[Federal Register Volume 69, Number 124 (Tuesday, June 29, 2004)]
[Notices]
[Pages 38898-38906]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-14673]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-5025-N]
RIN 0938-ZA51
Medicare Program; Medicare Replacement Drug Demonstration
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Notice.
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SUMMARY: This notice announces the implementation of a demonstration
that would pay through December 31, 2005 under Medicare Part B for
drugs and biologicals that are prescribed as replacements for existing
covered Medicare drugs and biologicals described in section
1861(s)(2)(A) or 1861(s)(2)(Q), or both, of title XVIII of the Social
Security Act. Under this demonstration certain self-injected or oral
drugs that are not normally covered under Medicare Part B would be
covered if they were a replacement for a non self-administered drug or
biological normally provided in a physician's office. The statute
requires cost sharing in the same manner as Medicare Part D. No more
than 50,000 patients may be covered under the demonstration and total
funding is limited to $500 million.
ADDRESSES: Mail: Written inquiries regarding this demonstration must be
submitted by mail to the following address: Centers for Medicare &
Medicaid Services, Attn: Jody Blatt, Division of Payment Policy
Demonstrations, Office of Research, Development, and Information,
Centers for Medicare & Medicaid Services, C4-15-27, 7500 Security
Boulevard, Baltimore, Maryland 21244-1850. Please allow sufficient time
for mailed information to be received in a timely manner in the event
of delivery delays.
E-mail: Inquiries may be sent to the following e-mail address:
[email protected]. Because of staffing and resource
limitations, we cannot accept applications by facsimile (FAX)
transmission.
[[Page 38899]]
FOR FURTHER INFORMATION CONTACT: Jody Blatt, (410) 786-6921 or
[email protected].
SUPPLEMENTARY INFORMATION:
I. Background
Section 641 of the Medicare Prescription Drug, Improvement and
Modernization Act of 2003 (MMA) (Pub. L. 108-173) provides for a
demonstration that would pay under Medicare Part B for drugs and
biologicals that are prescribed as replacements for existing covered
Medicare drugs and biologicals described in section 1861(s)(2)(A) or
1861(s)(2)(Q), or both, of title XVIII of the Social Security Act (the
Act).
For example, under this demonstration certain oral or self-injected
drugs that are not normally covered under Medicare Part B would be
covered if they were a replacement for a non-self-administered drug or
biologic that is normally provided in a physician's office or an oral
chemotherapeutic drug or biologic agent that is currently covered by
Medicare under Part B. The legislation requires cost sharing in the
same manner as Medicare Part D. No more than 50,000 patients may be
covered under the demonstration and total funding is limited to $500
million. The demonstration is to commence with the acceptance of
applications in July 2004 for coverage starting in September or October
2004. The demonstration will terminate December 31, 2005. In 2006,
these drugs will be covered under Part D of Medicare for all those
beneficiaries who elect to enroll in Part D.
II. Provisions of the Notice
A. Covered Drugs
In order to determine what drugs shall be covered under the
demonstration, we established an inter-agency panel of clinicians to
determine the criteria for defining what constitutes a ``replacement''
drug as provided in section 641 of the MMA. An initial set of criteria
were shared with the public at an Open Door Forum held at CMS. Based on
feedback received at this forum and subsequently in writing, the
criteria have been modified. We are adopting the criteria proposed by
this interagency panel as modified and have determined that, to be
covered under this demonstration, a drug/biological must meet all of
the following criteria:
1. A drug or biological covered under this demonstration must meet
the statutory requirement of being a replacement by eliminating the
concurrent need for a currently covered drug or biological for a
currently covered indication.
2. Coverage of the drug or biological in the demonstration is
limited to FDA approved indications and, for any drug with an existing
FDA approved indication, any additional indication if such additional
indication is being reviewed by the FDA; and the requester has received
documentation from the FDA that no filing issues remain.
3. The drug must be at least of equal efficacy to the covered drug
for which it is a replacement.
4. Use of the drug represents an advantage in terms of access and/
or convenience for patients compared to the currently covered drug.
5. Drugs are not eligible for coverage under this demonstration if
the drug they are replacing is not commonly provided incident to a
physician service (for example, anti-hypertensives, antibiotics, oral
hypoglycemics, etc.).
These criteria are consistent with the statutory requirement under
section 641(a) of the MMA that the demonstration include only drugs and
biologicals that are replacements for drugs currently covered under
Part B. Although the statute does not explicitly require us to cover
all drugs and biologicals prescribed as replacements for drugs
currently covered under Part B, we nevertheless considered doing so.
However, in light of the legislative directives limiting funding for
the demonstration to $500 million and enrollment in the demonstration
to 50,000 beneficiaries, we concluded that this demonstration's limited
resources should be allocated so as to maximize the aggregate benefit
to the Medicare population. We believe the criteria set forth above
achieves this by focusing resources on those drugs or biologicals that
have proven efficacy for the conditions indicated as well as
significantly improve access to important medications for severely ill
beneficiaries. Using these criteria, we have identified the following
drugs/biologicals as covered under this demonstration for the following
conditions:
Drugs Covered Under the Medicare Replacement Drug Demonstration
------------------------------------------------------------------------
Drug/biological--compound name
Demonstration covered indication (brand name)
------------------------------------------------------------------------
Rheumatoid Arthritis................... Adalimumab (Humira).
Anakinra (Kineret).
Etanercept (Enbrel).
Multiple Sclerosis..................... Glatiramer acetate (Copaxone).
Interferon beta--1a (Rebif,
Avonex).
Interferon beta--1b
(Betaseron).
Osteoporosis (patient must be Calcitonin--nasal (Miacalcin--
homebound). nasal).
Pulmonary Hypertension................. Bosentan (Tracleer).
Secondary Hyperparathyroidism.......... Doxercalciferol (Hectoral).
Paget's Disease........................ Alendronate (Fosamax).
Risedronate (Actonel).
Hepatitis C............................ Pegylated interferon alfa-2a
(Pegasys).
Pegalated interferon alfa-2a
(PEG-Intron).
CMV Retinitis.......................... Valcyte (Valganciclovir).
Anti-Cancer
Cutaneous T-cell Lymphoma.......... Bexarotene (Targretin).
Non-small cell lung cancer......... Gefitinib (Iressa).
Epithelial ovarian cancer.......... Altretamine (Hexalen).
Chronic Myelogenous Lymphoma....... Imatinib Mesylate (Gleevec).
GI Stromal Tumor................... Imatinib Mesylate (Gleevec).
Anaplastic astrocytoma............. Temozolomide (Temodar).
Multiple Myeloma................... Thalidomide (Thalomid).
Breast Cancer...................... Hormonal therapy.
Stage 2-4 only................. Anastrozole (Arimidex).
Exemestane (Aromasin).
[[Page 38900]]
Letrozole (Femara).
Tamoxifen (Nolvadex).
Toremifene (Fareston).
------------------------------------------------------------------------
We will consider covering additional drugs if they meet the
criteria specified above and if the enrollment and/or funding limit for
the demonstration has not been reached or is projected to be reached
before the end of the demonstration.
If you believe that another drug/biological should be considered
for coverage under this demonstration, please submit your request,
along with all required supporting documentation, in writing as
specified below.
Requests for consideration must explicitly list the drug/biological
to be covered (trade and generic names), manufacturer, FDA approved
indication(s), intended disease(s) and/or patient populations for the
demonstration project (including a reference to the applicable
treatment guideline, for example, the National Comprehensive Cancer
Network (NCCN) guideline), typical dosing pattern in each relevant
patient population, the Part B covered drug/biological that will be
replaced, and how it meets each of the criteria noted above.
Additionally, you must submit information describing the projected
average annual cost of the medication following typical dosing patterns
and any savings that Medicare might realize as a result of using this
drug/ biological as a replacement. Those requesting inclusion of a drug
or biological that has not yet received FDA approval for the proposed
indication but otherwise meets all of the criteria must submit a letter
from the FDA verifying that the FDA has received all of the data it
needs to complete its review and that no further filing issues remain.
B. Implementation
We have entered into a contract with TrailBlazer Health
Enterprises, L.L.C. (TrailBlazer) to handle eligibility determination,
enrollment and claims processing for this demonstration. Under this
arrangement, TrailBlazer will subcontract with Advance PCS, a Caremark
Company (Caremark), to provide pharmacy benefit management (PBM)
services.
Starting July 6, 2004, TrailBlazer will begin accepting
applications to participate in this demonstration. Applications may be
downloaded from our Web site: http://www.cms.hhs.gov/researchers/demos/drugcoveragedemo.asp or obtained by calling 1-866-563-5386 any time
after 8 a.m. Eastern time on July 6, 2004. Calls prior to that time
will not be accepted. Applications must be received by 5 p.m. Eastern
time September 30, 2004. Applications received by August 16, 2004 will
be eligible for an early selection process for coverage under the
demonstration effective September 1, 2004.
Applications will be considered under two categories: (1) Those
seeking coverage for a covered cancer drug and (2) those seeking
coverage for any other replacement drug covered under the
demonstration. The purpose of creating two enrollment categories is to
insure that at least 40 percent of the available funding goes toward
oral cancer treatments as specified in the Medicare Modernization Act
of 2003 ``Conference Agreement.'' If more persons submit applications
than we believe we can accommodate because of the limits for either or
both of the enrollment categories specified, participants will be
chosen on a random basis among all completed applications received.
Notification to applicants of their status regarding participation in
the demonstration will be sent out by October 13, 2004. For those
participating in the demonstration, coverage will be effective October
18, 2004.
If fewer applications are received than the maximum number of
enrollees permitted or than can be covered within the projected funding
limits, then all eligible beneficiaries who have submitted applications
by the deadline will be enrolled in the demonstration with an effective
date of October 18, 2004. To the extent that enrollment slots remain
unfilled and we project available funding for additional participants,
additional applications will be considered on a rolling basis after
that date, although we do not anticipate this will occur.
Those selected to participate will receive a ``welcome packet''
from Caremark including information on how to fill their prescriptions
as well as supplemental information about their demonstration pharmacy
benefit.
C. Eligibility
In order to be eligible for participation in this demonstration, a
beneficiary must meet the following criteria:
The beneficiary must have Part A and Part B.
Medicare must be the beneficiary's primary health
insurance.
The beneficiary must reside in one of the 50 states or the
District of Columbia.
Beneficiaries who are members of Medicare Advantage or other
Medicare coordinated care health plans as well as those covered under
the traditional Medicare Fee-For-Service program are eligible to
enroll.
Because a primary purpose of this demonstration is to increase
access to important medications in advance of the full implementation
of the Medicare Part D drug benefit in 2006, those beneficiaries who
already have a comprehensive drug coverage plan will not be eligible to
enroll. This includes beneficiaries who are covered under Tricare, the
PACE program under section 1894 of the Act, and most Medicaid and SCHIP
plans, as well as those who are covered under a comprehensive Medicare
Advantage plan or an employer or union sponsored retiree plan. However,
beneficiaries without any drug coverage and beneficiaries with more
limited drug coverage, such as that offered by Medicare supplemental
(employer-sponsored prescription drug coverage (or other alternative
coverage)) plans and some Medicare Advantage or other Medicare
coordinated care health plans, are eligible to apply for participation.
Beneficiaries who are eligible for VA benefits are also eligible to
apply for this demonstration if they do not use their VA benefits to
pay for medications. Beneficiaries with questions about eligibility may
contact 1-866-563-5386. Beneficiaries who have a Medicare sponsored
discount drug card may participate in the demonstration, but they may
not use the card to pay for drugs or biologicals covered under the
demonstration. A separate demonstration specific card will be issued to
beneficiaries participating in this demonstration.
In order to apply for this demonstration, a beneficiary must
[[Page 38901]]
obtain certification from their physician stating that the beneficiary
(1) has a medical condition for which coverage of the demonstration
drug is allowed under the demonstration and (2) either the physician
has already written a prescription for the demonstration drug for the
beneficiary or intends to do so if the beneficiary is enrolled in the
demonstration. The beneficiary does not need to be taking either the
demonstration drug or a specific Medicare Part B covered drug in order
to be eligible for this demonstration. Beneficiaries who are newly
diagnosed and/or for whom the covered drug is prescribed for the first
time during the course of the demonstration may apply at that time and
will be considered for participation in the demonstration to the extent
new applications can be considered.
Beneficiaries who participate in the demonstration will retain all
of their Medicare benefits and should follow their physician's guidance
regarding any changes in medication and/or treatment that may be
medically appropriate.
D. Beneficiary Cost Sharing
In accordance with the requirements of section 641 of the MMA, cost
sharing under this demonstration must be applied in the same manner as
the standard prescription drug benefit under Part D that will be
effective in 2006, as described in section 1860D-2(b) of the Social
Security Act (the ``Act''). However, because this demonstration will
not begin covering benefits until September, beneficiary out-of-pocket
cost sharing for 2004 will be pro-rated to approximately one-third of
the standard amount to reflect the reduced benefit year. In 2005, the
full standard cost-sharing amount will be applied.
Therefore, while beneficiaries will not be required to pay a
premium for participating in the demonstration, they will be required
to meet an annual deductible before benefits are paid. This deductible
will be applied each calendar year a beneficiary is covered, regardless
of when the beneficiary enrolls in the demonstration.
In 2005, a standard annual deductible of $250 will be applied.
After the annual deductible has been reached, the beneficiary must pay
25 percent coinsurance for the cost of each prescription until the
beneficiary has received covered replacement drugs totaling $2,250,
which includes amounts paid out of pocket by the beneficiary (the $250
deductible plus $500 worth of ``25% coinsurance'' for a total of $750)
and amounts paid by Medicare under this demonstration. Once the
beneficiary has received $2,250 in replacement drugs, the beneficiary
will be responsible for paying 100 percent of all costs of the covered
replacement drug until the beneficiary has paid an additional $2,850
for a total of $3,600 out-of-pocket. Covered replacement drug costs
paid by an individual (such as a family member) or a state pharmacy
assistance plan on the beneficiary's behalf, and low-income assistance
paid by Medicare under the demonstration on behalf of beneficiaries
eligible for such assistance (see II E. below), count toward the
beneficiary's $3,600 ``out-of-pocket limit''. Under the demonstration,
in some cases, funds provided by charitable organizations may also
count toward the beneficiary's out-of-pocket limit. However, costs for
which the beneficiary is reimbursed through insurance or otherwise, a
group health plan, or other third-party payment arrangement do not
count toward the $3,600 out-of-pocket limit. Once the $3,600 ``out-of-
pocket limit'' has been reached, the beneficiary will pay the greater
of 5 percent of the cost of the covered replacement drug or a fixed co-
payment of $2 for generic or preferred brand drugs that are multiple
source drugs (as defined in section 1927(k)(7)(A)(i)) or $5 for all
other drugs.
As noted above, due to fact that the demonstration is not starting
in 2004 until approximately two-thirds of the calendar year has passed,
out-of-pocket costs for beneficiaries who enroll in 2004 will be
reduced by approximately two-thirds. The annual deductible will be
reduced from $250 to $85. This deductible will be applied regardless of
when in 2004 a beneficiary enrolls. Once the beneficiary has met the
deductible, s/he will pay 25% of the next $660 in allowable costs until
s/he has paid an additional $165 out-of-pocket. The beneficiary will
then be responsible for paying 100 percent of the allowed cost of the
covered replacement drug until the beneficiary has paid an additional
$950 for a total of $1,200 out-of-pocket ($85 deductible plus $165 at
the 25% coinsurance level plus $950 at the 100% coinsurance level). The
table below summarizes the out-of-pocket costs under the demonstration
for 2004 and 2005.
------------------------------------------------------------------------
2004 (Sept-Dec) 2005 (Jan-Dec)
------------------------------------------------------------------------
Deductible
Standard Benefit *...... $85 $250
25% Coinsurance Range
Allowable Cost 660 2,000
of Drugs.
25% Out of 165 500
Pocket.
100% Coinsurance ``Donut''
100% Out-of- 950 2,850
Pocket Payments (in
addition to above).
Catastrophic Limit
1. Total Allowable Cost 1,695 ** 5,100 **
of Drugs.
2. Total Out of Pocket 1,200 3,600
Payments.
------------------------------------------------------------------------
* Some low-income beneficiaries, those with incomes between 135% and
150% of the Federal Poverty Level, will also have the deductible
reduced from $50 to $20 in 2004. Other low-income beneficiaries will
not pay any deductible in either year.
** Because beneficiary cost-sharing under the demonstration that is paid
for by a group health plan, insurer or otherwise, or similar third
party payment arrangement will not count toward the annual out-of-
pocket limit, the total drug spending amount that triggers
catastrophic coverage may be higher for beneficiaries with these
alternative sources of coverage.
Beneficiaries may receive their drugs on a retail or mail order
basis, but must get them through Caremark, the pharmacy benefit manager
contracting with TrailBlazer to implement this demonstration. Caremark
has a national network of pharmacies. More specific information about
the network and pharmacies available can be obtained by calling 1-866-
563-5386. Upon enrolling in the demonstration, beneficiaries will be
mailed a complete package of information, including a demonstration
identification card and instructions on how to fill their prescriptions
for the demonstration-covered drug. This card may be used
[[Page 38902]]
only for drugs covered under the demonstration.
E. Low-Income Assistance
Beneficiaries who meet the criteria specified in Part D, section
1860D-14 of the Act, for low-income assistance will be eligible for
assistance under this demonstration. Tables 1A and 1B specify the
different cost sharing requirements for the standard benefit level as
well as the different low-income options for 2004 and 2005. Table 2
identifies which benefit levels apply based on a person's annual income
and available financial resources.
Beneficiaries, or their authorized representatives, will be
required to submit an application form attesting to the beneficiary's
annual income and financial resources in order to be considered for the
subsidy.
F. Application Instructions
Starting on or before July 6, 2004, application forms will be
available from our Web site: http://www.cms.hhs.gov/researchers/demos/drugcoveragedemo.asp. Alternatively, individuals may call 1-866-563-
5386 (TTY: 1-866-5387) any time after 8 a.m. Eastern time on July 6,
2004 to have an application mailed to them. Calls prior to that time
will not be accepted.
Applications must be received by TrailBlazer by 5 p.m. eastern
time, September 30, 2004. Applications should be sent to the following
address: Medicare Replacement Drug Demonstration, c/o TrailBlazer
Health Enterprises, L.L.C., P.O. Box 5136, Timonium, MD 21094.
The application form consists of two parts. Both parts must be
filled in completely and submitted by September 30, 2004 in order to be
considered for the demonstration.
The first part of the form requests basic demographic information,
information on the drug being requested and the availability of
alternative insurance coverage for prescription drugs. Because this
demonstration is intended to increase access to prescription drugs,
beneficiaries who have comprehensive, alternative drug coverage through
Medicaid, SCHIP, the PACE program under section 1894 of the Act,
Tricare, retiree insurance, or other source are not eligible to enroll.
However, beneficiaries who have more limited drug coverage such as
under a Medicare supplement (employer-sponsored prescription drug
coverage (or other alternative coverage, including Medigap plans)) plan
are eligible to enroll. Beneficiaries who are enrolled in a Medicare
Advantage or other Medicare coordinated care health plan are also
eligible to enroll if they do not have comprehensive drug coverage
under that plan that would cover the replacement drug.
The second part of the application form is a certification from the
physician who is prescribing the replacement drug for the beneficiary.
The physician must submit this signed statement specifying that he (or
she) is prescribing or will be prescribing the medication for the
covered condition.
Beneficiaries who believe they qualify for low-income assistance
(see II.E above) must also complete and sign an attestation of income
and resources. The rules for low-income assistance, including coverage
levels and determination of eligibility, have been established to be
consistent with what will be in effect in 2006 when the Medicare Part D
drug benefit is implemented. Information submitted on the application
for low-income assistance is subject to formal verification by CMS.
Enrollment in the demonstration will be determined on a ``need-blind''
basis, that is, without regard to whether a beneficiary has also
submitted an application for the low-income subsidy. Moreover,
applications for the low-income subsidy may be submitted at any time
during the duration of the demonstration and will be considered as long
as funds are available. However, the low-income subsidy will not be
provided retroactively.
G. Submission of Written Materials
Those wishing to propose additional drugs/biologicals to be
considered for coverage under the demonstration must submit written
information documenting how the proposed drug meets the criteria
specified in section II(A) of this notice. While the format for this
information is not prescribed, we are requesting that all of the
criteria listed above be fully addressed in the materials submitted.
Written materials may be submitted by mail or e-mail to the
addresses listed above under ``Inquiries, Registration and Submission
of Information.''
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III. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995, we are required to
notice in the Federal Register and solicit public comment before a
collection of information requirement is submitted to the Office of
Management and Budget (OMB) for review and approval. In order to fairly
evaluate whether an information collection must be approved by OMB,
section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 requires
that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
[[Page 38906]]
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
Due to the following reasons, CMS requested that OMB grant OMB
emergency approval of the collection requirements associated with this
demonstration Section 641 of the MMA: (1) The statute required that
this demonstration begin 90 days after passage of the legislation,
which was March 8, 2004; (2) due to the complexities of implementing
this demonstration, CMS was unable to meet that deadline; and (3)
because of the importance of this demonstration to beneficiaries with
serious illnesses and the already delayed time frame, it was urgent
that there not be further delays.
Based on the justification referenced above for emergency approval,
with OMB concurrence, on May 19, 2004 Volume 69, Number 97, Pages
28894-28895, CMS announced the initiation of procedural requirements
set forth in 5 CFR 1320.13 to facilitate compliance with Chapter 25 of
Title 44 of United States Code. As the result, the collection
requirements associated with this demonstration, ``Application for
Participation in Medicare Replacement Drug Demonstration'', were
approved under OMB control number 0938-0924.
It should be noted that during the 180-day emergency approval
period, CMS will publish a Federal Register notice announcing the
initiation of an extensive 60-day public comment period on these
requirements. Upon completion of the 60-day comment period, we will
submit the requirements for OMB review and an extension of this
emergency approval.
Authority: Section 641 of the Medicare Prescription Drug
Improvement and Modernization Act of 2003.
(Catalog of Federal Domestic Assistance Program No. 93.778 and No.
93.774, Medicare--Supplementary Medical Insurance Program)
Dated: June 4, 2004.
Mark B. McClellan,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 04-14673 Filed 6-24-04; 3:00 pm]
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