PACE

Provider Bulletin

Medicare Part D

and

PACE/PACENET

January 20, 2006

After January 1, 2006, PACE/PACENET Providers may be presented with both a PACE/PACENET card and a Medicare Part D prescription card. As the year progresses, increasing numbers of PACE/PACENET cardholders will possess both Medicare Part D cards and PACE cards. Providers are to treat the Medicare Part D plans the same as any other primary prescription insurance carrier by billing the primary insurer first, then, if appropriate, PACE/PACENET.

To assist providers, the following list of “Frequently Asked Questions” (FAQ’s) has been compiled:

1. Question: How am I supposed to bill PACE and PACENET claims for cardholders enrolled in other Medicare Part D plans? Are their PACE cards still good? Who do I bill first?

Answer: PACE/PACENET treats the Medicare Part D plans like any other primary payer. Bill the other plan first, and then bill PACE. And “Yes”, PACE/PACENET cards are good—both programs are alive and well.

2. Question: Since there is now Medicare Part D, why are people still presenting Medicare Discount Plan Cards? It was my understanding that the discount plan ended on January 1, 2006.

Answer: The Medicare Discount Plan cards can still be used until May 15, 2006 if the cardholder has not yet enrolled in a Medicare Part D plan and the cardholder still has a balance remaining in his/her MDP account. When a cardholder enrolls in a Medicare Part D plan, PACE is notified that their MDP coverage has ended.

3. Question: I have a customer who also has prescription coverage through a Medicare Advantage Plan. She has been advised by her MAP that she can not use her PACE/PACENET card. Is this true?

Answer: The Program is not aware of any MAP or Medicare Part D plan that requires a PACE/PACENET cardholder to surrender his/her PACE/PACENET card as a condition of enrollment. Since MAP and Medicare Part D plans usually have formularies, it is possible that the cardholder may require a drug that is not available through one of these plans but can be obtained by using their PACE card.

As with any other prescription plan, the MAP is to be billed as the primary payer. If appropriate, PACE may be billed as the secondary payer.

4. Question: I have a customer who also has prescription coverage through a Medicare Advantage Plan that only pays for certain drugs if they use mail-order. She refuses to use mail order and only wants to have her medications filled at my pharmacy. Can I honor her wishes and only bill PACE or do I have to tell her that she must use mail-order or pay for her medications herself?

Answer: The legislation does address individual preferences. If a cardholder has certain prescriptions paid by their MAP, the cardholder must adhere to their MAP’s policies. It is counter productive for PACE to pay for a medication only because the cardholder doesn’t want to follow the procedure needed to obtain the pharmaceutical.

Preferred, non-preferred drugs, formularies and tiered co-pays

Medicare Advantage Plans and Medicare Part D plans may have formularies, preferred and non-preferred drugs and tiered co-pays. Providers and their systems will be interacting both with these other plans and PACE/PACENET. The following questions have been formulated to assist providers in billing correctly. Providers are reminded of the following requirements in PACE legislation:

1. PACE is the payer of last resort—other prescription coverage is to be billed as the primary payer.

2. Providers are to adhere to the primary plan’s rules before billing PACE/PACENET. The current provider Agreement states that, “Where other Third Party Benefit Payment may be applicable … the Provider shall take reasonable measures to ascertain such prescription benefit is not available before billing the PACE or PACENET Program.”

3. PACE is a generic program.

5. Question: Regarding MAP, what if the MAP has tiered co-pays and the prescription is written “brand medically necessary” for a drug listed as a non-preferred brand-name drug on their formulary? Can I submit the claim to PACE?

Answer: The tiered co-pay issue is irrelevant to the billing issue. The issue is that the cardholder has other prescription coverage. Other prescription coverage must be billed before billing PACE. In this example, the prescriber has written ‘brand medically necessary” on the prescription and the prescription is for a “non-preferred brand-name drug” on their formulary. The MAP has to be billed first. If the MAP co-pay is greater than the PACE co-pay, the provider can submit the claim to PACE. However, since PACE is a generic Program, it is entirely possible that PACE may deny the claim. So the answer is: “Yes, it can be submitted, but the claim may deny.” Additionally, the PACE pricing algorithm may result in the cardholder paying the lower PACE co-pay without the Program reimbursing the difference (see question 18.)

6. Question: What if the prescription for the “non-preferred brand-name drug” did not have “brand medically necessary” on it?

Answer: Without the “brand medically necessary”, the claim can not be billed to PACE. Also, PACE only pays for A-rated brands if the Program has granted a medical exception.

7. Question: What if the MAP has percentage co-pay for specialty drugs on their formulary? Can I submit the claim to PACE?

Answer: Yes, but again, the MAP has to be billed first. If the MAP percentage co-pay is greater than the PACE co-pay, the claim can be submitted to PACE. However, it is possible, particularly for specialty drugs, that PACE may deny the claim or request additional information to adjudicate the claim. For example, PACE may require specific diagnostic information that the MAP does not require. Depending on the information received, PACE may or may not pay the claim. Therefore, the answer is, “Yes,” provided that you understand the claim may deny.

8. Question: After January 1, how do I submit a $175.00 Zantac claim for a PACE cardholder who has a PART D plan in which I (the provider) do not participate? Do I have to turn them away?

Answer: No. Submit the claim to PACE with an Other Coverage Code of “6”—“Other coverage exists-payment denied-not a participating provider”.

9. Question: After January 1, how do I submit a $175.00 Zantac claim for a PACE cardholder who has a PART D plan listing Zantac on their formulary? The plan also has a $250 deductible.

Answer: Submit the claim the same as you have done previously for any PACE cardholder who has other insurance. Submit the claim to the primary payer, then if necessary submit it to PACE. Using the Zantac example, the primary payer would not pay anything if the $250.00 deductible was not met. The claim is then billed to PACE as the secondary payer with an Other Coverage Code of “04”—“Other Coverage exists, payment not collected”. PACE will process the claim. If all data is correct, including the requisite “brand medically necessary” with a medical exception, since Zantac is A-rated, a “paid claim” response with the co-pay to be collected from the cardholder will be returned.

10. Question: Still using the Zantac example, what if there is no deductible and the primary plan pays for Zantac, but returns a $40 dollar copay? Will PACE pay the difference in co-pays?

Answer: PACE rules still have to be followed. That is, the prescription must have “brand medically necessary” on it and a medical exception must be on file for the claim to be considered. In the absence of either of these, the claim will deny and the cardholder is responsible for the entire copay. If these two conditions have been met and the claim is adjudicated by PACE, the provider may be reimbursed the difference in the copays if the total reimbursement from both plans does not exceed the PACE calculated allowed amount. This is explained more in detail in question 18.

11. Question: What if Zantac is not on the primary’s formulary?

Answer: If the drug is not on the other plan’s formulary, again, it can be billed to PACE as the secondary payer with an Other Coverage Code of “03”—“Other Coverage exists, claim not covered.” Again, this is predicated on the assumption that the prescriber has written “brand medically necessary” and a medical exception is in place. This is no different than what occurred prior to January 1 with other plans that had formularies.

12. Question: What if the other plan only pays for generics?

Answer: There should be no difference. PACE is a generic program. Only cardholders whose physician has documented to the Program the need for the cardholder to have the A-rated brand in lieu of the generic have the brand reimbursed.

13. Question: What if the other plan has a prior authorization requirement? Can I ignore that requirement and just bill PACE?

Answer: No. If the claim was submitted only to PACE to avoid the prior authorization requirement, it will be disallowed on audit. As Medicare Part D plans and PACE evolve, the on-line system will become increasingly sophisticated to address this issue by requiring the primary plans rejection code to be included on the secondary claim submission.

14. Question: What if the Medicare Part D denies the prior authorization request? Will the claim be disallowed on audit if I bill the claim to PACE as the secondary payer with an Other Coverage Code of “03”—“Other Coverage exists, claim not covered”?

Answer: Perhaps. As stated earlier the primary plan’s rules must be followed. For example, the primary payer may have a step therapy program. If the prior authorization was denied because this step therapy requirement was ignored, it is logical the Program will disallow the claim. If the prior authorization was denied for a health care reason, i.e. off label indication, it is logical also that the claim would be disallowed by PACE/PACENET. Conversely, if it is denied because the Medicare Part D’s patient history records do not show the prerequisite drug was used, although your records do, (e.g., the patient has been on PACE for 10 years and just enrolled in the Medicare Part D plan) it is unlikely that the claim would be disallowed.

15. Question: What if the other plan has a preferred drug? Do I have to dispense the preferred drug or can I dispense the “non-preferred” drug and bill PACE as the secondary payer with an Other Coverage Code of “03”—“Other Coverage exists, claim not covered”? Would the PACE claim be disallowed on a future audit?

Answer: Again, the primary plans rules must be followed. If the prescriber wrote generically and the non-preferred drug was dispensed instead of the preferred drug because the cardholder insisted on the non-preferred drug, the answer would be, “Yes, the claim could be disallowed on a future audit.” PACE was never intended to reward cardholders who do not adhere to their primary payer’s rules. If the cardholder chose to take the non-preferred drug, he or she is responsible for the cost of the medication. If the claim is submitted to PACE using the Other Coverage Code of “03”, the claim could be disallowed on a future audit.

16. Question: What if the cardholder’s Medicare Part D plan has a day’s supply limit for a particular drug that is less than PACE? For example, if the plan has a 14 day supply limit and PACE has 30, do I still have to bill the other plan –and subsequently PACE-- twice during the month or can I just bill PACE for a 30 day supply?

Answer: Yes, bill the other plan and PACE twice. The law states that the primary payer is to be billed prior to PACE. Although the primary payer may have a different day’s supply rule impacting certain medications, the law says the primary payer is to be billed—no reference or allowance is made for differing rules. Cardholders may dislike being billed for two co-pays, but the total cost of the co-pays will invariably be less than the cost of a 30 day supply of a medication. If the provider fails to bill the primary payer to placate the cardholder, the claim may be disallowed on audit.

17. Question: What if the other plan has a $5.00 co-pay for generics? Do I have to submit it to PACE?

Answer: No. If the primary payer’s co-pay is less than the PACE co-pay, it would be illogical to submit the claim.

18. Question: What if the other plan has a $10.00 co-pay for single source products? Will PACE reimburse me the $1.00 difference between the $9.00 PACE co-pay and their $10.00 co-pay?

Answer: Perhaps. If the amount collected from the primary payer is greater than the PACE calculated allowed amount, the answer is “No”. If this amount is lower, the answer is “Yes—but only up to the calculated allowed amount”.

For example, PACE calculates that the Program allows the provider to be reimbursed a total from ALL sources of $35. The submitted claim has $25 in the TPL field; the program will return $1.00 as the Amount Paid and $9.00 in the co-pay field.

(PACE Allowed = $35 -$25 TPL - $9 co-pay = $1.00)

Conversely, PACE calculates that the Program allows the provider to be reimbursed a total from ALL sources of $30.50. The submitted claim has $25 in the TPL field. The program will return $0.00 as the Amount Paid and $5.50 in the PACE co-pay field. PACE logic prohibits the provider to be reimbursed more than the program calculated allowed amount. In this example, even though the PACE co-pay is normally $9.00, the $9.00 co-pay exceeds the amount allowed by $3.50. Therefore the co-pay is reduced to $5.50.

(PACE Allowed = $30.50-$25 TPL - $9 co-pay = -$3.50; $9.00 copay-$3.50 = $5.50 co-pay)

19. Question: With all these plans, how do I know when it’s acceptable to bill PACE the entire usual and customary instead of the primary payer?

Answer: Although there are a variety of plans, the PACE billing methodology is unchanged:

1) ALWAYS bill or try to bill the primary payer first.

2) If the claim is denied, examine the reason for the denial. If the deny reason is something that can be remedied:

· by the patient (Using a prerequisite drug or a generic; obtaining a prior authorization from the prescriber etc.)

· or the provider ( correcting an invalid quantity, days’ supply),

do not bill PACE as the primary.

3) If the claim is denied for a reason that can not be changed:

· the drug is not on the other program’s formulary,

· the deductible has not been met,

· your pharmacy is not in the primary’s network,

then PACE can be billed the entire usual and customary with the applicable Other Coverage Code.