<nobr>Dec 3, 2004</nobr>

ERIC: CMS Releases Draft Formulary Guidance Today RE: New Medicare Prescription Drug Program

We just received the draft formulary guidance and a fact sheet from the Centers for Medicare and Medicaid Services (CMS) regarding the new Medicare prescription drug program (attached and below). ERIC commented on the drug formularies, generally, in its October 4, 2004 submission to CMS (attached) and will take a close look at the new guidance. CMS invites public comment on this draft guidance. Final formulary guidelines will be published in early 2005. Please contact Edwina Rogers at 202-789-1400 or erogers@eric.org with any questions or comments on the new draft guidance.

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From CMS on December 3, 2004:

The Medicare Modernization Act's addition of a prescription drug benefit represents a landmark improvement in the health care coverage available to Medicare beneficiaries. The formulary review is part of CMS's broader review of the design of the plan and its benefits. For the final regulation CMS is considering policies to assure beneficiaries have access to covered drugs that are medically necessary, while enabling plans to design and manage their formularies to provide the most affordable benefit possible.

CMS will achieve this by approving formularies that give all Medicare beneficiaries access to the kinds of drug formularies already providing effective drug coverage to millions seniors and people with disabilities through existing drug plans, such as those covering federal employees, private sector retirees and "dual eligible" beneficiaries in state Medicaid programs. CMS will look to approve formularies and benefit management approaches that are currently working in these drug plans, and will use comparisons to widely-used national standards, guidelines, and existing formularies as checks on the comprehensiveness of these formularies. CMS believes beneficiaries can gain from the application of these widely used approaches to Medicare prescription drug benefit plans. CMS will support the use of USP model classes and categories for plans that choose to use them, though plans are not required to do so, and CMS oversight includes many other aspects of the drug benefit in addition to the classification system.

The MMA is designed to enable prescription drug plans to offer comprehensive drug coverage by providing flexibility. The goal, however, is not to save money at the expense of appropriate medical care. Plans would be expected to accommodate widely applied guidelines and support current treatment options for conditions such as asthma, diabetes, behavioral health and psychological disorders, lipid disorders, hypertension and HIV.

The CMS formulary review will follow four important principles:

1. Rely On Existing Best Practices: CMS' review will rely on widely recognized best practices for existing drug benefits serving millions of seniors and people with disabilities to ensure non-discriminating, appropriate access.
2. Provide Access to Medically Necessary Drugs: We will require that drug plans provide access to medically necessary treatments for all and do not discriminate against any particular types of beneficiaries based on their expected drug costs.
3. Flexibility: CMS will allow plans to be flexible in their benefit designs to promote real beneficiary choice while protecting beneficiaries from discrimination.
4. Administrative Efficiency: CMS will set up a process to conduct effective reviews of plan offerings within a compressed period of time.

CMS invites public comment on this draft guidance. Final formulary guidelines will be published in early 2005.

Text Files:

Draft Formulary Guidance

Formulary Fact Sheet


Websites:

ERIC October 4th Medicare Comments

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