Medicare Part D: 15 Years Later

LTC Pharmacy Nearly Left Out

Three minute read: Looking back on the implementation of Medicare Part D in nursing homes.

It hardly seems possible, but we just completed the first 15 years of the Medicare Drug Benefit. Those of you who were around between 2003, when the Medicare Modernization Act was passed, and 2006, when the benefit became available, will recall what a challenging time that was.

First off, many (including me) were skeptical about how, or if, this would work. The idea wasn’t popular with Medicare beneficiaries. A poll taken just before President Bush signed the landmark bill into law revealed that nearly half (47%) of Medicare beneficiaries were not in favor of it.

The LTC Pharmacy industry was busy throughout 2003 trying to get members of Congress to include protections for nursing home residents in the final bill. We were largely unsuccessful in that effort, achieving only a mandated study by CMS to review the standards of practice for long-term care pharmacy services. It didn’t seem like much at the time, but it turned out to be important for what came next.

Implementing the Drug Benefit: The Regulation

After the law was passed CMS got busy putting together the regulation to implement the benefit. A group of representatives of the LTC pharmacy industry was quickly assembled and we got to work setting up meetings with CMS to advocate for protections for nursing home residents. We were encouraged that CMS was open to our input and the information we provided.

The report mandated in the statute was entitled CMS Review of Current Standards of Practice for Long-Term Care Pharmacy Services. The document was prepared by Lewin Associates under contract to CMS and provided validation for what the industry had been discussing with CMS. Issues covered in the report included the services provided by LTC Pharmacies, what pharmacies typically charged for these services and the financial cost would be to the nursing homes if they had to provide these services.

The Final Rule: LTC Pharmacy Recognized

The final rule created access standards for LTC residents and included requirements that Prescription Drug Plans (PDPs) had adequate numbers of LTC pharmacies to provide services to LTC residents enrolled in their plans. CMS defined LTC Pharmacies as pharmacies owned or under contract by a long-term care facility to provide pharmacy services to the facility’s residents. Long-Term Car was defined as an institution that was paid for under the Medicaid program. This was a bit of a disappointment in that many advocates hoped that assisted living facility residents would receive the same protections as nursing homes.

The Long-Term Care Guidance

Perhaps one of the most helpful documents produced by CMS wasn’t part of the regulation but was originally drafted as a guidance document. Published in March of 2005, the Long-Term Care Guidance itemized the specific services that PDPs were required to provide to residents of LTC facilities. This is a 10-item list that included 24-hour access to a pharmacist, delivery, and specialized packaging. The document is now included in Chapter 5 of the Medicare Prescription Drug Benefit Manual, and forms the basis for LTC pharmacy dispensing fees in Part D.

A Rocky First Year

At no time was CMS more helpful than when the benefit rolled out in January 2006. As we had warned, PBMs that were working with PDPs had little experience in the LTC environment. Contrary to CMS instruction plans began to impose prior authorization, quantity limits and step-therapy requirements that caused claims to pile up in every LTC pharmacy in the country.

Industry representatives had phone conferences every week (sometimes twice weekly) with CMS to discuss bottlenecks and problems we were experiencing with the new system. CMS was responsive and we eventually found the problems diminishing.

Things are smoother now, and CMS was a big part of its success, as were the pharmacy managers that stepped up to serve.

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