Medicare Appeals & Exceptions Process Ensures Seniors Have Coverage for All Medically Necessary Drugs

(Washington, DC)—Contrary to recent press reports and assertions made today by Families USA, multi-tier formularies, increased use of generics, and other proven pharmacy management tools help improve quality and reduce costs for seniors in the new Medicare prescription drug benefit and, in tandem with Medicare’s appeals and exceptions process, ensure seniors get the drugs they need at an affordable cost, the Pharmaceutical Care Management Association (PCMA) said today.

“In every other part of the health care system, pharmacy management tools are recognized as essential to improving outcomes and ensuring value-based purchasing. That’s why these same protections, coupled with extensive appeals and exceptions rules, are afforded to seniors and the disabled in the new Medicare drug benefit,” said PCMA President Mark Merritt. “Regrettably, efforts to erode these proven tools would only harm seniors and turn back the clock to an unaccountable fee-for-service system with no regard to the real dangers associated with misuse, overuse, or underuse of prescription drugs.”

The pharmacy management tools that Medicare drug plans rely upon are similar to the same tools used by drug plans in Medicaid, Members of Congress’ own health plan, the Veterans Administration (VA), and private plans in the commercial marketplace. These tools, coupled with Medicare’s extensive appeals and exceptions rights, provide consumers with an array of quality and access protections.

Appeals & Exceptions Process in Medicare Prescription Drug Benefit

Under the Medicare Modernization Act, patients have the ability to receive coverage for any medically necessary drug, whether it is included on a plan formulary or not. If the drug is not included on a plan formulary, the patient can appeal to have the drug covered by their Medicare drug plan. Specifically:

· If the drug is not on a Medicare Advantage drug plan (MA) or a Medicare drug plan’s (PDP) formulary, the patient can appeal to their plan for coverage, based on a physician’s determination of medical necessity.

· Similarly, a patient may appeal a covered drug’s formulary placement to a lower cost-sharing tier.

· If the plan determines that a drug is not medically necessary or is in an appropriate formulary tier, the patient can appeal to an Independent Review Entity.

· If necessary, a patient can further request a hearing in front of an Administrative Law Judge and request a review by the Medicare Appeals Council. Medicare requires that appeals must be resolved within 72 hours for standard coverage determinations or within 24 hours in an emergency or life-threatening situation.

· Once the drug is determined through the appeal to be medically necessary, the plan must provide coverage for that drug.

Pharmacy management tools are also helping to drive down drug costs. Researchers at the Centers for Medicare and Medicaid Services recently announced that the rate of growth in prescription-drug spending slowed to a ten-year low, due in part to two tools used heavily by PBMs, increased use of generics and mail-service pharmacies. In Medicare, according to a recent PCMA analysis of the top 100 drugs used by seniors, Medicare beneficiaries are seeing discounts averaging 35 percent at retail pharmacies and 46 percent for medications dispensed through mail-service pharmacies.

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The Pharmaceutical Care Management Association (PCMA) is the national trade association representing America’s pharmacy benefit managers (PBMs). PCMA member companies provide pharmaceutical care management services to more than 200 million Americans.

Contact Information:
Phil Blando, 202-207-3614
Charles Coté 202-207-3605