In April of this year, we wrote about the confusion that would ensue from a CMS regulation that would require that hospice providers be responsible for all medications dispensed to patients under their care who were also Medicare Part D recipients. The exception to this requirement would occur only if it could be determined that the medication was unrelated to the terminal condition. To do so, the hospice, physician, beneficiary or their agent would be required to contact the Medicare Part D sponsor and submit a form for prior approval, allowing the claim to be processed and the medication to be paid through Part D. After being in effect for roughly two months, on Friday July 18, the regulation was largely reversed.

We applaud CMS’ quick action to reverse its decision; however, we cannot say that we were surprised that they needed to do so. In the July 18 document, CMS claims their latest action is due to the “operational challenges” imposed by the original edict (a phrase used four times in the first four paragraphs of the memo). They cite the input of “Beneficiary advocates, hospice providers, Part D sponsors/pharmacy benefit managers and pharmacies.” Although they did not specifically state as much, reaction from the field has indicated that the process was a burden on all parties and was resulting in confusion as to who was responsible to resolve issues and delays in patients receiving medication.

The original impetus to make hospices responsible for virtually all medications dispensed to patients under the benefit came from a June 2012 report from the DHHS Office of the Inspector General which indicated that “Medicare may be paying twice for prescription drugs for hospice beneficiaries, who in turn could also be paying unnecessary co-payments for prescription drugs.” Hospice is required to cover all medications related to the hospice diagnosis. At the time a patient is placed on service, the hospice is required to conduct and document a patient specific written comprehensive assessment which would include all medications the patient is taking and whether or not each drug is related to the hospice diagnosis (and thus the responsibility of the hospice). This information is relayed by the hospice to their contracted pharmacy benefit manager who in turn notifies the patient’s pharmacy as to which drugs the hospice will bear responsibility. In this writer’s opinion, one source of the problem that raised the eyebrows of the OIG stems from the fact that hospice patients do not live in a bubble nor do they sit and wait for death once they enter hospice. Although suffering from a terminal diagnosis, many continue to see physicians for conditions related and unrelated to that diagnosis. Medications are changed and added, sometimes without the knowledge of the hospice provider. A patient could use multiple pharmacies, not all of which could be aware of the hospice status. Pharmacy computerized profile systems do not always flag a patient as a hospice recipient nor prevent new medications from being dispensed due to whether or not they are diagnosis related. As a result, related or possibly related medications can be inadvertently billed to Medicare Part D. While this issue is real, the solution proved too cumbersome due to the number of entities involved. The patient and/or their beneficiary, physician, hospice, pharmacy benefit manager, pharmacy, Part D sponsor, and (if the patient resided in a nursing home or other long term care setting) facility staff would all have to be aware of the regulation and work in coordination in order to ensure that the patient received their medication in a timely manner and the correct entity billed. It just is not practical.

Another problem cited in the July 18 document is patients who are live discharges from hospice who attempt to get medications covered by Part D and are denied coverage due to a delay in the Plan receiving and processing the change in status. In fact, CMS states that 70% of all medication related hospice beneficiary complaints relate to hospice election/termination and they urge timely filing of this information by hospice providers.

The revised regulation still requires hospice to be responsible for all hospice diagnosis related medications, but limits the need to get a medication exempted from hospice coverage to only four common drug categories – analgesics, antinauseants, laxatives and antianxiety medications. In other words, if a patient is on hospice, the Part D sponsor would reject claims for all medications in these drug classes unless a prior authorization was requested and approved. Since most laxatives are non-prescription and thus not covered under Part D, and many antianxiety medications are chemically in the class of drugs known as benzodiazepines (which are also excluded by law from Part D coverage) this change greatly reduces the need for prior authorizations.  

If we have any issues with this revised regulation, they relate to the latitude being given Part D sponsors and the burdens still made on hospice organizations. The Plans are “strongly encourage(d)” to limit the prior authorization process to these four categories, and given until October 1, 2014 to implement the change. Hopefully, this process has been so onerous to the Plans that they will accept this recommendation and move quickly to make the necessary program changes to their systems. CMS also “strongly encourage(s)” hospice providers to provide a “compassionate first fill for any medication needed by a beneficiary who is experiencing difficulty in accessing the drug at POS” (point of sale). While we realize that hospice companies by their very nature are compassionate, this can be an expensive proposition, especially when it is the Part D provider who has control of making changes to their programs and processing changes in patient status.  CMS also expects the hospice to report hospice election directly to the Part D sponsor, identify drugs in the four categories determined to be coverable under Part D (prior to the submission of any claim!), and “negotiate repayment” of any claims paid in error by the Plans. Indeed, the memo states that the plans and the hospices “should implement processes to handle payment resolution directly with hospice providers…without requiring the pharmacy reverse and rebill the original claim in the retail setting.” (There is a somewhat confusing addendum involving long-term care pharmacies.) It would do well to point out that, unlike pharmacies, the hospices and the Plans do not have contractual relationships that would dictate any of these interactions. We feel that this is not the best way to proceed and we urge the hospice industry to petition CMS to revise this stance and require the pharmacies (which do have a contractual relationship with hospice) to reverse and rebill the hospice.