(Medicare Part D Manual)

The labor costs associated with mixing a compounded product that contains at least one Part D drug component can be included in the dispensing fee (as defined in 42 CFR 423.100).  For compounds containing all generic products, the generic cost -sharing should be applied.  If a compound contains any brand name p roducts, the Part D sponsor may apply the higher brand name cost -sharing to the entire compound.  For low income subsidy (LIS) beneficiaries the copayment amount is based on whether the most expensive ingredient that independently meets the definition of a  Part D drug in the Part D compound is a generic or brand name drug.   10.5 - Medical Supplies Associated with the Delivery of Insulin  (Rev. 2; Issued:  07- 18-08; Effective/Implementation Date:  07 -18-08)  Medical supplies directly associated with delivering insulin to the body, including syringes, needles, alcohol swabs, gauze, and insulin injection delivery devices not otherwise covered under Medicare Part B, such as insulin pens, pen supplies, and needle -free syringes , can satisfy the definition of a Part D drug.  However, test strips, lancets and needle disposal systems are not considered medical supplies directly associated with the delivery of insulin for purposes of coverage under Part D.   Insulin syringes equipped with a safe needle device, i n their entirety (syringe and device), are also Part D drugs and should be managed like any other Part D drug the sponsor places on its formulary.  Part D sponsors must make safety enabled insulin syringes available on their formularies for all of their in stitutionalized beneficiaries.   10.6 - Medically -Accepted Indication  (Rev. 18, Issued: 01- 15-16, Effective:  01-15-16; Implementation:  01-15-16)  Section 1860D -2(e)(4) of the Act defines   medically -accepted indication, in part by reference to section 1927(k)(6) of the Act, to any use of a covered Part D drug which is approved under the Federal Food, Drug, and Cosmetic Act , or the use of which is supported by one or more c itations included or approved for inclusion in any of the compendia described in section 1927(g)(1)(B)(i) of the Act.  The recognized compendia are:  I. American Hospital Formulary Service Drug Information,  and II. DRUGDEX  Information System.   The definit ion of medically accepted indication also means, in the case of a covered Part D drug used in an anticancer chemotherapeutic regimen, the definition of medically accepted indication in section 1861(t)(2)(B) of the Act.  Thus, Part D sponsors will be requir ed to thoroughly understand and apply Part Bs definition of an anti -cancer chemotherapeutic regimen, utilize Part B compendia, and consider peer reviewed medical literature when necessary.  Pub. 100- 02, Medicare Benefit Policy Manual , chapter 15, s ection 50.4.5 (http://www.cms.gov/Regulations -and-Guidance/Guidance/Manuals/downloads/bp102c15.pdf ) will be the authoritative guidance for Part D sponsors in their consideration of medically -accepted indications for Part D anti -cancer chemotherapeutic claims.   Part D sponsors are responsible for ensuring that covered Part D drugs are prescribed for medi cally -accepted indications using the tools and data available to them to make such determinations.  Part D sponsors must reference all CMS recognized compendia to determine whether there are any supportive citations, prior to determining that a drug is not  being used for a medically -accepted indication.  Part D sponsors may rely on utilization management policies and procedures , approved by CMS where required (see section 30.2.2.1), to make such determinations .  Dispensing pharmacists  are not required to contact each prescriber to verify a prescription is being used for a medically -accepted indication.  Also,  medically -accepted indication refers to the diagnosis or condition for which a drug is being prescribed, not the dose being prescribed for such indicat ion.  Part D sponsors may have dose limitations based on FDA labeling, but an enrollee may request (and be granted) an exception to a dose restriction through the formulary exception process based on medical necessity criteria.   Additionally a Part D drug must be used for a medically -accepted indication that facilitates the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member (except for Part D vaccines).  Consequently, if a drug works on medical equipment or devices and is not used for a medically -accepted indication of therapeutic value on the body, it cannot satisfy the definition of a Part D drug.  For example, a heparin flush is not used to treat a patient for a medically -accepted indication, but rather to dissolve possible blood clots around an infusion line.  Therefore, heparins use in this instance is not therapeutic but is, instead, necessary to make durable medical equipment work.  Heparin would therefore not be a Part D drug when used in a heparin fl ush.  Utilization management edits should be applied to drugs that are likely to be used for indications that are excluded from Part D coverage or that are not medically accepted in the sponsors experience or as directed by CMS.  While CMS would not expec t edits to be universally applied to check whether every drug or most drugs are being used for medically -accepted indications, Part D sponsors remain responsible for ensuring that Part D drugs are only covered when used for medically -accepted indications.  Therefore, a ll Part D s ponsors should consistently utilize prior authorization (PA ) for those drugs with the highest likelihood of non- Part D covered uses, as detailed in section 30.2.2.3 unless  plans are able to reliably use tools other than PA to determine appropriate coverage for the drug.    10.6.1 - Retrospective Determination of a Medically -Accepted Indication  (Rev. 18, Issued: 01- 15-16, Effective:  01-15-16; Implementation:  01-15-16)  Part D sponsors may retrospectively identify and confirm  either as part of their retrospective review programs required under 42 CFR 423.153, or incident to another utilization management review  that a dispensed drug , including when dispensed as a transition fill, was not prescribed for a medically -accepted indication for a particular individual (see the example below, in which this occurred because a dosage issue resulted in the case being flagged).   Example:   An individual receives a prescription and takes the  drug within a common dosing regimen (i.e., one tablet daily).  Several months later, that individuals physician writes a new prescription for an increased dosage of that drug.  The second prescription triggers a quantity limit claim edit (for example, ba sed on safety limits) .  As a result, the individuals physician requests a coverage determination from the plan and submits evidence to support an exception to the quantity limit.  Based on that evidence, the Part D sponsor makes a determination that the drug was not prescribed for a medically -accepted indication.  When it was not reasonable to expect a Part D sponsor to require prior authorization to ensure a drug is being used for an accepted medical indication, CMS would not expect the sponsor to recover  payments made to pharmacies or attempt to obtain reimbursement from enrollees.  However, w hen retrospective review of point of sale claims adjudication determines that a drug was dispensed for a non- medically -accepted indication, the PDE should be deleted and accumulators adjusted.  (Sponsors should additionally reference all applicable PDE guidance  and, when applicable, guidance in the Prescription Drug Benefit Manual, chapter 18  Part D Enrollee Grievances, Coverage Determinations, and Appeals,  regardi ng required notices for coverage determinations, available at https://www.cms.gov/Medicare/Appeals -and-Grievances/MedPrescriptDrugApplGriev/Downloads/Chapter18.zip ).  10.7 - Drugs Purchased in Another Country  (Rev. 18, Issued: 01- 15-16, Effective:  01-15-16; Implementation:  01-15-16)  Part D sponsors must exclude Part D drugs from qualified prescription drug coverage if they are not sold in the United States.  In addition, Part D sponsors may only pay for drugs that satisfy the definition of Part D drug.  In general, such definition requires FDA approval for sale in the United States.  Therefore, even if the manufacturer has FDA approval for a drug, the version produced for foreign markets usually does not meet all of the requirements of the U.S. approval, and thus it is considered to be unapproved.   In the event of a drug shortage, in order to ensure access to critically needed drugs in conjunction with the actions taken by the FDA, CMS will accept PDE submissions with national drug codes for foreign versions of Part D drugs, imported under the FDAs exercise of its enforcement discretion.  PDE allowances will be limited to the specific drug p roduct(s), conditions, and the duration of the shortage as specified by the FDA.  Such products cannot be discounted under the Medicare Coverage Gap Discount Program.  10.8 - Drugs Used to Treat Opioid Dependence  (Rev. 18, Issued: 01- 15-16, Effective:  01-15-16; Implementation:  01-15-16)  Part D sponsors must include coverage for Part D drugs, either by formulary inclusion or via an exception, when medically necessary for the treatment of opioid dependence.  Coverage is not limited to single entity products such as Subutex, but must include combination products that are Part D drugs when medically necessary (e.g., Suboxone).  For any new enrollees, CMS requires sponsors to have a transition policy to prevent any unintended interruptions in pharmacologic treatment with Part D drugs during their transition into the benefit.  This transition policy, along with CMS non- formulary exceptions/appeals requirements, should ensure that all Medicare enrollees have timely access to their medically necessary Part D drug  therapies for opioid dependence.   A Part D drug is defined, in part, as a drug that may be dispensed only upon a prescription.  Consequently, methadone is not a Part D drug when used for treatment of opioid dependence because it cannot be dispensed for this purpose upon a prescription at a retail pharmacy.  (NOTE:   Methadone is a Part D drug when used for pain).  State Medicaid Programs may continue to include the costs of methadone in their bundled payment to qualified drug treatment clinics or hospital s that dispense methadone for opioid dependence.   10.9 - DESI Drugs  (Rev. 2, Issued:  07- 18-08; Effective/Implementation Date:  07- 18-08)  For a drug to be available for reimbursement by a Part D sponsor it must meet the definition of a Part D drug.  Secti on 1860D 2(e)(1) of the Social Security Act (the Act) generally defines a Part D drug to include those drugs that may be dispensed only upon a prescription and that meet the requirements of section 1927(k)(2) of the Act.  Section 1927(k)(2) generally requi res that the drug be approved by the FDA or otherwise described under sections 1927(k)(2)(A)(ii) or (A)(iii) of the Act.  These provisions address those drugs affected by the Drug Amendments of 1962 (amending the Federal Food, Drug & Cosmetic Act), which r equire that a new drug be proven effective, as well as safe.  FDAs Drug Efficacy Study Implementation (DESI) evaluates the effectiveness of those drugs that had been previously approved on safety grounds alone.  FDA indicates that these drugs, and those i dentical, related, and similar to them, may continue to be marketed until the administrative proceedings evaluating their effectiveness have been concluded, at which point continued marketing is permitted only if a new drug application (NDA) or abbreviated  new drug application (ANDA) is approved.  The vast majority of the DESI proceedings have been concluded, but a few are still pending.   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)