Life Science Compliance Update

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November 07, 2017

MedPAC Discusses Part D Exceptions and Appeals Process


On October 6, 2017, the Medicare Payment Advisory Commission (MedPAC) met for its October meeting, where it discussed recent information about Medicare Part D exceptions and appeals. Also discussed were the potential benefits and obstacles to the adoption of electronic tools, such as real-time prescription benefit checks and electronic prior authorization that have the potential to reduce the need for the exceptions and appeals process.

MedPAC commissioners were supportive overall for the adoption of electronic tools to streamline efforts, but stopped short of making specific recommendations due to lack of reliable data.

MedPAC Senior Analyst Jennifer Poldulka outlined the exceptions and appeals process for Medicare Part D beneficiaries, noting that enrollees may request a formulary or tier exception for purchase of a specific drug. She said that plans are required to report data on transactions that are rejected at the point of sale and outcomes of the determination and redetermination appeal steps. Ms. Poldulka said that few pharmacy transactions are appealed to plans for coverage determinations or redetermination and that the plan decisions typically favor the enrollee, based on 2015 data.

It was noted that the most common Part D pharmacy transaction rejections happen when a drug is classified as a non-formulary drug. Ms. Poldulka found that only five percent of redeterminations were appealed to the Independent Review Entity (IRE), and that the IRE usually upholds plans’ redetermination decisions. However, Ms. Poldulka cautioned that not all Part D plan data must be reported, and that some data that is reported does not pass CMS data validation standards. She also mentioned that MedPAC found variations in reported pharmacy transaction rejections and determinations, redeterminations, and IRE outcomes.

MedPAC Research Assistant Emma Achola highlighted four electronic prescribing tools that can be used to help streamline the exceptions and appeals process:

(1) electronic prescribing (eRx);

(2) formulary look-up;

(3) real-time prescription benefit (RTPB) check and;

(4) electronic prior authorization (ePA).

Ms. Achola focused on ePA, noting that it is the most complete option, though there are “significant” obstacles with full adoption of ePA. She said that in order for ePA to operate efficiently, multiple actors within the healthcare system must effectively coordinate. She pointed out that the large number of electronic health record (EHR) and ePA vendors make data integration difficult. Additionally, she cautioned that clinicians may bear additional costs and must embrace practice pattern changes in order for an ePA model to succeed.

Commissioner Discussion

Commissioner Jack Hoadley of Georgetown University highlighted the need for a “good, effective” solution to the appeals process and that data limitations make it difficult to make sense of what the numbers actually mean. He was supportive of ePA, noting that he is encouraged by the technology and believes that it can be a “good route” to improving the exceptions and appeals process.

Commissioner Amy Bricker of Express Scripts called for a requirement centered around eRx. She noted that eRx gives the clinician more control and provides an effective solution for all parties involved. Ms. Bricker said that she is a big proponent of ePA, noting that it’s a “great” way to solve issues such as delays and physician workload, but that there would need to be an adequate incentive model for physicians to participate.

Commissioner Pat Wang of Healthfirst complimented the array of electronic tools that are available. She noted that the key issue is integration of planned formulary rules into EHRs so that the data is found on one platform, saying that the only way to get full adoption of ePA is to make it as easy as possible for the prescriber. She encouraged more discussion about the technology that currently exists within EHR vendors, and how it can be properly integrated into ePA.

Commissioner Dana Gelb Safran of Blue Cross Blue Shield of Massachusetts and Commissioner Kathy Buto both spoke to their support of ePA. Commissioner Craig Samitt of Anthem said that prior authorization is an area of “angst,” noting that it is a costly process for also supports ePA, but cautioned that finding a method to both mandate and incentivize these techniques raises issues. Mr. Samitt encouraged a broader conversation as to the best ways to advocate for eRx and ePA, questioning if there is an existing business model that captures this successfully.

Commissioner Rita Redberg of UCSF called the process for eRx “strenuous” and “not user friendly. She noted that it is likely that doctors would retire before they adjust their practices to account for technological disruption. Dr. Redberg also said that there are much bigger issues within prior authorization that are of concern to physicians and beneficiaries.

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