BETHESDA, MD 18 March 2013—A federal rule on patients’ self-administration of medications "brought into the hospital" also applies to observation care, according to a document the government released on February 15 to sponsors of Medicare drug plans.
The "draft CY 2014 Call Letter" to potential sponsors of next year’s Medicare drug plans acknowledges hospitals’ prerogative, for liability reasons, not to allow patients to use their own supplies of medications.
But the letter also acknowledges drug plan enrollees’ much greater cost for obtaining supplies from a hospital’s inpatient pharmacy rather than a network pharmacy.
Not really inside. A page 1 story in USA Today a year ago brought national attention to the financial plight of Medicare beneficiaries who receive observation care at a hospital, said Deb Devereaux, vice president for pharmacy services at Washington, D.C.-based Gorman Health Group LLC.
"Patients who have a Part D plan enrollment were surprised when they got their hospital bill [and discovered] that none of the observation drugs were covered," Devereaux, a former assistant hospital pharmacy director, said.
According to the newspaper story, a patient with Part D coverage through a Medicare Advantage plan received a $442 bill for maintenance medications the hospital had administered to her during an 18-hour overnight stay. The health plan initially refused to cover the bill because the hospital had provided observation care, which is an outpatient service.
When the patient appealed the decision, according to the news story, the health plan disallowed the $442 bill altogether. The health plan referred to its contract with the hospital, which did not include the hospital dispensing maintenance medications to the plan’s enrollees when they were not inpatients. Because the hospital provided a noncovered service without first informing the patient and obtaining her written consent, the hospital could not charge the patient for any part of that service.
The current duration of observation care is part of the problem, Devereaux said.
Jonathan Blum, director for the Center of Medicare at the Centers for Medicare and Medicaid Services (CMS), in 2010 acknowledged the "growing trend both in the number but also in the length of observation care."
Devereaux said observation care is no longer simply a six- to eight-hour span that concludes with the physician deciding whether to admit or release the patient.
Patients now tend to be in observation care a lot longer, even up to 72 hours, she said.
"The implications for drug coverage are a lot bigger," Devereaux said, especially for Medicare patients whose Part D coverage comes from a prescription drug plan.
Out-of-network reimbursement. CMS says in its draft call letter that the agency does not require Part D plans to contract with hospitals to dispense medications to patients in observation care.
And most hospitals, the agency added, "have not been interested in contracting with Part D sponsors."
The letter also states that the agency expects sponsors of Part D plans to explain to enrollees the process of requesting reimbursement for out-of-network purchases made while in observation care.
CMS’s policy of not paying for drugs that can be self-administered by patients and are not integral to the reason for observation care "puts the patient in the middle," said David Chen, director of ASHP’s Section of Pharmacy Practice Managers.
"We’re encouraged by the fact that CMS is informing, educating, directing the Part D plans to make sure that their personnel are informing patients" on the reimbursement process, he said.
ASHP, likewise, has informed pharmacy practice managers about the issue. Chen said the section’s advisory group on quality and compliance worked with the Government Affairs Division to prepare a "tip sheet" that was disseminated on February 28.
CMS clarified its stance on patients’ self-administration of medications brought into the hospital in a May 16, 2012, federal rule concerning the requirements that hospitals must meet to participate in the Medicare program (see July 1, 2012, AJHP News). Hospitals may allow their patients to self-administer those medications but must have policies and procedures in place regarding such issues as product identification and security.
Chen said ASHP foresaw the possibility that this clarification, which acknowledges the importance of a patient being able to self-administer medications, could be interpreted as encouragement for patients to use their own supplies of medications while at a hospital.
But, he said, the ability to self-administer a medication is a patient care issue and distinct from CMS’s payment policy on self-administered drugs.
Few completed medication reviews. CMS had originally eyed 2014 as the first year its five-star quality rating system for Part D plans would include a measure on medication therapy management (MTM) programs.
That measure is the percentage of a plan’s MTM program enrollees who received a comprehensive medication review.
But CMS has proposed a delay of at least one year.
CMS released a spreadsheet this past December showing the so-called display measures from data the 699 Medicare drug plans submitted for 2011.
Of the 94 Part D prescription drug plans listed on the spreadsheet, 53 had reportable rates of completion for comprehensive medication reviews.
The average completion rate was 7.3%, and the median was 3.4%.
Devereaux said she calculated a median of about 6% for all the Medicare drug plans.
"Dismal. Dismal completion rate," she said.
She noted that the drug plans were already working last year to improve their performance.
That’s because CMS had already announced that it would incorporate the 2012 completion rates into the 2014 star ratings, she said.
He Mi Choe, director of innovative ambulatory care pharmacy practices for the University of Michigan Health System, expressed no surprise on hearing that the vast majority of MTM program enrollees did not receive a comprehensive medication review.
Comprehensive medication reviews for MTM program enrollees, however, probably do not influence the rate of hospital admissions, she said.
Because of the government’s criteria for enrollment, Choe said, not all patients in those programs "are accidents waiting to happen."
The final 2014 call letter for Medicare drug plans is scheduled for release on April 1.