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12/23/2002

Next Step Taken With Discount Card Programs

Kate Traynor

The Centers for Medicare & Medicaid Services (CMS) plans next month to begin soliciting applications from pharmacy benefit managers to participate in the Bush administration's Medicare-endorsed prescription drug discount card program.

CMS Withdraws Solicitation for Applications

31 January 2003—The Centers for Medicare & Medicaid Services has abandoned plans to accept and process applications solicited earlier this month from organizations seeking to obtain endorsement of their prescription drug discount card programs.

CMS's decision follows the Wednesday ruling in the U.S. District Court for the District of Columbia that prevents the agency from implementing the Medicare-Endorsed Prescription Drug Card Assistance Initiative.

The agency indicated that it is mulling its options, which include appealing the decision or pursuing a legislative solution to reducing prescription drug costs for Medicare beneficiaries.

In documents submitted for review to the Office of Management and Budget, CMS requested that the solicitation for applications be published in the Jan. 7, 2003, Federal Register. According to CMS's proposed timeline, completed applications are due by March 7, and the names of the discount card plans receiving Medicare's endorsement will be revealed by the agency on May 1. CMS expects the plans to begin enrolling Medicare beneficiaries and providing discounts on Sept. 30.

The agency acknowledged that a lawsuit filed in 2001 by community pharmacy organizations could delay the discount card program's launch. The lawsuit, filed in the U.S. District Court for the District of Columbia, alleges that CMS lacks the authority to create the discount-card endorsement program.

The latest version of the program would allow Medicare beneficiaries to pay up to $25 to enroll in a CMS-endorsed discount card plan that provides access to reduced prices for prescription drugs. According to CMS, the discounts would come from rebates obtained from drug manufacturers.

The CMS program requires that the sponsors of the cards pass a portion of the rebate savings to cardholders or pharmacies. CMS has indicated that it expects the natural competition for customers will prompt sponsors to offer the best possible drug prices to cardholders.

Included in the application package is a pharmacy services checklist that plan sponsors must complete to indicate which services will be offered to cardholders. Among the services that seem to be optional for applicants are checking for and resolving prescribing errors, checking for drug interactions, and counseling patients.

Disease management programs and other drug-related services can be offered to cardholders, either as part of the basic plan or for an additional fee. CMS will also allow the plans to market to cardholders products and services unrelated to drug therapy. The plans, however, cannot claim that Medicare has endorsed a product or service for which cardholders are charged an additional fee.

CMS estimated that 30 organizations will submit applications to the agency and 15 applicants will qualify to administer a Medicare-endorsed card program. The agency did not set a limit on the number of discount card plans that would receive endorsement.