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CMS Offers Prescription Drug Set-Aside Guidance

The Centers for Medicare and Medicaid Services (CMS) has released an interesting document to address the many questions that have been raised from their April 3, 2009 memo regarding the pharmacy review of submitted MSAs. In this latest document, CMS provides eight main points of clarification:

  1. Source for Evaluating Drug Component – The Workers’ Compensation Review Contractor (WCRC) will use the Red Book® Drug References to evaluate the sufficiency of the drug component of a Workers Compensation Medicare Set-Asides (WCMSAs).
  2. Documentation – CMS stresses that it is “imperative that submitters furnish accurate, complete, legible, and current medical and prescription records for the last two years…”. They also explain why it is their preference that WCMSAs only be submitted after the claimant has reached maximum medical improvement (MMI) and future drug needs be “reasonable, probable and predictable”.
  3. Tapering of Use – CMS will consider all evidence presented where a treating physician believes that tapering is in the best interest of the claimant.
  4. Expiration of Patent – All evidence submitted will be considered by CMS regarding whether or not a change to a less expensive drug is warranted at the expiration of a patent.
  5. Off-label Use – CMS acknowledges that physicians are free to prescribe an FDA-approved drug for any purpose that is safe and effective, but provides no further guidance as to how they will apply this concept in evaluating WCMSAs except in their conclusion below where they emphasize that they will consider all evidence submitted.
  6. Utilization Review – Utilization reports showing that the claimant should be taking more, different, less frequent or even no drugs will be considered, but more weight will be given to reports of actual drug use from treating physicians.
  7. Brand or Generic – CMS has confirmed their position on brand v. generic drugs. This document again states that where drugs are known to be needed and the submitter has not priced drugs, or the submitter has priced for a generic drug when a generic is not available, CMS will compare the WCMSA proposal to the average wholesale price for brand name drugs. They also state that if drugs are indicated on the proposal but the records do not specify whether the injured party is taking a generic or a brand name drug when both versions exist, CMS will compare the WCMSA proposal to the generic drug where the submitter has proposed a generic drug, and CMS will compare the WCMSA proposal to the brand name drug where the submitter has proposed a brand name drug or has not proposed a drug at all.
  8. Multiple Manufacturers – In the event that the WCMSA submission does not include supporting documentation regarding prices from multiple generic drug manufacturers, CMS will compare generic drugs in the WCMSA proposal and use the lowest priced generic drug as listed in the Red Book Drug References® in accordance with the April 3, 2009 procedure memo.

In conclusion, CMS emphasizes and encourages submitters to present any and all evidence they believe is helpful and CMS will review and consider all documents submitted.

To view this document in its entirety, please click here.

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