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Processes to reimburse 2008 administration fee under Part D are still developing ... if a web-based billing mechanism is used, the HCP may not need to collect ... – PowerPoint PPT presentation

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Title: Merck

Merck Co., Inc.Summary of Medicare Part D and
  • December 2007

  • This information is intended to be an overview
  • Mercks perspective, and reflects our general
  • understanding of Medicare coverage and processes
  • vaccines. Other organizations will need to
    assess how
  • Medicare issues specifically affect their
    operations in
  • these circumstances.

  • Present basic information regarding Medicare
    coverage of vaccines
  • Describe differences between Part B and Part D
    coverage of vaccines
  • Provide information on reimbursement processes
    for Part D vaccine product costs and
    administration fees
  • Discussion of potential Part D vaccine processes
    for 2008
  • Q A

Medicare Coverage of Vaccines
  • New vaccine benefit in Part D starting January 1,
  • The Medicare Modernization Act (MMA) of 2003
    included vaccines licensed under Section 351 of
    the Public Health Service Act as Part D covered
  • CMS information describing if a vaccine is under
    Part B
  • or Part D
  • If a vaccine was previously covered under Part
    B, it will continue to be covered under Part B.
    If it was previously not covered, then it may be
    covered under Part D.
  • Information available at

Medicare Coverage of VaccinesDifferences
between Parts B and D
  • Part D
  • Copayments, deductibles and coverage gap can be
    factors for vaccines covered in Part D
  • Vaccine cost reimbursed by Part D, administration
    fee paid by Part B in 2007, and Part D in 2008
    and thereafter
  • Part D does not have well established processes
    for vaccines
  • 2007 process requires billing vaccine cost to
    Part D plan, and administration fee to Part B
  • Processes to reimburse 2008 administration fee
    under Part D are still developing
  • Part D operates on NCPDP 5.1 pharmacy claims
  • Part B
  • Covers influenza, pneumococcal and Hepatitis B
    (for high and intermediate risk individuals)
  • No beneficiary out-of-pocket costs for influenza
    and pneumococcal vaccines,
  • Copayments and deductible apply for Hepatitis B
  • Also can cover vaccines in cases of injury or
    direct exposure (e.g., tetanus toxoid)
  • Physicians bill for product and administration
    fee on standard medical claim form in
    well-established process
  • Part B has been primary vehicle for delivery of
    adult vaccines

Part D Vaccine Coverage in 2008Recent CMS
Guidance to Part D Plans
  • Final 2008 Call Letter
  • Available at http//
  • -the Call Letter describes CMS goals, provides
    new information and operational reminders to
    Medicare Advantage organizations and Part D plans
    for contract year 2008
  • Section 5 Vaccine Formulary Coverage, p. 63
  • we will review all sponsors formularies to
    ensure they contain all commercially available
    vaccines (unless excluded due to available
    reimbursement under Part B, e.g., influenza or
    pneumococcal vaccines)

Part D and Vaccines Administration Fee
  • Tax Relief and Health Care Act (TRHCA) of 2006,
    signed by the President on 12/20/06, requires
    that Medicare providers be reimbursed for
    administration fees for vaccines covered by Part
    D beginning 1/1/07
  • Per TRHCA, Part B will cover the administration
    fees in 2007, while Part D will cover for 2008
    and thereafter
  • CMS has created a G code (G0377) to be used for
    the administration of Part D vaccines in 2007.
    Part B deductibles and copayments do apply to the
    administration fee for Part D vaccines
  • Health care professionals (HCPs) administering
    Part D vaccines cannot bill Part B for
    administration fees as of January 1, 2008
  • General CMS instruction (see bullet below)
    starting January 1, 2008, is for HCPs to collect
    administration fee from patient in addition to
    vaccine product cost, then patient submits paper
    claim to his\her individual Part D plan for
  • If Part D vaccine is billed and reimbursed
    through a pharmacy, or if a web-based billing
    mechanism is used, the HCP may not need to
    collect administration fee from patient
  • A CMS educational article entitled Important
    Notice Regarding Vaccine Administrations in 2008
    (MLN Matters Article SE0723) and a Merck cover
    letter provide more information on this topic
  • Merck can provide CMS article and cover letter

CMS Guidance to Part D Plans on 2008 Vaccine
Administration Fee
  • May 14, 2007 Guidance Document on
  • Vaccine Administration Under Medicare Part D in
  • Available at
  • http//
  • CMS encourages billing of vaccine and
    administration on one claim form
  • Guidance language may lead to stronger
    consideration of web portal and pharmacy-based
    vaccination mechanisms
  • CMS expects plans to review claims when vaccine
    and admin fee are not billed together
  • Vaccine administration fees to be negotiated
    between plans and pharmacies
  • CMS expects plans to consider factors (e.g,
    supplies, indirect costs, etc.) used to develop
    current Medicare administration fees
  • CMS states Part D plans must allow any provider
    authorized by state law to do so to administer a
    Part D vaccine
  • Guidance allows pharmacies to establish
    relationships with immunizers to facilitate
    processing of vaccine administration fees

Part D and Vaccines Plan Options
  • In Network Options
  • Retail Pharmacy
  • Vaccination at pharmacy allowed in many states
  • Specialty Pharmacy
  • Out of Network Options
  • Default mechanism from Part D regulation out of
    network physician office process
  • HCP\Office collects up front payment from patient
    and patient submits paper claim to his\her Part D
    plan for reimbursement
  • eDispense Web-Based Billing Mechanism
  • CMS indicated plans could develop other
    mechanisms to improve access in addition to those
    listed above

Paper Claim Process
  • Beneficiary pays physician for vaccine and
    submits to Part D drug plan for reimbursement for
    vaccine product only. In 2008, beneficiary would
    pay physician for both vaccine and administration
    fee, and will submit to Part D plan for
    reimbursement for both.

  • Physician charges beneficiary usual and
    customary charge for vaccine
  • Beneficiary pays physician
  • Beneficiary files a paper claim form for direct
    reimbursement from the plan beneficiary total
    cost is physician usual and customary charge less
    any plan reimbursement after taking into account
    any deductibles and copayments (coverage gap may

  • Financial risk is borne by the beneficiary
  • Beneficiary often uncertain of amount, if any,
    that will be reimbursed at time of vaccine
  • Up front out-of-pocket cost is potential
    financial barrier to vaccine access for some
    people particular disadvantage for low income
    individuals (Dual Eligibles and others eligible
    for Part D subsidies)
  • Paper claims processing may be cumbersome for
    beneficiary may lead to member dissatisfaction
  • Paper claims processing likely more expensive for
    plan than automated claims process

In-Network Retail Pharmacy
  • Enrollees obtain prescription from physician and
    bring it to local network retail pharmacy for

  • Network pharmacy has access to coverage
    authorization, reimbursement rates and enrollee
    cost sharing information
  • In 2008, Part D network pharmacies should be able
    to bill and be reimbursed for Part D vaccine
    administration fees
  • Forty Four states currently allow pharmacists to
    administer some types of vaccinations
  • May 2007 CMS guidance for 2008 allows
    administrative arrangements between pharmacies
    and health care providers to facilitate billing
    processes and access to Part D vaccines
  • Eliminates up front out-of-pocket payment by
  • Supports physician offices that lack frozen
    storage capabilities
  • Prescription negates need for pharmacists to
    screen and identify appropriate patients
  • Low relative availability lack of ubiquitous
    vaccine services not all states authorize
    pharmacist vaccination pharmacies may lack
    distribution capabilities

Specialty Pharmacy Process
  • Part D Plans specialty pharmacy provides
    vaccines directly to physicians and handles
    claims adjudication
  • Physician calls or consumer mails prescription to
  • Pharmacy fills prescription ships vaccine to
    physician office, bills Part D plan for product
    charge and patient for applicable copayment or
    other out of pocket cost
  • Consumer would most likely return to physician
    office at later date for administration
  • For 2007, administering provider bills Part B for
    vaccine administration fee

  • May 2007 CMS guidance to plans may reduce
    interest in the use of specialty pharmacy model
    for Part D vaccines among plans
  • Eliminates up front out-of-pocket payment
  • Keeps administration in physician office
  • More expensive distribution model for plans for
    single dose product with lower cost (compared to
    most specialty products)
  • SPs may lack necessary shipping infrastructure
  • Non-acute nature of vaccines may result in
  • Lower consumer satisfaction and participation in
    two visit model

eDispense Web-portal Process
  • Web portal which is expected to allow for real
    time electronic claim adjudication in-office

  • Model should enable user to
  • Immediately verify Part D eligibility and plan
  • Provide consumer with co-payment information in
  • Submit Part D vaccine product claim directly to
    MA-PD or PDP plan
  • Determine plan reimbursement amount (which
    includes consumer co-payment)
  • Physician agrees to accept plan allowable
    reimbursement instead of collecting charge from
  • Four major Part D plans are implementing this
    mechanism currently, with more expected to do so
    in 2008
  • eDispense launched August 2007
  • eDispense should be able to process 2008
    administration fee billing and reimbursement
  • Negates need for HCP\office to collect all Part D
    vaccine costs up front
  • Physician subject to portal user agreement
  • Possible issues with integration into physician
    billing system

Long Term Care Part D Vaccines During Medicare
Part A Stays in NFs
  • Q Can a vaccine reimbursed under Medicare Part D
    be provided to a Medicare beneficiary in a
    nursing facility during a Part A
    (Medicare-covered) stay?
  • A Yes. According to a CMS letter, Part D
    covered vaccines are reimbursable for Medicare
    beneficiaries during a Part A stay because
    preventive vaccines are outside the scope of the
    Part A benefit, and no benefit category exists
    for Part D vaccines in Part B
  • Merck can provide a copy of the CMS letter along
    with other contextual information

Important CMS Resources on Part D and Vaccines
  • December 2006 - CMS Educational Articles to
    Providers Containing Information on Part D
  • Vaccine Administration Fee Implementation
  • http//
  • http//
  • January 2007 - Medicare Rx Update and Educational
    Article Informs Pharmacies of Part D
  • Vaccine Administration Fee Implementation
  • http//
  • http//
  • January 2007 CMS Educational Article to
    Providers Furnishing Services under the
  • Hospital Outpatient Prospective Payment System
  • http//
  • April 2007 Final 2008 Call Letter to Medicare
    Advantage Organizations and Part D Sponsors
  • http//
  • May 2007 CMS Memo to Part D Plans on Vaccine
    Administration in 2008

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