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Exceptions and appeals: a practical guide

Exceptions and Appeals: A Practical Guide
This paper, geared to advocates, discusses the mechanics of filing exceptions and appeals.1 The paper sets out the basic rules and standards for coverage determinations. Issue Strategies are attached to provide additional substantive and strategic information on how to address the following specific categories of denials: The prescribed drug is not a Part D drug. The prescribed drug is not on the plan’s formulary. Therapeutic substitution or step therapy requirements have not been met. The medication is prescribed for an off-label use.
We hope that, as the experience of advocates with coverage determinations and appeals
grows, we will be able to share more strategies and resources. If you have any
information or exceptions experience that could be of benefit to other advocates, we
would appreciate hearing from you. Send your emails to jfinberg@nsclc.org or
gburke@nsclc.org.
I. First
If the beneficiary’s prescription is turned down at the pharmacy: • Get as much information as possible from pharmacist re reason for denial. • If the denial is because the drug is a Part B drug, ask the pharmacist to process as • If the denial is because the drug is not covered by Part D and if beneficiary is a dual, ask pharmacist to process the claim through Medicaid. If that fails, see Attachment 1. • If the denial is a formulary issue (e.g., the drug is not on the plan’s formulary; the enrollee has not met step therapy or therapeutic substitution requirements; plan dosage limits are inappropriate; the drug is for an off-label use): 1 The primary document describing coverage determinations and appeals is the CMS Prescription Drug Benefit Manual, Chapter 18 – Part D Enrollee Grievances, Coverage Determinations, and Appeal (rev. 2, 6-22-06)( “PDP Manual”) at http://www.cms.hhs.gov/PrescriptionDrugCovContra/Downloads/PartDManualChapter18.pdf. NOTE: For Part D, MA-PD plans are subject to the same exceptions and appeals procedures as PDPs. See Medicare Managed Care Manual, Chapter 13 at 10 at http://www.cms.hhs.gov/manuals/downloads/mc86c13.pdf. o Check with the physician re whether a change in prescription is appropriate. If the beneficiary and physician agree to switch to a different medication that is on the plan’s formulary, e.g., a generic drug or a different brand, get the physician to change the prescription. o If changing prescriptions in not appropriate, go to the plan website and/or EOB for the plan fax and phone number for “coverage determinations.” Coverage determinations related to formulary issues, including tiering, are “exceptions.” Thus, in many cases, the terms can be used interchangeably. Asking for a coverage determination.

Denial of prescription drug coverage at the pharmacy is not a “coverage determination”
and does not start the appeals process. However, a denial of a prior authorization
request does constitute a coverage determination and the plan should send the
beneficiary a written denial.2 The enrollee may then proceed directly to the first
appeal level (see E. below).

A. Who can request a coverage determination? • A representative appointed by the beneficiary.3 CMS Form 1696 (Attachment 7 to this memo) or equivalent can be used.4 • A surrogate authorized under state law; or • The prescribing physician.5 NOTE: If the physician makes the request, a signature from the beneficiary is not required. • The prescribing physician may also file for expedited redetermination by the plan. For standard redeterminations and for all appeals at the IRE level and above, the beneficiary or representative must file. For those appeals, the physician may not proceed alone but must have written authorization by the beneficiary.6 B. What is the timing for a coverage determination? All timeframes begin the hour and date at which the plan receives the supporting
physician’s submission. Plans must accept submissions 24 hours a day, seven days a
week. Advocates, physicians and beneficiaries should keep fax transmittal records
and telephone and mail logs to substantiate times and dates of submissions to plans.

2 PDP Manual at 30.2. 3 42 CFR §423.570(c)(3); PDP Manual at 10.4. 4 The form is found at www.cms.hhs.gov/CMSForms/CMSForms/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS012207 5 PDP Manual at 10.5. 6 PDP Manual at 10.5 and 70.10. • 72 hours (clock hours, not business hours) from receipt of the physician’s • The plan can require that the statement be in writing. • Although the plan may ask for additional information from the physician, the time clock starts running upon receipt of the initial supporting statement. • Plans are encouraged to give a temporary fill during the exceptions process but doing so does not extend the 72 hour timeframe. • 24 hours (clock hours, not business hours) from receipt of physician’s supporting statement or sooner if the beneficiary’s health requires.8 • If the physician indicates, either orally or in writing, that applying the standard time frame “may seriously jeopardize the life or health of the enrollee or the enrollee’s ability to regain maximum function,” the plan must grant expedited review.9 • In expedited cases, plans must accept oral statements by the treating physician. Although the plan may ask for additional information from the physician, the clock starts upon receipt of the initial supporting statement.10 • Expedited review is unavailable if the beneficiary has already paid for and received the drug and is seeking reimbursement.11 • Plans are encouraged to give a temporary fill during the exceptions process but doing so does not extend the 24 -hour timeframe. • Plans may not require that physicians use a plan’s form or any specific format in • A form called “Request for Prescription Information or Change” has been developed by the American Medical Association, the American Pharmacists Association, the Center for Medicare Advocacy and others and is available at http://www.cms.hhs.gov/MLNProducts/Downloads/Form_Exceptions_final.pdf 7 42 CFR §423.568(a); PDP Manual at 40.2. 8 42 CFR §423.572(a); PDP Manual at 50.4. 9 42 CFR §423.570(c)(3)(ii); PDP Manual at 50.1. 10 PDP Manual at 50.2. 11 PDP Manual at 50. • A model form prepared by CMS (which may be somewhat less user-friendly for physicians than the AMA form) is available at http://www.cms.hhs.gov/PrescriptionDrugCovGenIn/downloads/ModelCoverageDeterminationRequestForm.pdf • For standard determinations, plans may require a written submission.12 • For expedited determinations, plans must accept an oral submission. D. What is legal standard for a formulary exception? CMS requires that Part D plans make available to enrollees all “medically necessary” Part D drugs. To make a showing of medical necessity, the enrollee must make one of the following showings: (1) All covered Part D drugs on any tier of a plan’s formulary would not be as effective for the enrollee as the non-formulary drug, and/or would have adverse effects; (2) The number of doses available under a dose restriction for the prescription Has been ineffective in the treatment of the enrollee’s disease or medical condition or, Based on both sound clinical evidence and medical and scientific evidence, the known relevant physical or mental characteristics of the enrollee, and known characteristics of the drug regimen, is likely to be ineffective or adversely affect the drug’s effectiveness or patient compliance; or (3) The prescription drug alternative(s) listed on the formulary or required to be used in accordance with step therapy requirements: (a) Has been ineffective in the treatment of the enrollee’s disease or medical condition or, based on both sound clinical evidence and medical and scientific evidence, the known relevant physical or mental characteristics of the enrollee, and known characteristics of the drug regimen, is likely to be ineffective or adversely affect the drug’s effectiveness or patient compliance; or (b) Has caused or, based on sound clinical evidence and medical and scientific evidence, is likely to cause an adverse reaction or other harm to the enrollee.13 See attachments for a fuller discussion of the substantive and strategic issues associated with meeting this standard for different types of formulary exceptions. 12 42 CFR §423.578(b)(6). 13 42 CFR §423.578(b)(5); PDP Manual at 30.2.2. E. What appeals are available? Prior to court review, there are four levels of appeal: • Redetermination by a different decision maker inside the plan. • Review by the Independent Review Entity (IRE). 14 • Hearing before an Administrative Law Judge at CMS. For ALJ review, the amount in controversy must be at least $100.15 • Review by the Medicare Appeals Council (MAC). • For all appeals through the IRE, the beneficiary filing deadline is 60 days.16 An enrollee may make a showing of good cause for late filing. 17 • Decision deadline for plan redeterminations and IRE review for standard appeals • Decision deadline for redetermination and IRE review for expedited appeals is 72 • Decision deadlines for ALJ and MAC are 90 days.20 G. What issues may an enrollee raise on appeal? • Through the ALJ level, the enrollee may introduce any additional evidence or • The enrollee is not limited to showing that he or she has met the prior authorization(PA) or exceptions requirements of the plan. The enrollee is free to 14 The Reconsideration Procedures Manual of the IRE contractor, Maximus, is available at http://www.medicarepartdappeals.com/PartDReconsiderationManual.pdf. 15The threshold amount is indexed and can rise yearly. PDP Manual at 90.2. The amount in controversy is calculated by looking at the enrollee’s projected costs for the drug in dispute for the plan year. However, in certain cases, costs of several disputed drugs or claims of several enrollees can be aggregated. See PDP Manual at 90.2 and 90.3. 16 42 CFR §423.582(b), PDP Manual at 70.2, 70.8, and 100.2. 17 42 CFR §423.584(a); PDP Manual at 70.3 and 80.4. Examples of good cause include: the party had a death or serious illness in the immediate family; important records were destroyed by fire or other accident; the plan gave incorrect or incomplete information about when or how to request a redetermination; notice of the determination was not received or the reconsideration was sent in good faith to another government agency within the time limit but did not reach the correct plan until after the deadline had passed. See also 42 CFR §405.942(b)(2) and (b)(3) for the good cause standard at the MAC Review level. 18 PDP Manual at 70.7, 19 PDP Manual at 70.8.1 20 42 CFR §405.1016 and §405.1100(c). argue that those requirements are inappropriate. Appeals are to be decided on the basis of medical necessity. • MAC review is limited to the record unless the MAC determines new evidence is National Senior Citizens Law Center, Oakland Office, 1330 Broadway, Suite 525, Oakland, California 94612. Tel: 510-663-1055. For further information contact Georgia Burke gburke@nsclc.org, Jeanne Finberg, jfinberg@nsclc.org, Katharine Hsiao, khsiao@nsclc.org, or Kevin Prindiville, kprindiville@nsclc.org. August 16, 2006
Reason for Denial: The prescribed drug is not a Part D drug.

• What drugs are not covered by Part D? o The following drugs are excluded by statute from Part D coverage: drugs for anorexia, weight loss or gain; for fertility; for cosmetic purposes or hair growth; or for relief of cold symptoms; prescription vitamins and minerals (except niacin, prenatal vitamins and fluoride preparations); non-prescription drugs (over-the-counter); and certain anti-anxiety and anti-seizure drugs (barbiturates and benzodiazepines are the most common). CMS has posted a detailed list of excluded drugs and usages at http://www.cms.hhs.gov/PrescriptionDrugCovContra/Downloads/PartDDrugsPartDExcludedDrugs_04.19.06.pdf . o Starting in 2007, erectile dysfunction(ED) drugs also will be excluded NOTE: Otherwise excluded drugs that are prescribed for different uses, e.g. weight loss drugs prescribed for morbid obesity or ED drugs prescribed for pulmonary hypertension, can be covered under Part D.23 The coverage determination process is the appropriate route for an enrollee to seek such coverage.24 • Is the prescribed drug a Part B drug? o See Medicare Parts B/D Coverage Table at http://www.cms.hhs.gov/Pharmacy/Downloads/partsbdcoverageissues.pdf.
25 o Ask the pharmacist to process the charges as a Part B claim. o NOTE: If the pharmacist can determine from information included in the prescription, such as diagnosis information or location of administration, whether Part B or Part D coverage is appropriate, the plan may rely on 22 42 USC §1395w-102(e)(2). See also CMS Q&A on ED drugs: http://questions.cms.hhs.gov/cgi-bin/cmshhs.cfg/php/enduser/std_adp.php?p_faqid=7682&p_created=1152639394&p_sid=9O2*Ovdi&p_accessibility=0&p_lva=&p_sp=cF9zcmNoPTEmcF9zb3J0X2J5PSZwX2dyaWRzb3J0PSZwX3Jvd19jbnQ9NSZwX3Byb2RzPTAmcF9jYXRzPSZwX3B2PSZwX2N2PSZwX3NlYXJjaF90eXBlPWFuc3dlcnMuc2VhcmNoX25sJnBfcGFnZT0xJnBfc2VhcmNoX3RleHQ9b2ZmLWxhYmVsIGluZGljYXRpb25z&p_li=&p_topview=1. 23 70 Fed. Reg. 4193, 4230 (Jan. 28, 2005). 24 Mnual at 20.2.4. 25 See also And Medicare Part B versus Part D Coverage Issues at http://www.cms.hhs.gov/PrescriptionDrugCovGenIn/Downloads/PartBandPartDdoc_07.27.05.pdf. the pharmacist for determining appropriate coverage without separately contacting the physician.26 o Ask the pharmacist to process the claim through Medicaid. All state Medicaid programs, except Tennessee, cover some Part D-excluded drugs. • Is the enrollee in an enrollment period? o Consider changing to an enhanced plan that includes the beneficiary’s • Is the enrollee a Medicaid spend-down eligible? o If the enrollee pays for a non-Part D drug, the payments can count as an “incurred medical expense.” If the beneficiary joins an enhanced plan to cover the drugs, premium payments also can count as incurred medical expense. o If the enrollee is in a nursing home and cannot pay, the nursing home is required to provide all necessary drugs but can seek reimbursement. 26 See “Clarification of Plan Due Diligence in Prior Authorization of Part B versus Part D Coverage Determinations” at http://www.cms.hhs.gov/PrescriptionDrugCovContra/downloads/DueDiligenceQA_03.24.06.pdf.
Reason for Denial: The prescribed drug is a Part D drug but is not on plan’s
formulary.

• What is the most relevant element of the Medical Necessity Standard? o The requested drug is medically required and other on-formulary drugs will not be effective because all covered Part D drugs on any tier of a plan’s formulary would not be as effective for the enrollee as the non-formulary drug, and/or would have adverse effects. • What do advocates report? {Nothing to report yet. We look forward to input from o CMS 2007 Formulary Guidelines: Plans must cover all or substantially all drugs in the immunosuppressant, antidepressant, antipsychotic, anticonvulsant, antiretroviral and antineoplastic classes. http://www.cms.hhs.gov/PrescriptionDrugCovContra/Downloads/CY07FormularyGuidance.pdf
Reason for Denial: The plan imposes therapeutic substitution, step therapy, or other
utilization management requirements before authorizing the drug, and those
requirements have not been met.

• In What Context Do These Issues Arise? o A physician attempts to meet a prior authorization requirement and the o A physician seeks an exception to the prior authorization requirement. Denial of coverage in either instance is a coverage determination, which requires written notice of denial by the plan and triggers appeal rights. • What is the most relevant element of the Medical Necessity Standard? The requested drug is medically required and the prescription drug alternative(s) listed on the formulary or required to be used in accordance with step therapy requirements: (a) has been ineffective in the treatment of the enrollee’s disease or medical condition or, based on both sound clinical evidence and medical and scientific evidence, the known relevant physical or mental characteristics of the enrollee, and known characteristics of the drug regimen, is likely to be ineffective or adversely affect the drug’s effectiveness or patient compliance; or (b) has caused or, based on sound clinical evidence and medical and scientific evidence, is likely to cause an adverse reaction or other harm to the enrollee. 42 CFR §423.578(b). Avoid procedural confusion: If a physician attempted to meet a prior authorization requirement, step therapy requirement or any other utilization management requirement and was unsuccessful, the advocate is not limited to appealing that issue. The appeal is an exception and the advocate may directly argue the medical necessity of the drug for the enrollee. • What are relevant resources? Manual at 30.1.: Discusses prior authorization appeals with examples.
Reason for Denial: The dosage prescribed exceeds the dosage limits imposed by the
plan. NOTE: A limit on dosage form (e.g., tablet when the enrollee needs liquid) also
may be appealed as an exception.

• What is the most relevant portion of the Medical Necessity standard? The number of doses available under a dose restriction “(a) Has been ineffective in the treatment of the enrollee’s disease or medical condition or, (b) Based on both sound clinical evidence and medical and scientific evidence, the known relevant physical or mental characteristics of the enrollee, and known characteristics of the drug regimen, is likely to be ineffective or adversely affect the drug’s effectiveness or patient compliance.” PDP Manual Ch. 18 at 30.2.2. o The American Psychiatric Association reported a June 28 decision of Administrative Law Judge Douglas Jones granting an exception request for 60 pills per month of three psychiatric medications when the plan formulary only permitted 30 pills each. That case involved a 48-year-old woman with severe refractory depression being treated with mirtazapine (90 mg a day), Wellbutrin XL (600 mg a day), and Cymbalta (120 mg a day). The supporting physician statement said: "After eight years of prescribing numerous combinations of various drugs, this combination is the only combination that has effectively treated [the patient's] severe refractory depression." The physician continued: "Trial of appropriate duration at lower doses of all three drugs has been tried and has failed to provide [the patient] with any relief. Although the prescribed doses exceed standard doses for the prescribed medications, they are consistent with doses that practicing psychiatrists use to treat patients with chronic and persistent mental illness who have had an inadequate treatment response to lower doses.” See http://pn.psychiatryonline.org/cgi/content/full/psychnews;41/15/1 o CMS Q&A ID 6987: The absence of reference to the dosage sought by the enrollee in one of the compendia does not disqualify a drug as a Part D drug. Dosage limitations are always subject to the exceptions process based on the “medically necessity” criteria. Plans may not conclude that, because a dosage level is not approved by FDA and is not supported by listing in a compendium, that dosage makes a prescription “not a part D drug.” http://questions.cms.hhs.gov/cgi-bin/cmshhs.cfg/php/enduser/std_adp.php?p_faqid=6987&p_created=1144350820&p_sid=9O2*Ovdi&p_accessibility=0&p_lva=&p_sp=cF9 zcmNoPTEmcF9zb3J0X2J5PSZwX2dyaWRzb3J0PSZwX3Jvd19jbnQ9NSZwX3Byb2RzPTAmcF9jYXRzPSZwX3B2PSZwX2N2PSZwX3NlYXJjaF90eXBlPWFuc3dlcnMuc2VhcmNoX25sJnBfcGFnZT0xJnBfc2VhcmNoX3RleHQ9b2ZmLWxhYmVsIGluZGljYXRpb25z&p_li=&p_topview=1.
Reason for Denial: The medication is prescribed for an off-label use.

• What showings are required to get coverage? 1. The drug is prescribed for a “medically accepted indication,” i.e., either the use has been approved by FDA, or the use is supported by a citation in one of three compendia: • American Hospital Formulary Service Drug Information • United States Pharmacopoeia-Drug Information • DRUGDEX Information System Support for a use in a peer reviewed journal, without support in one of the compendia, is insufficient to demonstrate use for a medically accepted indication. If a drug is not prescribed for a medically accepted indication, it is not a Part 2. The drug is medically necessary: All covered Part D drugs on any tier of the plan’s formulary would not be as effective for the enrollee and/or would have adverse effects. The requested drug is medically required and the prescription drug alternative(s) listed on the formulary: (a) has been ineffective in the treatment of the enrollee’s disease or medical condition or, based on both sound clinical evidence and medical and scientific evidence, the known relevant physical or mental characteristics of the enrollee, and known characteristics of the drug regimen, is likely to be ineffective or adversely affect the drug’s effectiveness or patient compliance; or (b) has caused or, based on sound clinical evidence and medical and scientific evidence, is likely to cause an adverse reaction or other harm to the enrollee. 42 CFR §423.578(b); PDP Guidance at 30.2.2. o DRUGDEX is the most comprehensive and expansive of the compendia and usually the most helpful in supporting an off-label use. o Advocates have contacted drug manufacturers found them helpful in finding and explaining relevant compendia citations and in working with physicians on supporting information. o An advocate has suggested that, in a situation where a use is not directly listed in a compendium, you consider arguments that a compendium “supports” the use. The statute, 42 USC 1396r-8(k)(6), states that a “medically accepted indication” is one whose use is “supported by” (not “listed in”) one of the compendia listings. o 70 Fed. Reg. 4260-4261: CMS discussion of regulations related to off- o Edmonds v. Levine, 417 F. Supp2d 1323 (S.D. FL, Feb. 14, 2006). In a Medicaid case, the court held that off label use identified in one of the compendia must be treated as “medically accepted indication.” In a determination of whether a drug use has met the “medically accepted indication” test, the statute does not permit the imposition of additional criteria such as a requirement that the compendia show that the drug had been subjected to double blind tests. o CMS Q&A on off-label use: http://questions.cms.hhs.gov/cgi- bin/cmshhs.cfg/php/enduser/std_adp.php?p_faqid=5074&p_created=1119390140&p_sid=9O2*Ovdi&p_accessibility=0&p_lva=&p_sp=cF9zcmNoPTEmcF9zb3J0X2J5PSZwX2dyaWRzb3J0PSZwX3Jvd19jbnQ9NSZwX3Byb2RzPTAmcF9jYXRzPSZwX3B2PSZwX2N2PSZwX3NlYXJjaF90eXBlPWFuc3dlcnMuc2VhcmNoX25sJnBfcGFnZT0xJnBfc2VhcmNoX3RleHQ9b2ZmLWxhYmVsIGluZGljYXRpb25z&p_li=&p_topview=1.
Reason for Exception: Drug is approved but enrollee seeks a tiering exception.

• What is the Medical Necessity standard for a tiering exception? The physician’s supporting statement must indicate that the preferred drug for the treatment of the enrollee’s condition: (1) would not be as effective as the requested drug; or (2) Would have adverse effects.27 • What do advocates report? {Nothing to report yet. We look forward to input ƒ when reviewing a tiering exception, “a supporting statement provided by a physician is entitled to great weight.” ƒ An enrollee can not request a tiering exception to obtain a preferred drug at the cost-sharing level that applies to drugs in a plan’s generic tier. ƒ Plans may maintain a formulary tier for very high cost and unique items and may design an exception process so that drugs in that tier are not eligible for a tiering exception. o “Medicare Modernization Act: 2007 Final Guidelines—Formularies” Only Part D drugs with plan negotiated prices that exceed $500/month may be placed in a specialty tier. 27 42 CFR §423.578(a); Manual at 30.2.1.

Source: http://www.onlineresources.wnylc.net/healthcare/docs/NSCLC_Appeals_Guide.pdf

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