Part D Enrollees Guaranteed Stable Formularies

A new CMS policy on Medicare Part D plans' formularies may mean less prescription-related paperwork for physicians -- at least for the rest of 2006. The policy requires Part D plans to continue covering medications for Medicare enrollees, even if the companies drop the drugs from their formularies.

"Formulary stability is extremely important so that enrollees maintain access to the benefit they chose during enrollment as represented to them by the plan," says an April 26 memorandum to Part D plan sponsors. "… Under Part D, no beneficiaries will be subject to a discontinuation or reduction in coverage of the drugs they are currently using, except for clear scientific and cost reasons, including the availability of a new generic version of the drug or new FDA or clinical information."

As a result, Medicare patients are assured of continued coverage for drugs that had been on a plan's formulary when the patient enrolled. The previous policy allowed plans to change their formularies by dropping drugs, changing copayments or instituting utilization management requirements every 30 days. Patients, however, could not change their Part D plans for a year.

To date, CMS has received 4,600 requests from drug plans wanting to change their formularies, said CMS Administrator Mark McClellan, M.D., Ph.D., in an April 26 article in The New York Times. Of that number, about 3,100 involved adding drugs or making small changes, and 1,500 involved significant changes that would be affected by the new policy, which already has gone into effect.

The new policy responds to patient advocates' and lawmakers' concerns about possible "bait-and-switch" ploys, in which Part D plans could promise coverage of a particular drug to potential enrollees but then drop coverage for that drug after patients had signed up for the plan.

"Medicare beneficiaries select Part D plans, in part, based on the formulary that is marketed during annual open enrollment and, therefore, have a legitimate expectation that they will have continuing access to coverage of the Part D drugs they are using throughout the plan year," the memorandum says.

The new policy will be in effect at least through 2006, and CMS "expects that Part D plans will continue to comply with this policy in 2007 and subsequent plan years, and will include such assurances in their future bids and contracts," says the memorandum.

On April 27, Sen. Max Baucus, D-Mont., ranking minority member of the Senate Finance Committee, introduced the Medicare Prescription Drug Simplification Act of 2006, S. 2665, a bill designed to simplify choices, stabilize formularies and increase plan transparency. Among the bills' provisions: