More Medicare Key Terminology
What Every Pharmacist Should Know!
New Words for Medicare Prescription Drug Program
By: Stephen H. Paul, R.Ph., Ph.D., Temple University, School of Pharmacy
Member, PPA Medicare Task Force
This new drug and services program for patients’ necessitates the learning of a new lexicon of words and phrases. Listed below is a group of additional information for all pharmacy practitioners.
ASP (Average Sales Price): The quantity volume weighted average of the manufacturers’ average sales prices for all National Drug Codes (NDCs) assigned to the drug or biological product. The calculation is developed by taking the multiplication sum of the average sales price and the total number of units sold and dividing that numeric value by the total number of units sold for each NDC assigned to the drug product.
Auto Assignment: Dual eligible beneficiaries may automatically enroll in a Part D plan. They cannot be automatically assigned to a specific plan. The state must randomly enroll the beneficiary in a plan. The patient may change the approved drug carrier at any time.
Auto Enrollment: Patients who are eligible for both Medicaid and Medicare are classified as dual eligible beneficiaries. These patients will be automatically enrolled in the Medicare Part D drug program by January 1 if they are not already enrolled. The state will automatically place them in one of the state approved plans on a random basis. Auto enrollment does not prevent dual eligible patients from changing plans or even declining to enroll in Part D.
CAP (Competitive Acquisition Program): A new nationwide drug acquisition program for 181 physician drugs that is scheduled for implementation sometime in late 2006. Physicians would receive the drugs directly from CMS-approved vendors. The vendor would be responsible for deductible collection from patients and also submitting the claims to Medicare. Not all Medicare Part B drugs will be included in this program.
Community Care Rx: This pharmacy provider card program functions because it is under the sponsorship of MemberHealth, Inc. that is one of the national prescription drug plans for the Part D benefit.
CPT® (Current Procedural Terminology): A medical coding system developed to bill health insurance carriers for medical procedures and tests. Please see the phrase “HCFA Common Procedure Coding System.”
Creditable Coverage: The receipt of a prescription drug benefit that is at least equivalent to the standard Part D prescription benefit for traditional Medicare beneficiaries. It can come from the prescription drug benefit in a current health care insurance program, a prior employer’s drug benefit program, or having coverage in the PACE. The PACENET program should be examined carefully to see it the patient should remain in that program or sign up for the federal Medicare Part D program.
Drug Exclusions: Drugs that are not on formulary or specifically excluded from reimbursement due to the Medicare Modernization Act of 2003 (MMA). Drugs that are available or would be available under Part A or Part B will not be eligible for reimbursement under Part D. Certain drugs are not covered because they are not covered under Medicaid programs.
The drugs include: Products used for specified purposes including anorexia, weight loss or gain, fertility, cosmetic uses, hair growth, symptomatic relief of cough and cold. Prescription vitamins and mineral preparations (prenatal vitamins and fluoride prescriptions are covered).
Drugs that require associated tests or monitoring services
be purchased exclusively from a specific source.
Dual Eligibles: Beneficiaries who are entitled to Medicare Part A and B and are eligible for some form of the Medicaid benefit. These patients can enroll in the Part C (Managed care comprehensive) option or Part D (just drugs) programs starting November 15, 2005. Coveraage for pharmaceuticals can not commence until January 1, 2006. If they have any transitional assistance credit remaining on their approved Medicare Discount Cards you should help them make a decision on whether it would be more advantageous to sign up for the new prescription programs starting January 1, or wait until they use up the credit on their cards.
Enrollment Period: This year a beneficiary who is first eligible to enroll in a Part D plan has an initial enrollment period that starts November 15, 2005 and ends May 15, 2006. For beneficiaries who do not qualify during the initial enrollment period, their enrollment period starts three (3) months before becoming eligible, the month of eligibility, and three (3) months following eligibility.
HCFA Common Procedure Coding System (HCPCS): A set of rules that are composed of Level I codes (CPT® codes), Level II codes (national codes), and Level III codes (local codes). Level I (CPT®) codes are five digit numeric codes that describe procedures and tests. CPT® codes are developed and maintained by the AMA with annual updates. Level II (national) codes are five digit alphanumeric codes that describe pharmaceuticals, supplies, procedures, tests and services. Level II codes are developed and maintained by CMS with quarterly updates. Level III (local) codes are five digit alphanumeric codes that are being phased out by fiscal intermediaries.
Late Enrollment Penalty: Beneficiaries will be subjected to a late enrollment penalty if they do not sign up for Part D when first eligible. Even though Part D is voluntary there is a limited opportunity to sign up for this insurance program.
The premium will increase 1 percent of the base premium ($32.20 for 2006) per month for every month that the beneficiary waits to enroll. In 2006, this rate will be $0.32 per month. If the patient delays enrolling for seven months, then the increase in premium is 7 times $0.32 or $2.24 per month in addition to paying their prescription benefit premium. The individual will have to pay this surcharge for their entire lifetime. This percentage may increase each year.
Patients do not have to pay this late enrollment penalty if they are currently receiving retiree coverage at least as good as Medicare Part D (also known as creditable coverage). Beneficiaries should be receiving notification from their retiree benefits coordinator this fall to indicate whether their current coverage is creditable. If they do not receive or cannot find this notice, Medicare patients should call their retiree benefits coordinator to make this determination.
MAP (Medication Action Plan) A document the patient received from the pharmacists at the conclusion of the Medication Therapy Management (MTM) session. The document is patient centered and designed to have the patient as an active participant in the program. The document should encompass the medication related issue and action plan, the person(s) responsible for its implementation and its outcome. Starting date and date of verified results should be listed.
MTMP (Medication Therapy Management Program): Designed by a plan sponsor to ensure that covered drugs prescribed to targeted beneficiaries are appropriately used in order to optimize therapeutic outcomes through improved medication use. The program is designed to reduce the risk of adverse events for targeted beneficiaries. The MTMP must be coordinated with a managed care management plan established for a targeted individual under a chronic care improvement program (CCIP). This term has the same meaning as the medication therapy management. MTMP in community pharmacy includes the core components of medication therapy review (MTR), personal medication record (PMR), medication action plan (MAP), intervention and referral and documentation and follow-up.
Medicare Prescription Drug Plan Cost Estimator: This is a simple tool available on the CMS website. By entering a beneficiary’s monthly drug costs and our State, users will get an estimate of annual savings if they join a Medicare prescription drug plan. The calculation is based on the defined standard benefit and the lowest premium amount offered by the lowest cost plan for Pennsylvania. Formulary status of the drugs being prescribed is NOT taken into account.
MemberHealth, Inc. A prescription benefit management organization that is an approved Medicare Plan D provider. The firm administers numerous health benefit discount programs. Its marketing activities for these programs are conducted through three distribution channels: insurance and brokerage agencies, consumer direct marketing, and pharmacies.
MTR (Medication Therapy Review): This is a consultation between the pharmacists and the patient (or caregiver) to review the pharmaceuticals utilized by the patient. The one-on-one relationship enables the pharmacist to observe signs of and visual clues to the patient’s health problems including adverse reactions to prescription, non-prescription and health supplements.
Modifier: A modifier indicates that a service or procedure was altered by specific circumstances, but not changed in its definition or code. Modifiers are two-digit numeric or alphanumeric codes that are appended to the end of CPT/HCPCS codes.
OON (Out–Of-Network Pharmacy) Plan D sponsors must enable enrollees to have reasonable access to covered Part D drugs when the medications cannot be expected to be at a network pharmacy and beneficiaries do not access covered drugs at an out-of-network pharmacy on a routine basis. These pharmacies do not have to inform a beneficiary of any differential between the price of brand name drug and the price of the lowest priced generic equivalent of the covered Part D drug that is therapeutically equivalent and bioequivalent.
Part D drugs: Drugs that are on the formulary of an approved sponsor in the state where the beneficiary resides. Part D drugs can vary from different carriers.
PMR (Personal Medicationl Record): The individual’s electronically generated or manual record of prescriptions, non-prescriptions, herbal preparations and dietary products used. This comprehensive record should include demographic and PBM provider information in addition to the medication name strength and dosage form. It should also include the directions for usage and its intended benefit. The starting and termination dates of therapy should be included. Pharmacist or Pharmacy name, prescriber and phone or other contact information should be included. Date of last update must be included. If the patient shares the information with providers and they update the document all practitioners should be able to make maximum therapeutic use of the information.
PSTAC (Pharmacist Services Technical Advisory Coalition): Formed in 2002 with the goal of improving the coding infrastructure necessary to support billing for pharmacists' professional services. The coalition works to provide the necessary leadership to position and secure pharmacy's place in the electronic data interchange (EDI) health encounter, claims processing and payment environment relating to all providers of professional services.
SHIP (State Health Insurance Assistance Programs) Individual State programs funded by CMS that provide direct counseling and assistance to individuals with Medicare. States have substantial discretion in providing their services. Program staff will aid in minimizing the administrative burden of Medicaid administrative costs associated with Medicare Part D and assisting in reaching potential beneficiaries and aid in their enrollment in the prescription program. This program also aids beneficiaries in understanding their rights under Medicare and the choices of Medicare plans available as traditional and managed care options. In Pennsylvania, the program is known as “APPRISE.”
Special Enrollment Period (s): For an enrollment or change of enrollment made during a special enrollment period, the effective date of prescription coverage is determined by CMS. The federal agency will do so in a manner consistent with providing continuity of drug coverage.
A beneficiary may enroll or disenroll if one of the following circumstances occurs.
Involuntary loss of creditable coverage.
Beneficiary was not adequately informed that she or he had lost drug coverage
or never had the insurance benefit.
Enrollment on non-enrollment was unintentional, inadvertent, or in error due to an action or inaction by any individual authorized to act on the government’s behalf.
The beneficiary is a full-benefit dual eligible recipient.
The beneficiary disenrolls from a MA-PD program and selects the traditional Medicare program.
The sponsor’s contract is terminated by the sponsor or by CMS.
The plan is no longer offered in the locality where the enrollee resides.
The beneficiary moves to a residence outside of the service region for the sponsor’s program.
Plan sponsor violates an important provision of its drug contract
Targeted beneficiaries: Targeted beneficiaries for the MTMP or MTM are enrollees in the sponsor's Part D plan who have multiple chronic diseases; are taking multiple Part D drugs; and are likely to incur annual costs for covered Part D drugs that exceed a predetermined level as specified by the Secretary of HHS.
Transition Process: A program that a plan sponsor sets up to enable continuity of care to be given to patients whose medications are not on the formulary. The plan would deal with the review of non-formulary drug requests and a process for switching the enrollees to therapeutically appropriate alternatives if a medical necessity determination for the patient failed. The plans have to develop an appropriate transition process for enrollees who are coming from other programs and the current drugs are not in the new sponsors formulary.
USP (United States Pharmacopoeia): The organization responsible for the development of the formulary category and class structure. Plans that utilize the USP formulary categories and classes will satisfy the nondiscrimination requirement.
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