Can Pharmacy Squeeze the Devil Out of the Medicare Part D Details?

JUNE 01, 2005
Ken Rankin

When the new Medicare Part D prescription drug benefit takes effect on January 1, 2006, the nation's pharmacists will begin playing a broader and more meaningful role in the delivery of health care services. The medication therapy management (MTM) services that pharmacists (and other health care providers) will be encouraged to offer under that program pack the promise of improved outcomes for millions of seniors, reduced health care costs for patients and taxpayers, and a more satisfying practice for pharmacy professionals.

Additionally, Part D will open the door for pharmacists to secure reimbursement for nondispensing activities, including patient counseling, disease management, and other MTM services.

Pharmacy leaders agree that the Medicare Modernization Act's MTM requirements represent a positive step forward for the profession. Yet, both pharmacists and patients will face a number of challenges under this new initiative.

For pharmacy, one of the most troubling aspects of the MTM regulations laid down earlier this year by the Centers for Medicare and Medicaid Services (CMS) is the agency's failure to establish any reimbursement standards for pharmacists who provide these services to patients. Instead, pharmacy benefit managers and other sponsors of the prescription drug plans (PDPs) that will administer Part D benefits will have a free hand in establishing compensation levels for MTM services. Although these plans will be required to disclose and explain the fees they pay to pharmacists for MTM, the government will not require any specific reimbursement for these services.

Futhermore, pharmacists who are dissatisfied with the MTM fees, or who believe that they are being shortchanged by the drug plan, will not be able to count on any help from Washington. In their final rules, CMS officials made it clear that "we will not adjudicate any specific disputes" between pharmacists and drug plans over payments for MTM services. In view of the difficulties pharmacists have faced securing fair reimbursement for their services under Medicaid during the past 40 years, pharmacy's lack of MTM fee-negotiating leverage under the new Medicare drug benefit does not bode well for the profession.

Identifying Medicare beneficiaries who qualify for MTM services may be a potentially serious source of confusion for the new drug program. The broad parameters of patient eligibility for these services are spelled out in both the law and the final CMS regulations establishing the prescription benefit. To be eligible to receive MTM services, the patient must suffer from multiple chronic diseases (eg, diabetes, asthma, hypertension); must be taking multiple prescription drugs covered by Part D; and must be identified as incurring more than $4000 in annual Part D drug expenses.

So far the regulations seem fine, but issues are certain to surface as prescription drug plans begin to design MTM programs and pharmacists begin to implement them:

  • How many chronic diseases must a patient suffer from in order to be targeted for MTM services?
  • What constitutes a "chronic" condition for the purposes of this eligibility test?
  • How many Part D prescription drugs must a patient be taking in order to qualify?

These are questions that CMS declined to answer in the final rules that created Part D. As a result, each individual prescription drug plan will establish its own specific standards for MTM eligibility—an approach likely to create considerable confusion among Medicare beneficiaries.

The rules also open the door for controversy in other areas of the process for targeting patients for MTM services. Pharmacists (and patients themselves) may play a key role in screening, identifying, and referring Medicare beneficiaries for MTM—but only if the policies of the patient's PDP permit such involvement.

As a result, some plans may invite pharmacists to assume a lead role in targeting Medicare beneficiaries for MTM services; others may allow pharmacists to play a more limited part in the identification of eligible patients; and still others may lock pharmacists and patients out of the process altogether.

As untidy as these procedures seem to be, the process for identifying MTM-eligible patients will not be nearly as bad for pharmacists as it would have been a decade ago, before pharmacy computerization streamlined third-party processing chores. CMS officials expect drug plans to use "system edits" (computerized notices that appear on the pharmacists'computer when a beneficiary fills a prescription) to provide pharmacists with instant verification of each Medicare beneficiary's eligibility for MTM services.

Computers, however, will not eliminate all of the potential pitfalls facing pharmacists under the new Medicare drug benefit. Pharmacists, PDP sponsors, and government officials will have to work together if the promise of MTM is to be realized.

Mr. Rankin is a freelance medical writer.