By John Cattie
CHARLOTTE, NC -
On June 2, 2009, CMS posted guidance on its website intended to clarify its Memo dated April 3, 2009, which announced that CMS will begin independently pricing future prescription drug treatment costs/expenses in Workers’ Compensation Medicare Set-aside Arrangements (“WCMSAs”). This guidance touches upon the following topics:
1) Source for Evaluation of Sufficiency of WCMSA Prescription Drug Component: CMS will use RED BOOK® Drug References to evaluate the sufficiency of the prescription drug component of WCMSAs.
2) Documentation: CMS stresses that proposals submitted to it should furnish accurate, complete, legible and current medical and prescription drug records from the previous two (2) years in connection with the workers’ comp injury/illness/accident/disease.
3) Tapering of Use: CMS will consider all evidence when the treating physician believes tapering of prescription drug use is possible and is in the best interests of the beneficiary.
4) Expiration of Patents: CMS understands that: a) patents for brand name drugs expire; b) less expensive generics become available thereafter; c) more expensive brand names often replace the brand name drug whose patent is expiring; and d) beneficiaries may insist on brand name drugs even when generics are available. CMS takes all of this into account when determining the sufficiency of the WCMSA proposal.
5) Off-Label Use: CMS recognizes that off-label use of medications is common and accepted. Physicians are free to prescribe drugs for any purpose that, in their professional opinion, is both safe and effective.
6) Utilization Review: CMS will consider utilization review reports indicating that a beneficiary should be taking none, fewer, different or less frequent drugs. However, reports of actual drug use from treating physicians will be given more weight than these utilization review reports.
7) Brand or Generic: CMS will price based on the type of drug stated in the WCMSA proposal. If the WCMSA proposal is silent or unclear or both versions exist, then CMS will compare the WCMSA proposal to the generic drug where the submitter has proposed a generic drug, and will compare the WCMSA proposal to the brand name drug where the submitter has proposed a brand name drug or has not proposed a drug at all.
8) Multiple Manufacturers: If the WCMSA proposal lacks supporting documentation concerning prices from generic drug manufacturers, CMS will compare those generic drugs in the WCMSA proposal and use the lowest priced generic drug as listed in the RED BOOK® Drug References in accordance with the April 3, 2009 Memo.
This document clarifies how CMS calculates amounts related to prescription drugs. It also warns practitioners that, in creating WCMSAs, the beneficiary should be careful to properly consider Medicare’s interests as it relates to prescription drugs. WCMSA proposals which gloss over the applicable prescription drugs may be found to be insufficient, thus leading to additional costs to properly consider Medicare’s interests for you and your clients.
To view the Memo in its entirety, click here.
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