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Medicare Prescribing Regulations

When a Medicare statute is passed by a legislative body, it is given to a federal agency which interprets the law and how it will be enacted. In the case of Medicare, the regulating agency is the Centers for Medicare and Medicaid Services (CMS). When the Medicare Modernization Act was passed in 2003, CMS was charged with the task of creating regulations on Part D, the new prescription drug plan. These regulations must be followed by every Part D drug plan that pays for prescribed medications.

  1. Regulations on Coverage

    • Part D covers prescription drugs exclusively. Some drugs that are prescribed must be billed under Part B, the outpatient care benefit, rather than Part D, according to CMS. These drugs include vaccinations, the flu shot (including H1-N1), immunosuppresant drugs, some anti-cancer drugs, some dialysis drugs, anti-emetic drugs and any drugs that are typically given to a patient directly by a doctor. Other items received from a pharmacist that fall under Part B rather than Part D include lancets and blood test strips.

    Off-Label Use Regulations

    • Many doctors prescribe drugs "off-label." This means that they use a drug designed for a certain purpose and use it for another disease or treatment. CMS regulations state that unless the drug has been approved by the U.S. Food and Drug Administration (FDA) for that purpose or indication, the drug will not be covered. The only exception is if the drug use is listed in one of three Medicare-approved medical encyclopedias (compendia), or if it is an anti-cancer medication, which can be used if it is found in peer-review journals and literature.

    Regulations on Excluded Drugs

    • According to CMS regulations, certain classes of drugs are considered excluded, meaning they cannot be prescribed. Some of these classes are drugs used for weight-gain or weight-loss purposes, barbiturates, benzodiazepines, vitamins and drugs used for erectile dysfunction. However, if the drug is used for a purpose different than what is listed and it is an FDA-approved indication, then that drug may be covered. For example, some erectile dysfunction drugs are FDA-approved to treat heart conditions, and those drugs can be prescribed for heart problems.
      The regulations allow for Medicaid programs to prescribe these drugs, but not all Medicaid programs elect to do so.

    Appeals Process Regulations

    • CMS has regulations outlining a process for consumers to follow if a drug they were prescribed was denied coverage or if the plan will only supply it under restrictions. The plan will send a document titled "Notice of Denial" to the consumer; this document is necessary to begin the appeals process. The appeal must be sent within 60 days of the date on the notice.

      If the Medicare beneficiary does not hear from the plan within seven days or receives an unfavorable decision, the consumer has the right to escalate the appeal to an Independent Review Entity. There are additional levels of appeal, including appealing to an administrative law judge, the Medicare Appeals Council and to the federal court. Each level has its own requirements; primarily, a certain dollar amount must be in controversy in order to appeal to any level, from the administrative law judge through the federal courts.

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