CMS Issues Final Rule Modernizing Part D and Medicare Advantage to Lower Drug Prices and Reduce Out-of-Pocket Expenses

On May 23, 2019, CMS issued a final rule regarding Part D expenses and the Agency’s ongoing efforts in lowering the cost of prescription medications for its beneficiaries.

Per the rule, CMS reports that this final rule amends the Medicare Advantage (MA) program (Part C) regulations and Prescription Drug Benefit program (Part D) regulations to support health and drug plans’ negotiation for lower drug prices and reduce out-of-pocket costs for Part C and D enrollees.

CMS then goes on to outline the major provisions of the new rule. Per the announcement there are 5 provisions that CMS plans to implement. They are as follows:

1.) Providing Plan Flexibility to Manage Protected Classes:

According to CMS, except in limited circumstances, current Part D policy requires Part D sponsors to include on their formularies all Part D drugs in six categories or classes: (1) antidepressants; (2) antipsychotics; (3) anticonvulsants; (4) immunosuppressants for treatment of transplant rejection; (5) antiretrovirals; and (6) antineoplastics. The new proposed rule provides for three exceptions to this protected class policy that would allow Part D sponsors to: (1) implement broader use of prior authorization (PA) and step therapy (ST) for protected class Part D drugs, including to determine use for protected class indications; (2) exclude a protected class Part D drug from a formulary if the drug represents only a new formulation of an existing single-source drug or biological product, and (3) exclude a protected class Part D drug from a formulary if the price of the drug increased beyond a certain threshold. This rule is purported to be effective as of January 1, 2020.

2.) Updates to Part D E-Prescribing Standards

The requirement for this provision is that Part D plan sponsors implement an electronic real-time benefit tool (RTBT) capable of integrating with at least one prescriber’s electronic prescribing (eRx) system or electronic health record (EHR). According to CMS, this would support interactive real-time standards whenever feasible, and for standards that improve the cost-effectiveness of the Part D benefit. This provision would not go into effect until January 1, 2021.

3.) Medicare Advantage and Step Therapy for Part B Drugs

CMS indicated that in this final rule, CMS is reaffirming Medicare Advantage plans’ existing authority to implement appropriate utilization management and prior authorization programs (meaning policies and procedures) for managing Part B drugs to reduce costs for both beneficiaries and the Medicare program.

4.) Part D Explanation of Benefit

With this new rule, CMS is requiring the inclusion of negotiated drug pricing information and lower cost alternatives in the Part D Explanation of Benefits beginning on 01/01/2021. CMS cites its ongoing goal to be more transparent for beneficiaries’ which hypothetically would in turn create more competition and therefore lower costs.

5.) Prohibition Against Gag Clauses in Pharmacy Contracts

This rule also implements the statutory requirement that restricts Part D sponsors from prohibiting or penalizing a pharmacy from disclosing a lower cash price to an enrollee. Again, this is purported to help lower out-of-pocket costs of prescription drugs for Medicare beneficiaries by helping inform them about lower cost alternatives.

In summary, CMS has been actively working towards their agenda of lowering prescription medicines for beneficiaries. However, considering that these rules are set to be enacted in 2020 and some even in 2021, it may be some time before beneficiaries see the benefits of such provisions.

To read the notification in its entirety, the link can be found here.

The Gordon & Rees Medicare Compliance Group will continue to monitor this case and bring you updates as they become available. Please contact me at (412) 588-2283 or rmaldonado@grsm.com should you wish to discuss this or any other Medicare Secondary Payer matters.

Gordon Rees Scully Mansukhani Becomes First 50-State Law Firm

With 68th office opening, Gordon Rees Scully Mansukhani expands reach, services to every state.

Gordon Rees Scully Mansukhani (GRSM) has opened its 68th office, creating the world’s first 50-state law firm.

Name partner Miles Scully heralded the move as a game-changing moment in the legal services industry. “As the first and only law firm to feature offices in all fifty states, we are poised to meet our clients’ needs whenever or wherever they may arise. Our deep bench of talented lawyers coupled with our forward-thinking use of technology enables us to lead the industry in providing efficient and cost effective representation virtually anywhere in the country.”

Managing partner Dion Cominos added, “With an already established national platform, the firm was well-positioned to take the next step of providing full territorial coverage throughout the United States. This milestone represents both the culmination of our journey toward becoming a truly national firm, and the next chapter in a new era of delivering seamless and comprehensive legal services to clients on a nationwide basis.”

Since its founding 45 years ago in San Francisco, GRSM has strategically expanded across the nation, opening offices in markets critical to its clients. And as the firm’s clients have continued to consolidate, grow in size, and span additional industries, GRSM has grown to match and service their needs – initially on the west coast, and eventually throughout the country. The full list of GRSM’s offices and local contacts can be found here.

The firm’s strong growth was recognized by The American Lawyer in 2018, which named GRSM number 103 in top grossing law firms, moving up seven spots from the previous year. Law360 recognized the firm as the 40th largest in the United States in its annual rankings by domestic attorney headcount. The firm was also recognized among the top 45 for diversity on The American Lawyer Diversity Scorecard.

GRSM is a national litigation and business transactions firm with more than 900 lawyers providing full service representation to public and private companies ranging from the Fortune 500 to start-ups. Founded in 1974, GRSM is recognized among the fastest growing and largest law firms in the country.

Highlights of Resulting Media Coverage:
Bloomberg Law, April 15, 2019
Law360, April 15, 2019 (subscription may be required)

Contacts
Dion N. Cominos
Miles D. Scully

CMS Announces Webinars for Upcoming Enhancements to the Medicare Secondary Payment Recovery Portal (MSPRP) and Commercial Repayment Center Portal (CRCP)

CMS  announced two webinars for Upcoming Enhancements to the Medicare Secondary Payment Recovery Portal (MSPRP) and Commercial Repayment Center Portal (CRCP).

More to the point, the webinars will be addressing the fact that that effective April 1, 2019, electronic payment functionality will be added to both the MSPRP and the CRCP.  Taking place on March 13, 2019 for MSPRP users and March 14, 2019 for CRCP users, the webinars will provide more information on this new feature.

Practitioner’s Note: This enhancement could make paying outstanding Medicare conditional payments so much easier for debtors. Instead of sending a check and ensuring it’s applied to the proper claim, this function will hopefully give payers assurance that payment has been received and applied in a prompt manner and cut down on error when applying payments to claims that are not in final demand status. Additionally, it may be interesting to see how this may impact refunds as well.

The Gordon & Rees Medicare Compliance team will continue to follow these trends and update you as new developments arise.

Medicare Coverage App Launches eMedicare

Yesterday CMS announced a new app to display what Medicare Part A & B covers. Per the announcement, “The new ‘What’s Covered’ app lets people with Original Medicare, caregivers and others quickly see whether Medicare covers a specific medical item or service. Consumers can now use their mobile device to more easily get accurate, consistent Original Medicare coverage information in the doctor’s office, the hospital, or anywhere else they use their mobile device.” Unsurprisingly, CMS discussed the need for this app as questions about what Medicare covers are some of the most frequent inquiries that CMS receives.

Interestingly, this app also is reported to enable beneficiaries to connect their claims data to applications and tools developed by innovative private-sector companies to help them understand, use, and share their health data.

As discussed previously, this innovation is in line with the directive from the current administration to move toward more electronic access in regards to healthcare. Specifically, this program is called eMedicare, and some of the purported goals are to allow beneficiaries to examine all available plans and see how different coverage choices will affect out-of-pocket costs.

Practitioner’s Note: This app could be extremely beneficial to beneficiaries who have had a MSA approved and are attempting to appropriately spend down their funds. Additionally, it will be interesting to see if the next version of this new app will include the option to compare Part C plans. Considering the narrative, ease of comparing different Part C plans appears to be an important part of the eMedicare program. However, this does beg the question what exactly is the “health data” they aim to share? 

The Gordon & Rees Medicare Compliance team will continue to follow these trends and update you as new developments arise.

The Ghost of Cases Past – MSPA Claims LLC, v. Scottsdale Insurance Co.

For those familiar with the slew of MSP Recovery cases that have been ruled upon in the past six (6) months, it will come as no surprise that another court, specifically the United States District Court for the Southern District of Florida, found that MSPA Claims LLC lacked standing when bringing suit against the Defendant.

Echoing the recently decided cases brought by MSP Recovery and its subsidiaries, the Court again in MSPA Claims v. Scottsdale Insurance found that Plaintiff lacked standing as proof of assignment of rights was not present and as such, granted Defendant’s motion for dismissal. Facts that are almost identical to MSPA Claims 1, LLC v. Ocean Harbor and MSPA Claims 1, LLC. v United Auto. Ins. Co., 204  F. Supp. 3d 1342, 1345 (S.D. Fla. 2016), Plaintiff asserted rights were assigned from Florida Healthcare Plus to La Ley Recovery which then assigned rights of recovery to MSP Recovery. The Court disagreed and specifically noted that although Plaintiff argued Florida Healthcare Plus approved assignment to La Ley to MSPA Claims, prior to receivership, the assignment did not predate the receivership. More pointedly, the Court stated it “is unclear how Florida Healthcare Plus could have approved the assignment…valid if MSP Claims was not yet formed as a company in 2014 when the receiver took over Florida Healthcare Plus[1].”

As such, the Court granted Defendant’s motion for dismissal without prejudice.

With yet another ruling dismissing a claim brought by MSP Recovery, the Floridian courts appear to sharpen their scrutiny regarding cases brought by assignees of rights by Medicare Advantage Plans. The pressing question however, is will other jurisdictions look to these cases as persuasive case law in their own courts? The Gordon Rees Medicare Group will continue to monitor these cases and bring you updates as they become available.


[1] MSPA Claims 1. LLC v. Scottsdale Ins. Co., 2018 U.S. Dist. LEXIS 218675

CMS Issues updated Section 111 NGHP User Guide

As of January 4, 2019, CMS has issued an updated version of the MMSEA Section 111 NGHP User Guide. While version 5.5 of the User Guide has few changes, there are some noteworthy additions. The changes made to the latest version of the User Guide are as follows:

– Ch. III of the User Guide now clarifies that beginning January 1, 2019, the threshold for liability insurance settlements, judgments, awards, or other payments will remain at $750. CMS will also maintain the $750 threshold for no-fault insurance and workers’ compensation settlements, where the no-fault insurer or workers’ compensation entity does not otherwise have ongoing responsibly for medicals. This is outlined in Section 6.4 of Ch. III and in short, simply restates the fact that the TPOC dollar thresholds remain at $750 for liability, no-fault, and workers’ compensation insurance.

– The definition of the ‘Funding Delayed Beyond TPOC Start Date 1’ data field has been updated. This definition can be found in line 82 of Table A-3 and states “If funding is determined after the settlement date (TPOC Date), provide actual or estimated date of funding determination.” The previous definition simply stated “If funding for the TPOC Amount is delayed, provide actual or estimated date of funding.” The same verbiage has been added to lines 95, 98, 101, and 104 of Table A-5 Auxiliary Record, updating the definition of this field for all possible additional TPOCs (TPOCs 2 – 5).

– Ch. IV of the User Guide also provides updated versions of the excluded ICD-9 and ICD-10 tables in order to match the excluded lists that are available through the Section 111 MRA application (https://www.cob.cms.hhs.gov/Section111). These tables can be found in Appendices I and J.

– Lastly, version 5.5 of the User Guide has been updated to only include information from the last four User Guide releases in order to reduce the number of version and revision history pages.

Each chapter of the Section 111 NGHP User Guide, version 5.5 can be downloaded here.

Should you have any questions regarding the above or need any Medicare compliance assistance, please do not hesitate to contact Gordon & Rees Medicare Compliance Group at mstockdale@grsm.com or 412-588-2277

New Year, New Changes to the Workers’ Compensation Medicare Set-Aside Reference Guide

Today CMS issued an announcement that they have released Version 2.9 of the Workers’ Compensation Medicare Set-Aside Arrangement Reference Guide (Reference Guide), which can be found here. Per the new version, the changes included in this version of the guide are as follows:

  • To eliminate issues around Development Letter and Alert templates auto populating with individual Regional Office (RO) reviewer names and direct phone numbers, these will now display the generic “Workers’ Compensation Review Contractor (WCRC)” and the WCRC customer service number “(833) 295-3773” (Appendix 5).
  • Per CMS’ request, certain references to memoranda on cms.gov have been removed.
  • The CDC Life Table has been updated for 2015 (Section 10.3).
  • Updates have been provided for spinal cord stimulators and Lyrica (Sections 9.4.5 and 9.4.6.2)

The most noteworthy changes are those in regards to the spinal cord stimulators and Lyrica. In regards to the spinal cord stimulators, CMS specifically included in this version that “Routine replacement of the neurostimulator pulse generator includes the lead implantation up to the number of leads related to the associated code. Revision surgeries should only be used where a historical pattern of a need to relocate leads exist” …and “Surgery pricing may include physician, facility, and anesthesia fees. SCS pricing is based on identification of: 1.) Rechargeable vs. Non-rechargeable and 2.) Single vs. Multiple Arrays (leads). If unknown, CMS will default to non-rechargeable single array.” These pricing clarifications appear to be in line with the approved MSAs that CMS has approved over the last few months.

Lyrica has been a hotly discussed topic over the last few months. Those who are active in the industry have noted that Lyrica has been included more and more in many MSAs for conditions that are not related to a spinal cord injury, when this has been historically argued as an off-label usage. However, CMS seems to have quashed this debate with the release of the updated language regarding this prescription. Per the new update, “Lyrica (Pregabalin) is cited in MicroMedEx for an off-label medication use related to neuropathic pain from spinal cord injury, and a number of scientific studies indicate that Pregabalin shows statistically significant positive results for the treatment of radicular pain (a type of neuropathic pain). Spinal cord neuropathy includes injuries directly to the spinal cord or its supporting structures causing nerve impingement that results in neuropathic pain. Lyrica is considered acceptable for pricing as a treatment for WCMSAs that include diagnoses related to radiculopathy because radiculopathy is a type of neuropathy related to peripheral nerve impingement caused by injury to the supporting structures of the spinal cord.” In other words, a diagnosis of radicular/neuropathic pain would now support the inclusion of Lyrica in a MSA. Again, this has been in line with the recent approvals issued by CMS wherein this prescription medication has been included for radicular pain, such as radicular pain noted into the upper and/or lower extremity pain. However, in its attempts to clarify Lyrica’s accepted usage CMS has muddied the waters in the language when indicating “injury to the supporting structures of the spinal cord”. This could open the door to inclusion for conditions that are arguably unrelated to the spine simply because other areas of the body touch the spine. I.e. If prescribed for pain that originates not at the spine (ex. radicular pain from a shoulder injury).

The Gordon and Rees Medicare group will continue to follow this issue closely and will update you as soon as additional information is available.

Proposed Rule Regarding Section 111 Penalties Issued by Office of Management and Budget

Another notice relevant to the world of MSP compliance has been issued by the Office of Management and Budget. The notice, which was issued following the notice regarding Liability Medicare Set-Asides we previously reported on earlier this week, is titled “Civil Money Penalties and Medicare Secondary Payer Reporting Requirements” ,which can be found here. Per the abstract:

“Section 516 of the Medicare Access and CHIP Reauthorization Act of 2015 amended the Social Security Act (the Act) by repealing certain duplicative Medicare Secondary Payer reporting requirements. This rule would propose to remove obsolete Civil Money Penalty (CMP) regulations associated with this repeal. The rule would also propose to replace those obsolete regulations by soliciting public comment on proposed criteria and practices for which CMPs would and would not be imposed under the Act, as amended by Section 203 of the Strengthening Medicare and Repaying Taxpayers Act of 2012 (SMART Act).”

Although this is only a Notice of Proposed Rulemaking (NPRM), this issue is expected to be decided upon in September 2019, corresponding with the Notice of Proposed Rulemaking for Liability Medicare Set-Asides as well.  Of note, the actual rule was not available for review.

The Gordon and Rees Medicare group will continue to follow this issue closely and will update you as soon as additional information is available.

LMSA Rules by September?

Once again the possibility of regulations from the Department of Health and Human Services regarding Liability Medicare Set-Asides (LMSA) and No-Fault Medicare Set-Asides (NFMSA) has been brought into the spotlight.  In recent days, the Office of Information and Regulatory Affairs’ Office of Management and Budget published a notice of proposed rulemaking to provide guidance to Medicare beneficiaries and to protect the Medicare Trust Fund.  The full notice can be found here.  Per the abstract:

“This proposed rule would ensure that beneficiaries are making the best health care choices possible by providing them and their representatives with the opportunity to select an option for meeting future medical obligations that fits their individual circumstances, while also protecting the Medicare Trust Fund. Currently, Medicare does not provide its beneficiaries with guidance to help them make choices regarding their future medical care expenses when they receive automobile and liability insurance (including self-insurance), no fault insurance, and workers’ compensation settlements, judgments, awards, or payments, and need to satisfy their Medicare Secondary Payer (MSP) obligations.”

Interestingly, this proposed rule in regards to Liability Medicare Set-Asides (LMSAs) is noted to have “economically significant” priority. According to the Office of Management and Budgets, “significant” regulatory actions are defined in an executive order as those that: ‘Significant regulatory actions are defined in the Executive Order as those that have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or raise novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles set forth in this Executive order.”[1] Furthermore, a Notice of Proposed Rulemaking (NPRM) is expected to be decided upon in September 2019. Although the actual proposed rule was unavailable for review, to those of us that are familiar with the industry, rules for LMSA and NFMSA have been anticipated for some time.  However, this is the first indication of movement outside the Department of Health and Human Services.

This posting by the Office of Management and Budget is the first step to development of regulation and is not yet a proposed rule. This publication is simply notification that CMS is currently in the process of putting together a proposed rule.  Once the draft is prepared it will be published in the Federal Register and after publication any interested parties in the rule will be provided 60 days to comment.  Once the period for comment closes, CMS will decide whether to proceed with development of the regulation.

It is unclear as to whether CMS will seek ongoing feedback from interested stakeholders. As of this date, no Town Hall has been scheduled.

Gordon & Rees has previously written official comments for prior notices of proposed rulemaking and is equipped to do so on behalf of interested stakeholders. If you are interested in this service, please contact us. As this process develops Gordon & Rees will continue to keep you apprised of the progress.

[1] Department of Management and Budget FAQs. https://www.reginfo.gov/public/jsp/Utilities/faq.myjsp

New Conditional Payment Portal Functionality Expected in January

Long awaited improvements to the Medicare conditional payment reimbursement process may be available at the start of the new year, according to a November 19 alert from The Centers for Medicare and Medicaid Services (CMS). Back in August, CMS announced the Medicare Secondary Payment Recovery Portal (MSPRP) would offer enhanced functionality in 2019, including the ability for authorized Non-Group Health Plan (NCHP) users to self-report leads on liability, auto, no-fault or workers’ compensation cases. According to the alert, this functionality will be effective on January 7, 2019.  CMS is hosting a webinar regarding this enhancement on December 18th, 2018 at 1:00PM EST. A link to register for this webinar can be found here>>CMS 12.18.18 Webinar Registration

The ability to self-report leads will generate Medicare Conditional Payment information that authorized parties can review and/or dispute in accord with their reimbursement obligations under the Medicare Secondary Payer laws. Such enhanced portal functionality should eliminate several weeks of wait time per claim in obtaining Medicare conditional payment information.

This enhancement was initially introduced as a possible improvement for 2019 during a webinar CMS conducted on August 16. A second enhancement allowing online payment of Medicare conditional payments to the MSPRP was also referenced at that time as a possible improvement for 2019. The November 19 CMS alert makes reference to online payment.

Stay tuned to the Gordon & Rees MSPulse for a summary of the December webinar. In the meantime, please contact us should you have any questions.