On March 10, 2014, the Centers for Medicare & Medicaid Services (“CMS”) issued a memorandum to Part D Plan Sponsors and Medicare Hospice Providers entitled, “Part D Payment for Drugs for Beneficiaries Enrolled in Hospice – Final 2014 Guidance” (“Guidance”).   The Guidance, effective since May 1, 2014, requires a prior authorization process for Hospice and Part D providers to determine their respective responsibility for drug coverage. The Guidance followed a 2012 OIG report entitled “Medicare Could Be Paying Twice for Prescription Drugs for Beneficiaries in Hospice,” which found that Medicare Hospice patients’ medications were sometimes paid for by Part D rather than by the patient’s Hospice program.

Now, when a Hospice patient or family caregiver attempts to fill a prescription at a pharmacy, the pharmacy must contact the prescriber to determine whether the medication is related to the patient’s terminal illness. If not, or if the cause of the patient’s need for the medication is unclear, the pharmacy cannot fill the prescription. Instead, the pharmacy must notify the patient of his or her appeal rights, thus placing the burden on the beneficiary to request a formal coverage determination from their Part D plan to access their prescribed medication. Hospices, too, feel the burden, as they are often left to help terminally ill patients and their families understand why certain prescriptions can no longer be filled during such a dire period in their lives.

Nearly 50 advocacy groups and Hospice associations have brought attention to this issue in recent weeks, urging CMS to suspend its current Part D payment policy. Over 200 members of the United States Senate and House of Representatives co-signed letters to CMS Administrator Marilyn Tavenner requesting the same and asking CMS to bring together all relevant stakeholders to develop a better policy. On June 25, the Medicare Payment Advisory Commission (MedPAC) also suggested that the current policy be suspended until a streamlined process without impact to the Medicare beneficiary can be implemented. While CMS has met with industry officials to discuss alternatives, the Guidance remains in effect for now.