PAM Section 7: Medicare-Covered Drugs

On this page: 

• Medicare Part B Drugs
  • Definition
  • Benefit
• Medicare Part D Drugs
  • Definition
  • Benefit
• The Formulary
• Tiered Drug Benefit
• Medicare Part D Benefit Stages and Total Out-of-Pocket Costs
• Vaccines Covered Under Medicare Part D
• Provision of and Billing for SHINGRIX^©
• Part D Utilization Management Requirements
• Diabetic Glucose Monitors, Test Strips, and Supplies
• Self-Administered Drugs in an Outpatient Setting
• Non-Covered Part D Utilization Management Requirements
• Inflation Reduction Act

Medicare Part B Drugs

Definition

Medicare Part B drugs fall into five major categories:

1. Drugs billed by physicians and typically provided in physicians’ offices or outpatient facility, ‘incident to’ a physician’s service.
2. Drugs billed by pharmacy suppliers and administered through durable medical equipment (e.g., nebulizer solutions).
3. Drugs billed by pharmacy suppliers and self-administered by the patient (e.g., immunosuppressive drugs and some oral anti-cancer drugs).
4. Separately-billable drugs provided in hospital outpatient departments, covered as "supplies" or "integral to a procedure.’
5. Separately-billable End Stage Renal Disease (ESRD) drugs.

Part B drugs are not usually self-administered (except in the instance listed above); therefore, coverage is usually limited to drugs or biologicals administered by infusion or injection.

Despite the general limitation on coverage for outpatient drugs under Part B, there are some notable exceptions to this limitation. In addition to the drugs mentioned above, the following drugs or classes of drugs generally are considered payable under Medicare Part B:

• Antigens.
• Hemophilia clotting factors.
• COVID-19 vaccine.
• Influenza vaccine.
• Oral anti-cancer drugs.
• Oral anti-emetic drugs.
• Pneumococcal vaccine.
• Injectable osteoporosis drugs.
• Certain drugs for home dialysis.

This is not an exhaustive list.

Benefit

Drugs classified as Part B drugs are subject to a coinsurance determined by the member’s Trinity Health Plan Of New England policy. Please see the Summary of Benefits or contact provider services for specific coinsurance amounts.

The Part B coinsurance amount does not count toward a member’s Part D coverage limit, initial coverage limit or total out-of-pocket amount.

Medicare Part D Drugs

Definition

A Part D drug is available only by prescription, approved by the Food and Drug Administration (FDA), used and sold in the United States and used for a medically accepted indication. Covered Part D drugs include prescription drugs, biological products, insulin and some vaccines.

Medical supplies associated with the injection of insulin (syringes and needles) are also included under Part D.

There are some drugs, prescription or otherwise, that are not covered by either Medicare Part B or Part D.

Benefit

For all questions related to Part D drug benefits, and coverage requirements, please consult the member’s Evidence of Coverage or call provider services.

Most providers are not contracted to dispense Part D drugs as network providers (except for vaccines). In the event that you do dispense these drugs, you have 2 options for claims submission:

1. Bill Trinity Health Plan Of New England’s Pharmacy Benefit Manager, CVS Caremark.
2. Supply the required and necessary information to the member to submit a Member Reimbursement Claim to Trinity Health Plan Of New England’s Pharmacy Benefit Manager.

The Formulary

A formulary is a listing of drugs covered by Trinity Health Plan Of New England to meet our members’ needs.

Our members have access to our formulary. If any formulary changes are made that will limit members’ ability to fill their prescriptions, Trinity Health Plan Of New England will notify the members before the change is made. At least a 30-day notice will be given. The latest version of the formulary is always available on our website.

Tiered Drug Benefit

Under Trinity Health Plan Of New England’s Part D drug benefit, covered drugs fall into one of five tiers. The copay or coinsurance amount assigned to each tier varies between products. The five tiers are:

• Tier 1: Preferred generic
• Tier 2: Generic
• Tier 3: Preferred brand
• Tier 4: Non-preferred drug
• Tier 5: Specialty tier

Any drug covered by Medicare but not found in the formulary is treated as if it were a non-formulary drug and is subject to the Tier 5 coinsurance amount upon review and approval.

Members may incur extra cost for drugs obtained at an out-of-network pharmacy. 

For a list of pharmacies in your area visit the Find a Provider page of our website.

Medicare Part D Benefit Stages and Total Out-of-Pocket Costs

Medicare Part D benefits include four stages of coverage. Stage one, the yearly deductible stage, may apply to members depending on which plan is chosen. Stage two is the Initial Coverage Limit where members are only responsible for the tier copay or coinsurance associated with the prescription drug. Stage three is where members generally are responsible for 25% of the Medicare covered drug charges. This period is commonly referred to as the coverage gap or ‘donut hole.’ This stage is supplemented by the Medicare Coverage Gap Discount Program which provides a manufacturer discount on brand name drugs and also reduced cost for generic drugs. In addition to this program, our plans offer additional gap coverage. Please refer to the member’s Evidence of Coverage.

Members stay in the coverage gap stage until they have reached the annual Part D total out-of-pocket amount. Members then move into stage four, the Catastrophic stage.

In the Catastrophic stage, Trinity Health Plan Of New England will pay the full cost of the member’s covered Part D drugs and the member will pay nothing.

Members receive monthly statements advising them of the amounts applied toward these limits.

Vaccines Covered Under Medicare Part D

If not in the Point of Care (POC) Network, claims for Part D vaccines and their administration must be billed on a CMS-1500 to Trinity Health Plan Of New England’s Pharmacy Benefit Manager, CVS Caremark. CVS Caremark will send your office an Explanation of Payment which will include the member’s cost share. CVS Caremark’s address:

CVS Caremark Medicare Vaccine Processing 
P. O. Box 52193 
Phoenix, AZ 85072-2193

Provision of and Billing for SHINGRIX^©

If your office has chosen to offer the SHINGRIX© vaccine to your Trinity Health Plan Of New England patients, Trinity Health Plan Of New England has contracted with POC Network Technologies for its TransactRx Vaccine Manager to allow you to submit claims directly to CVS Caremark for reimbursement.

Part D Utilization Management Requirements

The member formulary has Utilization Management requirements that include prior authorization (PA), quantity/dosage limits (QL), Part B benefit versus Part D benefit determinations (B/D), as well as non­formulary exception criteria.

Prior Authorization: For a select group of drugs the plan requires the member or their physician to get prior approval before the plan will agree to cover the drug. The approval or denial is based on the plan design and focuses on safety and proper medication use.

Quantity/Dosage Limits: For certain drugs, we limit how much of a drug can be obtained within a specific period of time. Quantity limits are based on approved FDA maximum daily limits.

Part B benefit versus Part D benefit determinations (B/D): Some drugs may be paid either under Part B benefit or the Part D benefit depending on the circumstances. Information may need to be submitted describing the use or setting of the drug to make the determination.

Formulary Exceptions are used to determine if a drug meets specific exception criteria in order to be covered even though it is not on the plan’s formulary.

For drugs in tier 2, 3 (generic only) and 4 (brand and generic), a provider can ask the plan to make an exception in the cost-sharing tier for the drug if the member has medical reasons that justify an exception to the rule.

Some key points regarding these Part D Utilization Management requirements:

• Most prior authorizations must be done annually per member per prescription.
• A temporary 30-day override may be requested by the prescribing physician, pharmacist or member while the prior authorization is under review.
• Prior authorizations and coverage determinations can be requested proactively in one of three ways:

1. Call Trinity Health Plan Of New England’s Pharmacy Benefit Manager, CVS Caremark, to initiate a prior authorization or coverage determination over the phone.
2. Utilize the Part D prior authorization forms or coverage determination request form and fax the form to CVS Caremark.
3. Call Trinity Health Plan Of New England’s Pharmacy Benefit Manager, CVS Caremark, to request a general prior authorization form.

Providers shall not impose any fees or charges upon Trinity Health Plan Of New England or our members for completion of prior authorization or other administrative forms required by Plan.

Diabetic Glucose Monitors, Test Strips, and Supplies

Effective January 1, 2024, Trinity Health Plan Of New England Health Plan members must obtain their diabetic testing supplies, as well continuous glucose monitors, at any of our 66,000 in-network retail pharmacies nationwide or through our mail order pharmacy, CVS Caremark.

Beginning January 1, 2024, the following preferred blood glucose monitors and test strips are covered:

• LifeScan: OneTouch Ultra Blue or OneTouch Verio
• Roche: Accu-Chek Plus, Accu-Chek Aviva, Accu-Chek Smart View or Accu-Chek Guide

For Continuous Glucose Monitoring system (CGM), the following preferred CGM supplies are covered:

• DexCom
• FreeStyle Libre

Only these brands of preferred monitors, test strips or continuous glucose monitoring system and supplies are covered by the plan effective January 1, 2024. In order for your patients to obtain new blood glucose monitors, test strips and lancets or CGM and supplies, please submit a new prescription with refills for a full year to their pharmacy on file with your office.

Self-Administered Drugs in an Outpatient Setting

Self-administered drugs provided to members during an outpatient hospital encounter are reimbursable under Part D benefits if the drug is a Medicare Part D-covered medication. In order for members to receive reimbursement for this benefit, they must be provided with the appropriate detail to submit a member reimbursement claim to Trinity Health Plan Of New England’s Pharmacy Benefit Manager. The required information is as follows:

• National Drug Classification Number (NDC).
• Full name of medication.
• Dosage.
• Strength.
• Dispense date.

As an out-of-network outpatient cost of drug pharmacy, Trinity Health Plan Of New England requests that you comply with the above information request in order to facilitate member reimbursement requests.

Non-Covered Part D Utilization Management Requirements

There are some drugs that are excluded from Medicare coverage by law, including drugs prescribed for:

• Anorexia, weight loss or weight gain (except to treat physical wasting caused by AIDS, cancer or other diseases).
• Fertility.
• Cosmetic purposes or hair growth.
• Relief of the symptoms of colds, like a cough and stuffy nose.
• Erectile dysfunction may be covered as a supplemental benefit under certain plans.
• Prescription vitamins and minerals may be covered as a supplemental benefit under certain plans (except prenatal vitamins and fluoride preparations).
• Non-prescription drugs may be covered as a supplemental benefit under certain plans (over-the-counter drugs).

Prescription drugs used for the above conditions will not be covered by Medicare Part D. However, they may be covered if they are being prescribed to treat other conditions. For example, prescription medications for the relief of cold symptoms may be covered by Part D if prescribed to treat something other than a cold—such as shortness of breath from severe asthma—as long as they are approved by the United States FDA for such treatment.

If you prescribe a non-cancer medication on the formulary for a reason other than the use approved by the United States FDA, the drug will not be covered unless the use is listed in one of three Medicare-approved drug compendia (medical encyclopedias of drug uses). For anti-cancer drugs, the drug plan should accept indications of drug use from additional compendia and other peer-review medical literature.

A patient may also receive a denial from a Part D plan stating that their drug does not meet DESI standards. The FDA’s Drug Efficacy Study Implementation (DESI) evaluates the effectiveness of those drugs that had been previously approved on safety grounds alone. Drugs that are found to be less than effective by DESI evaluation are excluded from coverage by Part D.

Inflation Reduction Act

On August 16, 2022, the 2022 Inflation Reduction Act (IRA) was signed into law. This law includes many changes to Medicare Part D that will take place over several years. However, for the 2023 plan year, two provisions from the IRA went into place beginning January 1, 2023.

Coverage of Adult vaccines

Effective January 1, 2023, our plan covers those Part D vaccines recommended by the Centers for Disease Control and Prevention’s (CDC) Advisory Committee on Immunization Practices at $0 for individual 19 years of age and older.

Appropriate Cost-Sharing for Covered Insulin Products

Effective January 1, 2023, our plan covers a one-month supply for each covered Part D insulin product with a copay of no more than $35, no matter what cost-sharing tier it is on and will not charge a deductible. Beginning July 1, 2023, your cost-sharing for insulin furnished through a Durable Medical Equipment (DME) item, such as an insulin pump, will not exceed a Part B co-insurance cap of $35 for a one-month’s supply of insulin.