Medicare Reform Advisor, October 19, 2004

Oct. 19, '04 Vol. 1, No. 34 Weekly news and analysis

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Offices handle managed care ploy
Managed care organizations are testing the waters for drug administration payment methods in Georgia. Cigna sent a letter this summer to providers, including several big specialty groups, announcing that they were changing their payment method for drug administration. "They wanted to go to industry recognized max pricing and maximum allowable cost," seven office administrators confirmed in a conference call with Medicare Reform Advisor. Emboldened to change how they pay for drugs, Cigna said it planned to increase drug administration, but its letter did not specify by how much. Sharon Bromley, director of Summit Cancer Care, promptly asked for a fee schedule but didn't receive one, so she called Cigna to terminate the contract. Cigna retreated. "They told me that we never should have received the letter." She opined, "They sent this out to see how we would react." As of October 8, the Cigna contract! s for all seven providers remained in limbo. Reporter calls to Cigna were not returned by presstime.

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Fear of pain prescribing
First in a two-part series

Many medical providers don't have a sophisticated knowledge of how to assess and treat pain, says Joel Glasson, MS, pain management pharmacist at Duke University Medical Center in Durham, NC. Ignorance triggers a fear of narcotics' side effects and creates reluctance among providers to prescribe them. To combat unawareness, Glasson-who has specialized in pain management for 15 years-educates healthcare providers at Duke about pain management and works to bring staff pharmacists up to his level of skill and knowledge. He counsels patients and recommends medications to their physicians, including the reasons why certain medications suit the patients' needs. When Glasson succeeds in his education goal, staff pharmacists will incorporate his responsibilities of counseling patients and educating staff into their own jobs. "We want the pharmacists to play a wide role," says Glasson. "They can oversee and help manage pain."

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Until metered dose coverage expands, CMS stabilizes nebulizer fees
In 2006, CMS will expand access to metered dose inhalers (MDI) to deliver inhalable drugs to people with asthma or chronic obstructive pulmonary disease (COPD)-the country's fourth largest cause of death. MDIs will be covered under the Part D benefit. Until then, a $55-$64 fee will be available to reimburse providers for dispensing inhalation therapy drugs using nebulizers. Monthly costs of dispensing inhalation drugs using nebulizers have varied greatly from a low of $7 to a high of $204, according to a 2003 Government Accounting Office (GAO) study of patient costs. CMS Administrator Mark McClellan left the door open October 8 for CMS to raise the fee in 2006. The agency wants to work with those involved with inhalation therapy before deciding on the new fee. Acquisition costs will be a factor as the agency tries to reign in costs for the two most widely used drugs-iprat! ropium bromide and albuterol sulfate. Both will be under check starting in January as CMS will reimburse providers based on the manufacturer's average sales price plus 6%. So far, data from pharmcos submitted to CMS suggest that the Medicare payment rates for these two drugs are solidly inside the acquisition cost range the GAO found, McClellan reports. The GAO also found that acquisition costs were not necessarily set based on the supplier's size. A larger goal in all of this is to help people quit smoking, since 85% of those with COPD smoke. To see the letter about this issue that McClellan sent to the GAO's Medicare payment issues director Laura Dummit, go to cms.gov.

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PacifiCare plan offers unlimited generic benefit
CMS approved PacifiCare Health Systems bid to expand its Secure Horizons Medicare+Choice plan to Boulder county in Northern Colorado. Howard Phanstiel, PacifiCare's chairman and chief executive officer, credits the reform law for the change. A Secure Horizons Medicare+Choice plan will include access to coverage for unlimited generic and selected brand name medications with a co-payment ranging from $15 to $45. The plan will include a $15 co-payment for a physician office visit and a $500 co-payment for each covered stay in a network hospital. Members will also have access, at no additional charge - to SilverSneakers - a unique fitness program designed to encourage physical and mental well-being.

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CBO study counters disease mgmt pilot
There is not enough evidence to show that disease management programs would reduce Medicare spending, the Congressional Budget Office said in a report released October 13 that seems to counter at least one of the goals of CMS's chronic care improvement pilot program, according to Medicare Reform Advisor consultants. CBO researchers examined studies on disease management programs for congestive heart failure, coronary artery disease, and diabetes-the same three threshold diseases featured in CMS' chronic care improvement program. CMS is still evaluating proposals, says Sandy Foote, director of chronic care improvement in CMS's Medicare Management division.

Integrated delivery health systems, insurers, and doctor groups will carry out the chronic care program, and cost savings is one key piece. "We need a minimum of 5% savings against the control group; it's a risky program for sure," a government subcontractor told Medicare Reform Advisor on condition of anonymity since one of her clients is among the bidders.

Foote said medication management may be a part of some proposals sent in by the bidders; others may "tactically want to look at paying doctors," she said. However, our sources say that incentivizing doctors is risky because they're governed by their contracts.

If successful, the three-year chronic care pilot, which begins in January, would make disease management a fixture in helping Medicare patients realize better outcomes. Roughly 10 organizations (a mix of health systems and insurers) will lead the program with the help of subcontractors. To evaluate success, CMS will send these firms claims data throughout each year to help them assess whether to do more or less intervention for a particular population. Email the editor for a copy of the CBO study.

-Report from Bryan Cote

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Committee makes state pharma assistance recommendations under MMA

At its second public hearing last week in Washington, DC, members of the State Pharmaceutical Assistance Transition Commission presented their preliminary recommendations derived from weeks of deliberations on transitional issues impacting state pharmaceutical assistance programs (SPAPs) under the voluntary prescription drug benefit program of the Medicare Modernization Act (MMA). The recommendations-opened to public comment-focused on eligibility and enrollment, drug coverage and service delivery, and coordination of benefits.

Before enactment of MMA last December, many states had implemented programs to provide prescription drug coverage to elderly or disabled residents who did not qualify for Medicaid drug coverage. The MMA included language that would allow states to "wrap around" the Medicare benefit to fill in coverage gaps. In order to provide guidance on the transition and coordination of benefits, the Centers for Medicare and Medicaid Services (CMS) chartered a committee made up of 23 public and private sector members that first met in July. Its report is due January 1, 2005.

"All the work we've done is based on an assumption that we want to make sure that current SPAP members have uninterrupted access to medication," said Committee Chair Joan Henneberry, who is the director of Consulting & Research Policy Studies, Inc., in Denver. To best address this, the committee divided into three workgroups that focused on the following "crosscutting issues": impact on consumers, program design and future roles of SPAPs, and systems infrastructures.

"The whole point of the commission is to think about how SPAPs can change and evolve and do what they need to do to coordinate benefits," Henneberry said. "We wanted our recommendations to create a framework that would make it easy for SPAPs to coordinate with the prescription drug plan sponsors (PDPs)."

Embedded in the proposed recommendations is "the desire to encourage state flexibility and choice" and "not to take away any of the flexibility the states already have to make those programs serve their enrollees in the best way possible," she said. "We also wanted to make sure we constantly checked that whatever we were recommending wasn't going to shift more cost to SPAPs that already exists. We wanted to minimize that."

And although it was not its mission "to discuss or deal with the [Medicare prescription] discount cards," the commission wanted to keep in mind some very important lessons that the SPAPs learned from the rollout of the cards, Henneberry said. "We wanted to apply all of the "positive and needs-improvement lessons" that came from the rollout of that program "to make sure that we didn't make the same mistakes" and "that we built on whatever was successful."

Among the recommendations proposed and discussed were these five:

1. Formulary issues. CMS should establish transition rules during early implementation to ensure continuity of care, and enrollees should be protected from adverse clinical outcomes from mid-year formulary changes.
2. Beneficiary education. CMS should designate SPAPs to be the primary education/outreach agent for Part D with respect to SPAP enrollments.
3. Mail-order issues. CMS should encourage PDP sponsors have an exception process for seniors who have unsecured mailboxes so that the cost differential between mail order and extended supply at the retail level is waived.
4. Premium payments. SPAPs that pay Part D premiums on behalf of their members should be able to do that up front.
5. Network design. CMS should count only preferred pharmacies as part of a PDP's network for the purpose of determining whether a plan meets CMS access standards.

Report from Washington Correspondent Jan Simmons.

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Bryan Cote
Executive Editor
860-232-6367
E-mail address: bcote@hcpro.com