PHPC Expresses Concerns over Draft CMS Guidance on the Role of PAPs

and Safety Net Pharmacies in the new Medicare Rx Benefit

 

 

The Centers for Medicare and Medicaid Services (CMS) have released two draft documents addressing the roles that safety net pharmacies and manufacturer-sponsored patient assistance programs (PAP) will play in the new Medicare prescription drug benefit.  The two documents—a draft Coordination of Benefits (COB) guidance and a question and answer document on PAPs— limit the degree to which a Medicare Part D enrollee may count financial assistance provided by a safety net pharmacy or PAP toward his or her true out-of-pocket expenses (TrOOP). In particular, under the draft guidelines, waivers of coinsurance and deductible amounts by safety net providers, including 340B hospitals, would not count towards the TrOOP expenditures needed by an enrollee to trigger catastrophic coverage under Part D.  The documents also propose to limit an enrollee's ability to count PAP assistance from a pharma company towards TrOOP to the pharma company's cost of manufacturing the drug (which would be extremely difficult to determine--and a strong disincentive for pharma companies to supply free drugs), rather than the retail or contracted reimbursement price of the drug.

 

The draft COB document can be found at http://www.cms.hhs.gov/pdps/cob.asp.

 

PHPC's comments to CMS relayed the importance of PAP programs to safety net providers and the low-income patients they serve.  Besides expressing a concern that the guidance could have a "chilling effect" on manufacturers' institutional PAP programs, PHPC maintains that the guidance contained in the two draft documents conflicts with both prior CMS statements on waivers of coinsurance and the Part D statute and regulations.  Based on these concerns, we encouraged CMS to amend both draft documents to clarify that waivers of coinsurance provided by safety net providers as part of institutional PAPs be given full credit when calculating enrollees' TrOOP and to clarify that institutional PAPs may be structured in compliance with fraud and abuse laws so as not to discourage pharmaceutical companies from offering this important assistance to needy Medicare beneficiaries.

 

PHPC’s Comments can be found here.