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.

ELECTRONIC PAYMENTS VIA MSPRP NOW LIVE

Effective April 1, the Medicare Secondary Payer Recovery Portal (MSPRP) is equipped to accept electronic payments for Medicare conditional payment reimbursements. Answers to common inquiries were subsequently released by CMS on April 12, 2019 called “Electronic Payments on the Medicare Secondary Payer Recovery Portal (MSPRP) and Commercial Repayment Center Portal (CRCP) Frequently Asked Questions and Answers.” Such functionality was originally referenced in the Strengthening Medicare and Repaying Taxpayers (SMART) Act of 2012.

In the alert, CMS specifically indicated that to make an electronic payment through the MSPRP, one does not need a new or updated user access. The option is available to any user on any matter to which the user already has access.

Payments are not required to be made through the MSPRP. Payers may continue to remit a paper check to satisfy Medicare conditional payment demands. However, any refund issued by the Medicare recovery contractor will still be made via paper check and will not be made electronically, to date.

Interestingly, CMS specifically reports that in order to make an electronic payment through the MSPRP, the matter to which you wish to apply payment must be in “demand” status. There is no option to remit payment electronically unless the amount has been demanded. Therefore, if payment is desired to be made on a Conditional Payment Notice instead of a Demand for Reimbursement, a written check still must be mailed to the CRC/BCRC for application to the claim. Furthermore, CMS clarifies that when paying online, this does not mean that the full demand amount must be paid. If a Redetermination Request has been submitted on a portion of the conditional payments being asserted, a user can still submit a partial electronic payment.

Finally, CMS reported that the electronic payments utilize Pay.gov to secure the transaction, where payments can be made utilizing a savings/check account, debit card, or PayPal linked to a bank account. Credit cards, however, are not being accepted for payment at present. Also, the limit for each payment method is posted, as well. Once payment has been made. a confirmation of payment will be posted to the MSPRP on the Payment Status page. Additionally, an Electronic Payment History status will list the status of all electronic payments, as well as the amount and payment date.

In summary, the new electronic payment system appears to streamline the payment process significantly, with much quicker application times and updates to the portal. However, as indicated above, it is still requiring that non-demand claims must be paid via paper check. This can be frustrating for those that are attempting to make payments before the demand and can potentially complicate settlements.

We at Gordon and Rees will continue to monitor these issues and will continue to report any updates.

New Part D Safety Policy Intends to Reduce Opioid Misuse

CMS recently announced its new Medicare Part D opioid safety policy, intended to reduce prescription opioid misuse. One aspect of the new policy is improved safety alerts at the pharmacy for Part D beneficiaries who are filling initial opioid prescriptions or receiving high doses. CMS cited the following three situations that would warrant an alert:

CMS recently announced its new Medicare Part D opioid safety policy, intended to reduce prescription opioid misuse. One aspect of the new policy is improved safety alerts at the pharmacy for Part D beneficiaries who are filling initial opioid prescriptions or receiving high doses. CMS cited the following three situations that would warrant an alert:

• Possible unsafe amounts of opioids.
• First prescription fills for opioids.
• Use of opioids and benzodiazepines at the same time.

CMS reports that if an alert is sent and if the prescription can’t be filled as written, including the full amount on the prescription, the pharmacist will give the beneficiary a notice explaining how they or their doctor can contact the plan to ask for a coverage determination.

The new policy also permits Part D plans to put drug management programs in place to help beneficiaries. One of the proposed ways that a Part D plan would accomplish this is given through the example that if a beneficiary gets opioids from multiple doctors or pharmacies, the beneficiary may be directed to receive such medications from specific providers or pharmacies to avoid overlap. However, the most notable part of this new plan is that the Part D plan will send the beneficiary a letter if it will limit their access to these medications under its drug management program. If so, the beneficiary and their doctor will have the right to appeal.

CMS acknowledges that “one size does not fit all” and that such policies do not apply to specific populations (i.e. long-term care facilities, individuals in hospice, palliative, or end-of-life care). To that end, additional material was provided for prescribers, pharmacists, and patients to clarify CMS’s interpretation of these policies.

Practitioner’s Note: While these policies are admirable in their attempt to curb the opioid issues within our country, it does beg the question as to what impact this will have in a clinical setting. With the example of the seven (7) day fill rule for new opioid users, in a majority of workers’ compensation and/or liability cases the beneficiary isn’t a beneficiary at the time of injury and the initial prescription of pain medication. As such, this policy would not apply to those individuals. Additionally, upon review of the additional materials for the providers and pharmacists, CMS specifically notes in bold “This alert is not a prescribing limit” and explains that decisions to taper or discontinue prescription opioids are individualized between patient and prescriber. How this policy may apply to the current Workers’ Compensation Medicare Set-Aside Reference Guide allocation methodology has yet to be determined.

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

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

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.

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.

CMS Low Dollar Recovery Threshold Remains $750 for 2019

There will be no change in the low dollar threshold for Medicare conditional payment reimbursement in 2019. The SMART (Strengthening Medicare And Repaying Taxpayers) Act of 2012 serves to avoid governmental waste by setting an annual amount in which the costs associated with reimbursement outweigh the benefits. The SMART Act provides that the Secretary must calculate and publish not later than November 15th a low dollar threshold amount applicable in the following year for settlements, judgments, awards or other payments in which Medicare Conditional Payment reimbursement need not be reimbursed given the costs associated with recovery. This threshold corresponds also to the $750 threshold for Medicare Mandatory Insurer Section 111 reporting requirement.

On Friday, November 15th, The Centers for Medicare and Medicaid Services released their updated Computation of Annual Recovery Thresholds for Non-Group Health Plans.  Below are the Agency’s findings:

  • The 2019 reporting threshold remains $750 for no-fault, workers’ compensation and liability cases.
  • The estimated cost to process any individual case is $297
  • The average Medicare conditional payment demand amount for settlements of $500 is $368 (74%)
  • The average Medicare conditional payment demand amount for settlements around $750 is $518 (69%)

These metrics once again demonstrate exceedingly high percentages of cost versus recovery for low dollar settlements. The SMART Act applies a common sense approach to recovery efforts, given such costs associated with reimbursement and the interest of avoiding wasteful spending of government money,. The complete notice can be found in the link here>> CMS Computation-of-Annual-Recovery-Thresholds-for-NGHP–2019.pd

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

IDS Property Casualty Insurance Class Certification Reversed, Remanded

As previously reported, the Third District Court of Appeal for the State of Florida recently reversed and remanded the class action certification for MSPA Claims 1, LLC v. Ocean Harbor. On October 24, 2018, the same Court reversed and remanded the only other certified class action suit brought by MSPA Claims 1, LLC.

Citing Ocean Harbor specifically, the Third District Court again opined that in this case, MSPA has failed to establish that common issues predominate over individual issues. Applying the same rationale as Ocean Harbor, the Court noted “to quantify the claims of the putative class members will require a comprehensive and distinct analysis of each underlying PIP claim and automobile accident…Plainly this is one of those cases where merely proving entitlement to reimbursement from IDS for payments made by Florida Healthcare Plus on behalf of MA., in no way proves the cases of the other class members.” IDS Prop. Cas. Ins. Co. v. MSPA Claims 1, LLC, 2018 Fla. App. LEXIS 15107

The Court then went on to reverse as well on the alternate ground of standing. Harkening back to MSPA Claims 1, LLC. v United Auto. Ins. Co., 204  F. Supp. 3d 1342, 1345 (S.D. Fla. 2016), the Court ruled that the approvals of assignment did not occur until after the initial complaint had been filed. The parties in question did not assign benefits until June 1, 2016 as a part of a settlement agreement. However, MSPA filed its amended complaint on March 8, 2016, several months prior to the Receiver’s approval. As previously found, standing must exist at the inception of a case. As IDS had based its attack on standing on validity of the assignment, standing was not present[1].

As such, the Court reversed and remanded for proceedings consistent with the opinion.

It would be remiss to not point out that this was MSP Recovery’s only other certified class action suit. With its reversal and remand, the future of these class action proceedings seems dimmer and dimmer, at least in the Third District Court of Appeal for the State of Florida.

 

[1] The court does note that this case does differ from MSP Recovery LLC v. Allstate Insurance Co., 835 F. 3d 1351 (11th Circ. 2016) which similarly argued lack of standing. In that IDS argued that MSPA’s private cause of action against IDS was barred by the federal anti-assignment statue. This was rejected by the Eleventh Circuit.

MSPA Claims 1 LLC v. Infinity Auto – No Collection Without Recollection

For MSP Recovery LLC, it apparently takes more than two things to make a thing go right. Collecting fees is now out of sight.

The United States District Court for the Southern District of Florida, dismissed yet another MSP Recovery LLC subsidiary claim with prejudice. It seems this time around the Plaintiffs could not establish that MSPA Claims 1, a subsidiary of MSP Recovery, was in fact acting on behalf of the now defunct Florida Healthcare Plus, Inc. Medicare Advantage Organization, despite producing affidavits speaking to the relationship from top brass within both companies.  The assignment was allegedly first with La Ley Recovery Systems prior to MSPA Claims 1.

On October 19, 2018, The Southern District of Florida, ruled in the case of MSPA Claims 1, LLC v. Infinity Auto Ins. Co., granting summary judgment. The Court also dismissed the case with prejudice.

In the present case, the Court allowed over sixteen months of discovery to go forward with this claim. Despite this timeframe, Plaintiff relied on only two affidavits to establish standing (based upon assignment from FHCP to La Ley Recovery) for the claim: the first of the Defense’s own attorney John. H. Ruiz and the second of Susan Molina, CEO of FHCP. Putting aside that it is generally improper for a lawyer in a case to testify as to his legal opinion regarding facts in the case[1], the Court found that the testimony about conversations between Attorney Ruiz and Susan Molina was “merely Mr. Ruiz’s mental impression following conversations…” that “does not lay the necessary factual predicate for Mr. Ruiz’s lay opinion testimony.”[2]

The Court then went on to examine the Affidavit of Susan Molina, who essentially attested to not remembering specific conversations with John Ruiz and did not specifically recall approving assignment to La Ley Recovery. The Court very clearly points out what is missing from the affidavit: a positive statement that express assignment was given to La Ley Recovery.

After that analysis, the Court found in a very familiar fashion, that the Plaintiff lacked standing even despite the Plaintiff’s position that such was demonstrated via the settlement agreement between FHCP and its liquidators. As has been held in several previous MSP Recovery cases, a settlement agreement cannot retroactively establish standing after a case is filed. As no assignment was found and standing was lacking, the Court dismissed the matter with prejudice.

 

[1] Hickman v. Taylor, 329 U.S. 495, 67 S Ct. 385, 394, 91 L Ed. 451 (1947)

[2] MSAP Claims 1, LLC v. Infinity Auto Ins. Co., 2018 U.S. Dist. LEXIS 181446

CMS Issues New WCMSA Reference Guide and Section 111 NGHP User Guide

As of October 1, 2018, CMS has issued updated versions of both the WCMSA Reference Guide and the Section 111 NGHP User Guide.

 WCMSA Reference Guide Version 2.8:

The updates found in version 2.8 of the Workers’ Compensation Medicare Set-Aside Reference Guide are as follows:

– As a part of an ongoing process, CMS must discontinue use of Social Security Number-based Medicare identifiers and distribute new randomly selected Medicare identification numbers to all beneficiaries, referred to as Medicare Beneficiary Identifiers (MBIs). Accordingly, all fields formerly labeled HICN are now labeled “Medicare ID” and will accept either an individual’s HICN or MBI (if assigned)

– The link to the CDC Life Expectancy Table has been updated. This link can be found at bullet #7 of Chapter 10.3 of the Reference Guide.

– The Verifying Jurisdiction and Calculation Method for medical reviews has been updated. This information can be found in Tables 9-1 and 9-2 in Chapter 9.4.4 of the Reference Guide.

– Version 2.8 of the WCMSA Reference Guide can be found here.

NGHP Section 111 User Guide Version 5.4:

The updates found in version 5.4 of the Section 111 Non-Group Health Plan User Guide are as follows:

– To meet Section 111 requirements, a Paperwork Reduction Act (PRA) disclosure statement has been added to this guide. This disclosure can be found on page iii of the User Guide.

– The contact protocol for the Section 111 data exchange escalation process has been updated. This escalation process can be found in Sect. 8.2 of the User Guide and in short, provides the contact information for the newly appointed EDI Director.

– In order to ensure updates are applied to recovery cases appropriately, RREs are asked to submit the policy number uniformly with a consistent format. When reporting updates enter the policy number exactly as it is entered on the original submission whether blank, zeros, or a full policy number. This requirement is discussed in greater detail in Sect. 6.6.5 of the User Guide

The excluded and no-fault excluded ICD-10 diagnosis codes have been updated for 2019. These codes can be found in Table I-1 and J-1 of Chapter V of the User Guide.

– The placement of the decimal point in the excluded ICD-10 “Y codes” of table I-1 has been corrected. For example, in version 5.3 of the User Guide these codes were written as Y921.10 whereas it should be written Y92.110. These codes are now written correctly.

Each chapter of the Section 111 NGHP User Guide, version 5.4 can be found here.

Gordon & Rees remains committed to bringing you the most up to date information regarding all things Medicare Secondary Payer related. Please do not hesitate to contact us should you have any questions about the newest versions of these reference guides.