a bundle of service under a Part C mandatory supplemental benefit.  However, this waiver is conditioned on the application of zero cost sharing for the bundle of home infusion s ervices provided under a Part C supplemental benefit.  Thus, sponsors will not qualify for the waiver and, in turn, will not qualify to cover Part D home infusion drugs as part of a bundle of services under a Part C supplemental benefit without indicating on their Plan Benefit Packages (PBPs) that the applicable cost sharing for this bundle of services is $0.   In addition, the requirement that Part D sponsors formularies include at least two Part D drugs in each category and class of covered Part D drugs at 42 CFR 423.120(b)(2)(i) is waived for Part D sponsors for applicable formulary categories or classes when Part D home infusion drugs are provided  as part of a bundled service as a mandatory supplemental benefit under Part C.  Waiver of the requirement at 42 CFR 423.120 (b)(2)(i) will allow Pa rt D sponsors choosing to provide Part D home infusion drugs as a part of bundled service under a Part C mandatory supplemental benefit to improve benefit coordination of home infusion therapy between Part C and Part D.  This improved benefit coordination promotes continuity of care and cost avoidance of more expensive institutional care by facilitating continuous access to home infusion drugs, as well as the costs of administration and supplies associated with that therapy.   Part D sponsors choosing to provide Part D home infusion drugs as part of a bundled service must indicate on their marketed formularies that certain drugs may be covered under the sponsors medical, rather than its prescription, benefit.  For more information, consult the model formular y available at:  http://www.cms.gov/Medicare/Prescription -Drug -Coverage/PrescriptionDrugCovContra/Part -D-Model -Marketing -Materials.html .  10.13 - Inhaler Supplies  (Rev. 18, Issued: 01- 15-16, Effective:  01-15-16; Implementation:  01-15-16)  In general, only those accessories for meter dose inhalers (MDIs), Dry Powder Inhalers (DPIs), or Nasal Spray Inhalers (NS) that are included on the New Drug Application or  Abbreviated New Drug Application, listed on the package insert, and specifically pa ckaged with the drug product itself are eligible to meet the definition of a Part D drug.  If the accessories (i.e., actuator, chamber) are sold separately or are not included on the drug products NDA or ANDA, they would not meet the definition of a Part D drug.   10.14 - Vaccine Administration  (Rev. 18, Issued: 01- 15-16, Effective:  01-15-16; Implementation:  01-15-16)  Since  January 1, 2008, the Part D program covers  vaccine administration costs associated with Part D vaccines.  CMS interprets this statutory requirement to mean that the Part D vaccine administration costs are a component of the negotiated price for a Part D -covered vaccine.  In other words, the negoti ated price for a Part D vaccine will be comprised of the vaccine ingredient cost, a dispensing fee (if applicable), and a vaccine administration fee.  This interpretation recognizes the intrinsic linkage that exists between the vaccine and its correspondin g administration, since a beneficiary would never purchase a vaccine without the expectation that it would be administered.  In general, CMS believes that Part D vaccines, including the associated administration costs, should be billed on one claim for bot h in- and out -of-network situations.  For example, if an in-network pharmacy dispenses and administers the vaccine in accordance with State law, the pharmacy would process a single claim to the Part D sponsor and collect from the enrollee any applicable co st-sharing on the vaccine and its administration.  Alternatively, if a vaccine is administered  outside of the plans Part D pharmacy network , the provider would supply the vaccine, administer it, and then bill the beneficiary for the entire charge, includi ng all components.  The beneficiary would, in turn, submit a paper claim to the Part D sponsor for reimbursement for both the vaccine ingredient cost and administration fee.   10.14.1 - Elements of Vaccine Administration  (Rev. 2, Issued:  07- 18-08; Effective/Implementation Date:  07 -18-08)  Vaccine administration fees should be subject to negotiations between Part D sponsors and pharmacies.  CMS expects that sponsors will take into consideration the elements reflected in existing Part B vaccine admin istration fees when establishing their own vaccine administration fees.  For example, Part B considers the immunizing professionals time in physically delivering the vaccine to a beneficiary, the resources encompassing the supplies (syringe, gauze, band- aid, alcohol prep pad, etc.), the indirect costs of the office, and professional liability.   10.14.2 - Establishment of Multiple Vaccine Administration Fees  (Rev. 2, Issued:  07- 18-08; Effective/Implementation Date:  07- 18-08)  Part D sponsors will have the  discretion to implement either a single vaccine administration fee for all vaccines or multiple administration fees based on type of vaccine, variance in provider type, and product administration complexity.  CMS plans to retrospectively review vaccine administration fees to look for outliers and potentially discriminatory practices that would impact beneficiary access to Part D vaccines.   10.14.3 - Other Vaccine Administration Considerations  (Rev. 2, Issued:  07- 18-08; Effective/Implementation Date:  07- 18-08)  Part D sponsors may implement drug utilization management tools to determine if a vaccine is necessary; however, in the absence of any information showing previous immunization (i.e., claims data), the Part D sponsor should make payment available for a vaccine and its administration consistent with Advisory Committee on Immunization Practices (ACIP) recommendations.  20 - Part D Exclusions  (Rev. 2, Issued:  07- 18-08; Effective/Implementation Date:  07- 18-08)  20.1 - Excluded Categories  (Rev. 18, Issued: 01- 15-16, Effective:  01-15-16; Implementation:  01-15-16)  Part D does not cover drugs or classes of drugs, or their medical uses, which are excluded from coverage or otherwise restricted under section 1927(d)(2) of the Act.   Drugs Excluded  from Part D coverage :   Agents when used for anorexia, weight loss, or weight gain (even if used for a non-cosmetic purpose (i.e., morbid obesity)).    Agents when used to promote fertility.    Agents when used for cosmetic purposes or hair growth.   Agents when used for the symptomatic relief of cough and colds.    Prescription vitamins and mineral products, except prenatal vitamins and fluoride preparations.   Nonprescription drugs.    Covered outpatient drugs which the manufacturer seeks to require as a condition of sale that associated tests or monitoring services be purchased exclusively from the manufacturer or its designee.    Agents when used for the treatment of sexual or erectile dysfunction (ED). ED drugs will meet the definition of a Part D drug when  prescribed for medically -accepted indications approved by the FDA other than sexual or erectile dysfunction (such as pulmonary hypertension).  However, ED drugs will not meet the definition of a Part D drug when used off -label, even when the off label use  is listed in one of the compendia found in section 1927(g)(1)(B)(i) of the Act : American Hospital Formulary Service Drug Information, and DRUGDEX  Information System.   Drugs Not Excluded from Part D Coverage :