(Medicare Part D Manual)

Medicare Prescription Drug Benefit Manual   Chapter 6  Part D Drugs and Formulary Requirements    Table of Contents  (Rev. 1 8, 01- 15-16)   Transmittals for Chapter 6 10 - Definition of a Part D Drug  10.1 -  General  10.2 -  Covered Part D Drug 10.3 -  Commercially Available Combination Products  10.4 -  Extemporaneous Compounds  10.5 -  Medical Supplies Associated with the Delivery of Insulin  10.6 -  Medically -Accepted In dication  10.6.1 -  Retrospective Determination of a Medically -Accepted Indication  10.7 -  Drugs  Purchased in Another Country  10.8 -  Drugs Used to Treat Opioid Dependence  10.9 -  DESI Drugs  10.10 -  Over -the-Counter Products (OTCs)  10.11 -  Common Home Infusion Drugs  10.12 -  Bundling of Home Infusion Drugs Under a Part C Supplemental Benefit  10.13 -  Inhaler Supplies  10.14 -  Vaccine A dministration  10.14.1 -  Elements of Vaccine Administration  10.14.2 -  Establishment of Multiple Vaccine Administration Fees  10.14.3 -  Other Vaccine Administration Considerations  20 - Part D Exclusions  20.1 -  Excluded Categories  20.2 -  Drugs Covered Under Medicare Part A or B  20.2.1 -  Exhausted Part A Benefits  20.2.2 -  Part D Sponsor Due Diligence in Prior Authorization of Part A or  B Versus Part D Coverage Determination  20.3 -  Coverage of Supplemental Drugs Under Enhanced Alternative Coverage  20.4 -  Application of General Exclusion Provisions  30 - Formulary Requirements  30.1 -  Pharmacy and Therapeutics (P&T) Committee  30.1.1 -  Membership  30.1.2 -  Conflict o f Interest  30.1.3 -  P&T Committee Member Disclosure to CMS  30.1.4 -  Meeting Administration  30.1.5 -  Formulary Management  30.1.6 -  Formulary Exceptions  30.1.7 -  P&T Committee Role in Transition  30.2 -  Provision of an Adequate Formulary  30.2.1 -  Formulary Categories and Classes  30.2.1.1 -  Application of Existing or New Drugs into the Current Version of the USP Model Guidelines  30.2.2 -  Formulary Benefit Management Tools  30.2.2.1 -  Utilization Management Edits Requiring CMS Submission and Approval  30.2.2.2  Utilization Management Edits Not Requiring CMS Submission and Approval  30.2.2.3  Application of Prior Authorization  30.2.3 -  Long -term Care Accessibility  30.2.4 -  Specialty Tiers  30.2.5 -  Protected Classes  30.2.6 -  Submission of Multiple Formularies  30.2.7 -  Formulary Performance and Content Review  30.2.8 -  Formulary Submission Timeline  30.3 -  Formulary Changes  30.3.1 -  Limitation on Changes in Therapeutic Classification  30.3.2 -  Limitation of Formulary Changes Prior to Beginning of Contract Year  30.3.3 -  Midyear Formulary Changes  30.3.3.1 -  Policy Regarding Formulary Changes  30.3.3.2 -  Formulary Maintenance Changes  30.3.3.3 -  Non -maintenance (Other) Formulary Changes  30.3.4 -  Provision of Notice Regarding Formulary Changes  30.3.4.1 -  Beneficiary Notice Requirements  30.3.4.2 -  Notice for Other Entities  30.3.4.3 -  Provision of Noti ce Regarding Formulary Changes Subsequent to Removal from the Market  30.3.4.4 -  Notice Requirements for Pending Formulary Changes  30.3.5 -  Formulary Change Notice in Advance of Upcoming Contract Year  30.4 -  Transition  30.4.1 -  Transition Requirements  30.4.2 -  General Transition Process  30.4.3 -  New Prescriptions Versus Ongoing Drug Therapy  30.4.4 -  Transition Timeframes and Transition Supply  30.4.4.1 -  Timeframe and Transition Supply  in the Retail Setting  30.4.4.2 -  Timeframe and Transition Supply  in the Long Term Care Setting  30.4.4.3 -  Transition Extension 30.4.5 -  Transition Across Contract Years  30.4.6 -  Emergency Supply for Current Enrol lees in the LTC Setting  30.4.7 -  Level of Care Changes  30.4.8 -  Edits for Transition Fills  30.4.9 -  Cost -sharing Considerations  30.4.10 -  Transition Notices  30.4.10.1 -  Prescriber Notification of Transition Fills  30.4.11 -  Public Notice of Transition Process  30.5 -  Provider and Patient Education Appendix A -  Common Acute Care Home Infusion Drugs  Appendix B -  Part D Drugs/Supplemental Drugs Summary Table  Appendix C -  Medicare Part B versus Part D Coverage Issues  Appendix D -  The Most Commonly Prescribed Drug Classes for the Medicare Population  Appendix E  Sample Transition Supply Scenarios and Eligibility  10 - Definition of a Part D Drug  (Rev. 18, Issued: 01- 15-16, Effective:  01-15-16; Implementation:  01-15-16)  Part D drugs are defined in Title XVIII of the Social Security Act (the Act) and in the regulations (42 CFR 423.100).  Part D sponsors are responsible for making appropriate coverage determinations and ensuring that covered Part D drugs meet the requirements in this section.   10.1 - General  (Rev. 18, Issued: 01- 15-16, Effective:  01-15-16; Implementation:  01-15-16)  Subject to the exclusions specified in section 20 of this chapter, a Part D drug means the following , if used for a medically -accepted indication as defined by section 1927(k)(6) of the Act:   A drug that may be dispensed only upon a prescription that is described in sections 1927(k)(2)(A)(i) through (iii) of the Act;    A biological product described in sections 1927(k)(2)(B)(i) through (ii i) of the Act;   Insulin described in section 1927(k)(2)(C) of the Act;    Medical supplies associated with the delivery of insulin;    A vaccine licensed under section 351 of the Public Health Service Act and its administration.   The Centers for Medicare & Medicaid Services ( CMS ) considers it best practice for Part D sponsors to consider the proper listing of a drug product with the Food and Drug Administration (FDA ) as a prerequisite for making a Part D drug coverage determination.  The FDA is unable to provide regulatory status determinations through their regular processes if a drug product is not properly listed.  Therefore, Part D sponsors should begin the drug coverage determination process by confirming that a prescription drug product national drug code (NDC) is properly listed with the FDA.   The FDAs Comprehensive NDC Structured Product Labeling Data Elements file (NSDE) is used as a source of NDC information for Medicare Part D Formulary Reference File and prescription drug event ( PDE ) editing. The NSDE file can be found at http://www.fda.gov/ForIndustry/DataStandards/StructuredProductLabeling/ucm240580.htm  CMS interprets dispensed only upon a prescription as meaning a drug that is recognized by the FDA as a prescribed drug requiring Rx only on its label per section 503(b)(4) of the Federal Food, Drug , and Cosmetic (FD&C)  Act.  Additionally, Part D sponsors must recognize a physicians authority to delegate prescribing where authorized by State law.  Generally, in retail pharmacy, standing orders and protocols are methods used by physicians to delegate and define their prescribing authority to non- physicia n providers such as pharmacists.  Standing orders are typically pre -approved documents for a specific drug or vaccine, contain a set of required clinical criteria and permit administration of the drug without physician examination, as long as the required clinical criteria are met.  A protocol is similar to a standing order but is generally broader in scope and may include multiple drugs and extensive clinical criteria.  A Part D sponsor may only provide benefits for Part D drugs that require a prescription if those drugs are dispensed upon a valid prescription, as  required by  423.104(h).  10.2 - Covered Part D Drug  (Rev. 18, Issued: 01- 15-16, Effective:  01-15-16; Implementation:  01-15-16)  A covered Part D drug is a Part D drug that is included in a Part D sponsors formulary, or treated as being included in a Part D plans formulary as a result of a coverage determ ination or appeal under 42 CFR  423.566, 423.580, and  423.600, and obtained at a network pharmacy or an out -of-network pharmacy in accordance with 42 CFR  423.124 .  For the applicable drugs of a manufacturer to be covered under Part D, the  manufacturer must participate in the Medicare Coverage Gap Discount Program.  An applicable drug is a Part D drug that is approved under a new drug application under section 505(b) of the Federal Food, Drug, and Cosmetic Act or a biologics licens e application under section 351 of the Public Health Service Act (other than a product licensed under subsection (k) of such Act).  Thus the definition of applicable drugs excludes biological products approved under the abbreviated licensure pathway (biosi milars).   10.3 - Commercially Available Combination Products (Rev. 18, Issued: 01- 15-16, Effective:  01-15-16; Implementation:  01-15-16)  Only those combination products approved and regulated in their combination form by the FDA as a drug, vaccine, insulin, or biological product, as described in paragraph (i), (ii), (iii), or (v) of the Part D drug definition at 423.100 are eligible for Part D coverage.  This requirement for FDA approval applies to commercially available combination products meant for broad distribution.  Extemporaneously compounded prescription drug products (addressed separately in this chapter in section 10.4 as well as in 423.120 (d)) are not affected by this  requirement.  Approved commercially available combination products include those w ith multiple active ingredients combined in a single drug product and those  products with multiple drugs that  remain separate but are co-packaged together and intended for dispensing as a single entity .  10.4 - Extemporaneous Compounds  (Rev. 18, Issued: 01- 15-16, Effective:  01-15-16; Implementation:  01-15-16)  Compounded prescription drug products can contain: (1) all Part D drug product components; (2) some Part D drug product components; or (3) no Part D drug product components.  As defined in 423.120(d), only compounds that contain at least one ingredient that independently meets the definition of a Part D drug, and that do not contain any ingredients covered under Part B as prescribed and dispensed or administered, may be covered under Part D.  Only costs associated with those components that satisfy the definition of a Part D drug are allowable costs under Part D because the compounded products as a whole do not satisfy the definition of a Part D drug.   For a Part D compound to be considered on -formulary, all ingredients that independently meet the definition of a Part D drug must be considered on- formulary.  B ulk powders  (i.e., Active Pharmaceutical Ingredients for compounding)  do not satisfy the definition of a Part D drug and are not covered by Part D.  For any non- Part D ingredient of the Part D compound, the Part D sponsors contract with the pharmacy must prohibit balance billing the beneficiary for the cost of any such ingredients.  Sponsors treat ing compounds as non- formulary products should be applying the cost sharing associated with an exceptions tier, regardless of whether the compound contains brand name or generic products.  For a Part D compound considered off -formulary, transition rules apply such that all ingredients that independently meet the definition of a Part D drug must become payable in the event of a transition fill and be covered if an exception under 423.578(b) is approved for coverage of the compound.  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.