Medicare Program; Secure Electronic Prior Authorization for Medicare Part D
| Published date | 19 June 2019 |
| Record Number | 2019-13028 |
| Section | Proposed rules |
| Court | Centers For Medicare & Medicaid Services |
Federal Register, Volume 84 Issue 118 (Wednesday, June 19, 2019)
[Federal Register Volume 84, Number 118 (Wednesday, June 19, 2019)]
[Proposed Rules]
[Pages 28450-28458]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-13028]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 423
[CMS-4189-P]
RIN 0938-AT94
Medicare Program; Secure Electronic Prior Authorization for
Medicare Part D
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
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SUMMARY: This rule proposes a new transaction standard for the Medicare
Prescription Drug Benefit program's (Part D) e-prescribing program as
required by the ``Substance Use-Disorder Prevention that Promotes
Opioid Recovery and Treatment for Patients and Communities Act'' or the
``SUPPORT for Patients and Communities Act.'' Under the SUPPORT for
Patients and Communities Act, the Secretary is required to adopt
standards for Part D e-prescribing program to ensure secure electronic
prior authorization request and response transmissions. If finalized,
the proposals in this rule would amend the Part D e-prescribing
regulations to require Part D plan sponsors' support of version 2017071
of the National Council for Prescription Drug Programs (NCPDP) SCRIPT
standard for use in electronic Prior Authorization (ePA) transactions
with prescribers regarding Part D covered drugs to Part D-eligible
individuals.
DATES: To be assured consideration, comments must be received at one of
the addresses provided, no later than 5 p.m. on August 16, 2019.
ADDRESSES: In commenting, please refer to file code CMS-4189-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
Comments, including mass comment submissions, must be submitted in
one of the following three ways (please choose only one of the ways
listed):
1. Electronically. You may submit electronic comments on this
regulation to http://www.regulations.gov. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-4189-P, P.O. Box 8013,
Baltimore, MD 21244-8013.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-4189-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Joella Roland (410) 786-7638.
[[Page 28451]]
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following
website as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that website to
view public comments.
I. Background
The purpose of this rule is to propose a new transaction standard
for the Part D e-prescribing program. Under this proposal, Part D plan
sponsors would be required to support version 2017071 of the National
Council for Prescription Drug Programs (NCPDP) SCRIPT standard for four
electronic Prior Authorization (ePA) transactions, and prescribers
would be required to use that standard when performing ePA transactions
for Part D-covered drugs they wish to prescribe to Part D-eligible
individuals. Part D plans, as defined in 42 CFR 423.4, include
Prescription Drug Plans (PDPs) and Medicare Advantage Prescription Drug
Plans (MA-PDs); Part D sponsor, as defined in 42 CFR 423.4, means the
entity sponsoring a Part D plan, MA organization offering a MA-PD plan,
a PACE organization sponsoring a PACE plan offering qualified
prescription drug coverage, and a cost plan offering qualified
prescription drug coverage. The proposed ePA transaction standard would
provide for the electronic transmission of information between the
prescribing health care professional and Part D plan sponsor to inform
the sponsor's determination as to whether or not a prior authorization
(PA) should be granted. The NCPDP SCRIPT version 2017071 was approved
in CMS 4182-F published on April 16, 2018 (83 FR 16440) effective June
15, 2018 and materials are incorporated by reference of certain
publications listed in the rule as approved by the Director of the
Federal Register as of June 15, 2018.
An ePA transaction standard would allow a prescriber using an
electronic prescribing (eRx) system or an electronic health record
(EHR) with eRx capability to determine whether the beneficiary's plan
requires a PA for a given medication. If the prescriber enters such a
prescription into an eRx system, a message will be returned to the
provider indicating that a PA is required. Use of the ePA transactions
would then enable the prescriber to submit the information required to
fulfill the terms of the PA in real time.
A. Legislative Background
1. Health Insurance Portability and Accountability Act of 1996 (HIPAA)
The Health Insurance Portability and Accountability Act of 1996
(HIPAA) (Pub. L. 104-191) was enacted on August 21, 1996. Title II,
Subtitle F of HIPAA requires covered entities--health plans, health
care providers that conduct covered transactions, and health care
clearinghouses--to use the standards HHS adopts for certain electronic
transactions. The standards adopted by HHS for purposes of HIPAA are in
regulations at 45 CFR part 162.
2. Medicare Prescription Drug, Improvement, and Modernization Act of
2003 (MMA)
The Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (MMA) (Pub. L. 108-173) was enacted on December 8, 2003. It
amended Title XVIII of the Social Security Act (the Act) by
redesignating Part D as Part E and inserting a new Part D to establish
a voluntary prescription drug benefit program. As part of that program,
section 1860D-4(e) of Act as added by the MMA required the adoption of
Part D e-prescribing standards for electronic prescriptions and
prescription-related transactions between Part D plan sponsors,
providers, and pharmacies. The Secretary's selection of standards is
informed by the National Committee on Vital and Health Statistics
(NCVHS). Under section 1860D-4(e)(4)(B) of the Act, NCVHS develops
recommendations for Part D e-prescribing standards, in consultation
with specified groups of organizations and entities. These
recommendations are then taken into consideration when developing,
adopting, recognizing, or modifying Part D e-prescribing standards. The
statute further requires that the selection of standards designed, to
the extent practicable, not impose an undue administrative burden on
prescribers or dispensers, are compatible with standards established
under Part C of title XI of the Act (the HIPAA standards), and with
general health information technology standards and permit electronic
exchange of drug labeling and drug listing information maintained by
the Food and Drug Administration and the Library of Medicine.
The standards adopted by CMS for purposes of the Part D e-
prescribing program are in regulations at 42 CFR 423.160. Part D plan
sponsors are required to support the Part D e-prescribing program
transaction standards, and providers and pharmacies that conduct
electronic transactions for which a program standard has been adopted
must do so using the adopted standard. See the February 4, 2005
proposed rule titled ``Medicare Program, E-Prescribing and the
Prescription Drug Program'' (70 FR 6256) for additional information
about the MMA program authority.
3. Substance Use-Disorder Prevention That Promotes Opioid Recovery and
Treatment for Patients and Communities Act (SUPPORT for Patients and
Communities Act)
The Substance Use-Disorder Prevention that Promotes Opioid Recovery
and Treatment for Patients and Communities Act (Pub. L 115-271),
hereinafter referred to as the ``SUPPORT for Patients and Communities
Act,'' was enacted on October 24, 2018. Section 6062 of the SUPPORT for
Patients and Communities Act amended section 1860D-4(e)(2) of the
Social Security Act to require the adoption of transaction standards
for the Part D e-prescribing program to ensure secure ePA request and
response transactions between prescribers and part D plan sponsors no
later than January 1, 2021. Such transactions are to include an ePA
request transaction standard for prescribers seeking an ePA from a Part
D plan sponsor for a Part D covered drug for a Part D-eligible
individual, as well as an ePA response transaction standard for the
Part D plan sponsor's response to the prescriber. A facsimile, a
proprietary payer portal that does not meet standards specified by the
Secretary or an electronic form are not treated as electronic
transmissions for the purposes of ePA requests. Such standards are to
be adopted in consultation with the NCPDP or other standard setting
organizations the Secretary finds appropriate, as well as other
stakeholders. Finally, the SUPPORT for Patients and Communities Act
also authorized the adoption of ePA transaction standards for part D
covered drugs for part D eligible individuals ``notwithstanding'' any
other provision of law.
B. Regulatory History
In 2000, the Secretary adopted HIPAA transaction standards for the
``referral certification and authorization transaction''. The term
``referral certification and authorization transaction'' is defined at
45 CFR 162.1301 as the transmission of any of the following: (1) A
request from a health care provider to a health plan for
[[Page 28452]]
the review of health care to obtain an authorization for the health
care; (2) a request from a health care provider to a health plan to
obtain authorization for referring an individual to another health care
provider; and (3) a response from a health plan to a health care
provider to a request described in (1) or (2). The first HIPAA standard
adopted for this transaction was version 4010 of the X12 278 (65 FR
50371, August 17, 2000). In 2003, the Secretary adopted another
standard, the NCPDP version 5.1, for retail pharmacy drug referral
certification and authorization transactions and specified that version
4010 of the X12 278 was to be used only for dental, professional, and
institutional referral certification and authorization transactions
(see the February 20, 2003 Federal Register (68 FR 8398)). Still, as of
2003, the Secretary had not adopted a standard for ePA for medications
specifically.
In 2004, NCPDP formed a multi-industry, multi-Standards Development
Organization (SDO) ePA Task Group to evaluate existing PA standards and
promote standardized ePA, with a focus on the medication context. The
Task Group considered the X12 278 standard, but determined that there
were certain gaps in the X12 278 standard that made the standard
difficult to use for ePA, including that the standard was unable to
support attachments for PA determinations, incorporate free text in
certain fields, and allow functionality for real-time messaging. As a
result of these findings, the Task Group wrote a letter to the HHS
Secretary stating that the X12 278 standard offered limited support for
ePA and urged HHS to test new versions of the standard.
In 2006, CMS made awards to grantees as part of a pilot to test e-
prescribing standards. The participants in the pilot identified further
gaps in the X12 278 standard that made it inadequate for use with
medication PAs. These gaps included no mechanism for providers to
request and explain reasons for deviating from standard medication
dosing instructions, requiring certain fields that are not applicable
to drugs, and no limit on diagnosis codes, which required clinicians to
select from hundreds of options to find the appropriate code.
After the pilot, stakeholders continued to try to improve the X12
278 standard by starting the process of adding new fields to the X12
278 standard to try to make it better able to support ePA. However,
after testing the modified X12 278 standard in 2006, NCPDP determined
that the improved X12 278 standard was still inadequate to support ePA,
due to the inability to exchange transactions in real-time.
On January 16, 2009, the Secretary adopted later versions of the
HIPAA transaction standards, requiring NCPDP Telecommunications D.0
instead of NCPDP 5.1 and version 5010 instead of version 4010 of the
X12 278 to be used for referral certification and authorization
transactions (74 FR 3326) because it was determined that the X12 278
standard served the needs for non-pharmacy claims. These standards are
specified at 45 CFR 162.1302(b)(2).
However, these revised standards still have the same impediments
for ePA as they still require information such as the patient diagnosis
code which is not available on prescription processing and omits other
information needed for ePA such as directions and dose. Further, it
remains a batch standard which does not accommodate the real time
nature of prescription claims.
In the meantime, interest was once again building in the industry
to develop and test alternative ePA transaction standards. NCPDP took
into account its experience with previous transaction standards as it
began to frame what would ultimately become its NCPDP SCRIPT ePA
standard, version 2013101, which included the ability to send
attachments in a standardized format. In a May 15, 2014 letter to the
HHS Secretary, NCVHS stated that they had received a letter from the
NCPDP recommending its SCRIPT Standard Version 2013101 standard for
carrying out medication ePA transactions. (For more information see,
https://ncvhs.hhs.gov/wp-content/uploads/2014/05/140515lt2.pdf.) NCVHS
reported hearing from NCPDP stakeholders that NCPDP investigators
tasked with reviewing the X12 278 standard for use as an ePA
transaction found that the HIPAA transaction standards for PA
transactions (the 278 v4010 or v5010) were not adequate to support
medication PA. The standard was designed for PA of procedures/services
or durable medical equipment (DME), so did not adequately accommodate
the information necessary to facilitate medication PA. NCPDP also noted
that X12 278 is not widely used for ePA of prescription medications as
evidence of its inadequacy for this purpose.
In response to NCVHS' May 2014 letter, we reviewed the X12 278, and
found that the X12 278 standard is designed to conduct batch
transactions which could not be used to support real time prescribing.
For example, if a PA were to be submitted using the X12 278 standard,
the PA would not accommodate a field for National Drug Codes (NDCs) and
dosage information field, which are integral when evaluating medication
requests. Since the X12 278 standard does not have a standard method to
process ePA transactions, prescribers would have to find a place to
insert NDCs and look up the codes using another source. In contrast,
NCPDP SCRIPT ePA Version 2013101 and 2017 transactions are prepopulated
with all NDCs and dosage information so the prescriber can choose among
appropriate options.
Another standard that we are aware of is the NCPDP
Telecommunications D.0 standard. However, this standard, does not have
the ability to look up and convey NDCs and dosages. The NCPDP
Telecommunications D.0 standard was designed to be a standard for
insurance companies to approve claims, so it does not include content
fields that are relevant to ePA, such as clinical fields and
beneficiary-specific information nor does it have the ability to
transmit information in real time. As such it is not frequently used by
prescribers because it cannot collect information needed for satisfying
a medication PA.
In our review of the standard, CMS found that the X12 278 standard
is by nature a batch standard which cannot support real-time
consideration of prescriptions. For example if a PA were to be
submitted using the X12 278 standard, the PA would not be submitted to
the plan until the following day, the plan would review it in the
second day and, if all the information were correct, the approval would
be conveyed back to the physician 3 days after the prescription was
captured in the batching process. The reason for this is because the
X12 278 is designed to batch the transactions, since this is what is
optimal in the DME context. However, this is not optimal in the ePA
context, since it would result in ePA transactions taking days to
process. Resolution of the ePA would be further delayed if the plan
needed additional information on the PA request.
This is in contrast to the SCRIPT ePA standard, which conveys
information to the plan in real time that allows the patient to access
a medication subject to PA the same day that the prescription and ePA
are submitted.
In addition, X12 278 collects a standard set of information.
However, PA criteria vary by medication being authorized: For some
medications the plan may need to determine whether the patient had been
on the same medication previously, or on another comparable medication
or what the mediation is being used for, while for other medications
this may not be
[[Page 28453]]
necessary. In contrast, the SCRIPT ePA transaction requires that plans
develop specific sets of questions for each drug that requires PA so
that they can be answered when the ePA is submitted.
Finally, there is an inconsistency between the types of information
that are required to be submitted on a DME claim, which is what the X12
278 transaction was designed to support, and the type of information
that is required to be submitted for medications. For example, the X12
278 standard requires the diagnosis to be submitted, which is not
required on prescription claims, but it does not accommodate a field
for National Drug Codes (NDCs) and dosage information fields that are
integral when evaluating medication requests. Because the X12 278
transaction is not specifically created to process medications,
prescribers would have to find a place to insert NDCs and look up the
codes using another source. In contrast, the SCRIPT ePA standard is
prepopulated with all NDCs and dosage information so the prescriber can
chose among appropriate options.
Despite these findings and NCPDP recommendation to NCVHS, we did
not pursue proposing the NCPDP SCRIPT Standard Version 2013101 as a
Part D eRx standard for medication PA transactions because it was
contrary to the HIPAA requirements, which require use of the X12 278
standard. Similarly, when NCPDP wrote on May 24, 2017 to CMS to
recommend the adoption of its NCPDP SCRIPT Standard Version 2017071, we
were unable to consider it for the Part D e-prescribing program unless
the HIPAA transaction standards for referral certifications and
authorizations were modified.
The Part D e-prescribing program's authorizing statute requires
selection of Part D standards that are compatible with the HIPAA
standards (see section 1860D-4(e)(4) of the Act), so we have
historically ensured that our Part D e-prescribing program standards
are compatible with the HIPAA transaction standards. (For additional
information, see the February 4, 2005 proposed rule (70 FR 6256).)
However, given the new authority under the SUPPORT for Patients and
Communities Act, we believe we now have authority to adopt Part D eRx
ePA transaction standards ``notwithstanding'' any other provision of
law if such proposals are framed in consultation with stakeholders and
the NCPDP or other standard setting organizations the Secretary finds
appropriate. See section 1860D-4(e)(2)(E)(ii)(III) of the Act, as
amended by section 6062 of the SUPPORT for Patients and Communities
Act. We believe that this provision explicitly authorizes us to require
the use of a PA standard in the Part D context that is different from
the HIPAA standard, as long as it is for a Part D-covered drug
prescribed to a Part D-eligible individual.
As previously described, Part D plan sponsors are required to
establish electronic prescription drug programs that comply with the e-
prescribing standards that are adopted under e-prescribing program's
authorizing statute. There is no requirement that prescribers or
dispensers implement eRx. However, prescribers and dispensers who
electronically transmit and receive prescription and certain other
information regarding covered drugs prescribed for Medicare Part D-
eligible beneficiaries, directly or through an intermediary, are
required to comply with any applicable standards that are in effect.
The Part D e-prescribing program currently requires providers and
dispensers to utilize the NCPDP SCRIPT standard, Implementation Guide
Version 10.6, which was approved November 12, 2008, for the
communication of a prescription or prescription-related information for
certain named transactions. However, as of January 1, 2020, we
established through rulemaking that prescribers and dispensers will be
required to use the NCPDP SCRIPT standard, Implementation Guide Version
2017071, which was approved by the NCPDP on July 28, 2017 to provide
for the communication of prescription or prescription-related
information between prescribers and dispensers for the transactions for
which prior versions of the NCPDP SCRIPT standard were adopted with old
named transactions, and a handful of new transactions named at Sec.
423.160(b)(2)(iv). (For more information, see the April 16, 2018 final
rule titled ``Medicare Program; Contract Year 2019 Policy and Technical
Changes to the Medicare Advantage, Medicare Cost Plan, Medicare Fee-
for-Service, the Medicare Prescription Drug Benefit Programs, and the
PACE Program'' (83 FR 16635 through 16638) and for a detailed
discussion of the regulatory history of e-prescribing standards see the
November 28, 2017 proposed rule (82 FR 56437 and 56438).)
While not currently adopted as part of the Part D eRx standard, the
NCPDP SCRIPT standard version 2017071 includes 4 transactions that
would enable the prescribers to initiate medication ePA requests with
Part D plan sponsors at the time of the patient's visit. These four
transactions include: The PA initiation request/response, PA request/
response, PA appeal request/response, and PA cancel request/response.
As noted previously, historically we were unable to name the ePA
transactions within the 2017071 standard as Part D e-prescribing
program standards because the Part D program was previously required to
adopt standards that were compatible with the HIPAA standards, and
HIPAA covered entities are currently required to use the X12 278 to
conduct referral certification and authorization transactions between
health plans and health care providers.
II. Proposed Adoption of the NCPDP SCRIPT Standard Version 2017071 as
the Part D ePA Transaction for the Part D Program
A. PA in the Part D Context
All Part D plans, as defined under Sec. 423.4, including PDPs, MA-
PDs, PACE Plans offering qualified prescription drug coverage, or Cost
Plans offering qualified prescription drug coverage, can use approved
PA processes to ensure appropriate prescribing and coverage of Part D-
covered drugs prescribed to Part D-eligible individuals. We review all
proposed PA criteria as part of the formulary review process. In
framing our PA policies, we encourage PDP and MA-PD sponsors to
consistently utilize PA for drugs prescribed for non-Part D covered
uses and to ensure that Part D drugs are only prescribed when medically
appropriate. Non-Part D covered uses may be indicated when the drug is
frequently covered under Parts A or B as prescribed and dispensed or
administered, is otherwise excluded from Part D coverage, or is used
for a non-medically accepted indication. (See Medicare Prescription
Drug Manual, chapter 6, section 30.2.2.3.) Part D sponsors must submit
to CMS utilization management requirements applied at point of sale,
including PA.
We may also approve PA for a drug when the Part D plan desires to
manage drug utilization, such as when step therapy is required, or when
it needs to establish whether the utilization is a continuation of
existing treatment that should not be subject to the step therapy
requirements, or to ensure that a drug is being used safely or in a
cost-effective manner. Formulary management decisions must be based on
scientific evidence and may also be based on pharmacoeconomic
considerations that achieve appropriate, safe, and cost-effective drug
therapy.
[[Page 28454]]
The PA process has historically been handled via facsimile exchange
of information or telephone call, and only recently via payer-specific
web portals. However, there is an overall consensus among stakeholders
testifying to NCVHS that there is a need for real time PA at the
prescriber level for electronic prescribing. Minutes from NCVHS
meetings can be accessed at https://ncvhs.hhs.gov/meetings-meeting/all-past-meetings/. We believe this would improve patient access to
required medications.
B. PA for Part D E-Prescribing
In order to meet the SUPPORT for Patients and Communities Act's
mandate to adopt an ePA transaction standard for the Part D-covered
drugs prescribed to Part D-eligible individuals, CMS identified ePA
transaction standards currently in use by pharmacies and prescribers.
These included the X12 278 and NCPDP Telecommunications D.0 standards,
the NCPDP SCRIPT standard version 2017071, and earlier versions of the
NCPDP SCRIPT standard. We quickly ruled out the use of older NCPDP
SCRIPT standards based on our assessment of the enhanced functionality
available in the NCPDP SCRIPT version 2017071.
We then considered the needs of the Part D program; the
functionalities offered by the remaining two standards; NCVHS
recommendations, stakeholder recommendations based on their experience
developing, vetting, evaluating, revising, and using the standards
constructed by the respective Standards Development Organizations
(SDOs) including NCPDP, the burden on stakeholders to use the standard,
the security offered by the standard; and the current EHR capabilities
of the industry in order to estimate the potential burden each standard
would impose if it were to be adopted in the Part D context. SDOs work
to formulate health and safety standards based on guidelines, best
practices, specifications, test methods, and/or designs.
The X12 278 and NCPDP Telecommunications D.0 are already used as
the HIPAA standards for referral certification and PA for dental,
professional and institutional transactions, and retail pharmacy drugs
transactions, respectively. However, the NCPDP Telecommunications D.0
standard was designed to be a standard for insurance companies to
approve claims and is only used in ``pharmacy to plan'' transactions,
so it does not include all of the content fields that are relevant to
ePA nor does it have the ability to transmit information in real time.
We then considered the X12 278.
Based on review of NCPDP's testimony and the letters received from
NCVHS, we found that the NCPDP and its participant organizations have
concluded and presented to NCVHS via testimony at hearings that the X12
278 standard is not adequate to enable ePA in the e-prescribing context
because it does not support ``real-time'' medication e-prescribing,
meaning a prescriber seeking ePA during the patient encounter. This is
due to the content logic of the standard, which does not have the
technical capabilities to allow for next question logic, which allows
the prescriber to determine medication alternatives and determine
within minutes if the medication will be authorized or if a coverage
determination is required. In addition, the fields, transaction
messaging, software functioning are not standardized to include
information relevant to ePA and contain mandatory questions that are
unnecessary for medication PA. Unfortunately, prescribers are unable to
customize these fields as needed for medication PA.
These findings are outlined in NCPDP's 2016 written testimony to
NCVHS, which is available via this web link: https://www.ncvhs.hhs.gov/wp-content/uploads/2016/01/Part-2-Attachments-NCPDP-WrittenOnly.pdf,
urging the exemption of medication transactions from the X12 278
transaction standard, and its May 24, 2017 recommendation to adopt the
NCPDP SCRIPT Standard Version 2017071 for ePA transactions in the HIPAA
context, with a 24 month implementation time period, due to the
extensive coding required by Electronic Health Records (EHRs) and Part
D plans to implement the change.
Although NCPDP's recommendation was to adopt this standard for all
HIPAA transactions, the Department has not promulgated rulemaking on
this point. Based on conversations with the industry, our own
assessment of the standard, and under the authority provided by
Congress to require the use of a standard for Part D ePA
notwithstanding any other provision of law, we have concluded that the
potential benefits of adopting user-friendly ePA for the Part D program
outweigh any difficulties that may arise by virtue of Part D using a
different standard than the rest of the industry.
More specifically the NCPDP SCRIPT standard will support an
electronic version of today's PA process by providing standardized
information fields that are relevant for medication use, mandatory
questions, transaction messaging, and standardized ePA data elements
and vocabulary words for exchanging the PA questions and answers
between prescribers and payers, while also allowing the payers to
customize the wording of the questions using free form fields. Although
the X12 278 standard has standard information fields, mandatory
questions, transaction messaging and standardized data element and
values, we believe those fields are relevant only for DME use--and
would not be conducive to medication ePA. Since the X12 278 does not
allow payers to customize the wording of questions, it is difficult for
parties to decide how to fill out the fields. The NCPDP SCRIPT Standard
was designed to support medication ePA, the standard also supports
features that minimize what the prescriber is asked, creating a
customized experience based on earlier answers or data pulled using
automated functions from their EHR system, which would reduce the
amount of time a prescriber or their staff spend reviewing and
responding to the PA questions We understand that this functionality
works with most EHR systems, and can be customized based on what
information is requested by the plans. It additionally supports
software functions that allow for automation of the collection of data
required for ePA consideration from data available within most EHR
systems or other PA transaction fields.
Furthermore, unlike the X12 278, the NCPDP SCRIPT version 2017071
standard supports solicited and unsolicited models. A solicited model
occurs when the prescriber notifies the payer that they wish to start
the PA process to determine if an authorization is needed for the
patient and their desired medication. The prescriber requests guidance
as to what information will be required for an ePA request for a
particular patient and medication. The payer then responds either with
a description of the information required, or an indication that a PA
is not required for that patient and medication. An unsolicited model
can be used when the information generated in this first interchange of
the solicited model is not required, where the prescriber presumes or
knows that an authorization will be required based on past experience
or other knowledge and they will submit the information they anticipate
the payer needs.
We found that while X12 278 uses Electronic Data Interchange (EDI)
syntax, the NCPDP SCRIPT standard version 2017071 uses XML syntax. XML
helps ensure security of transactions through the encryption of
personal
[[Page 28455]]
health information and through use of XML transaction processing. XML
is a newer syntax that provides for an easier interaction between
different formats and is more easily readable when system issues arise.
By contrast, EDI is an older syntax more commonly used when there are
few companies that conduct more standard interactions between each
other.
Based on this evaluation of the candidate standards, coupled with
the recommendations from NCPDP, CMS concluded that the NCPDP SCRIPT
standard version 2017071 is the most appropriate standard to propose
for the Part D e-prescribing program.
We recognize that this proposed rule would not change the ePA
transaction standards that may be used outside of the Part D context.
We do not believe that it will be problematic for plans to use one
standard for Part D and another standard outside of Part D, if that is
the case for the plan, because we believe that the industry is equipped
to use different standards for different health plans and programs. We
understand that based on our conversations with the industry, most EHRs
are capable of generating transactions using more than one standard for
a given transaction, and that they are programmed in a manner that
would guide a prescriber to select the correct standard for a given
transaction.
Finally, we considered whether adopting the NCPDP SCRIPT Standard
version 2017071 for ePA would create any difficulties if an individual
had multiple forms of drug coverage or wished to pay cash for their
prescription. The SUPPORT for Patients and Communities Act specifies
that the adopted standard shall be applicable for ePA of covered Part D
drugs being prescribed to Part D-eligible individuals. The Act requires
that the drug be a Part D-covered drug, and that the patient is Part D-
eligible, but it stops short of requiring that the prescribed drug be
paid for by the Part D plan. Thus, even if a prescriber were to use the
SCRIPT ePA to seek part D PA, the beneficiary's right to pay for the
drug him or herself, or to use non-Part D coverage to pay for the drug
would be unaffected. However, we note, that the prescriber would not
use the SCRIPT ePA to seek ePA with non-Part D plans. We expect that
their EHR's eRx function would be capable of using the appropriate
HIPAA standard to seek ePA outside of the Part D context. Furthermore,
where a patient has both a Part D plan and a supplementary payer the
SCRIPT ePA can be used to process the SCRIPT ePA transaction in real
time, with the claims processing transactions made in the usual manner
if/when the prescription is filled. Thus, we believe our proposal would
not be overly burdensome for the prescriber, even if beneficiaries seek
to use their non-Part D coverage.
While the prescriber can use the SCRIPT ePA for all covered Part D-
covered drugs for Part D-eligible individuals, it should refrain from
using the transaction if the patient were to specifically request that
the Part D benefits not be accessed.
As a result of these observations and our understanding that most
of the industry is able to support NCPDP SCRIPT standards for ePA using
their current EHRs, we believe that requiring plans to support and
prescribers to use the NCPDP SCRIPT 2017071 ePA transactions when
prescribing Part D covered drugs when they are prescribed to Part D
eligible individuals would not impose an undue administrative burden on
prescribers or dispensers. Therefore, based on its real time
capabilities and its inherent features designed to accommodate
prescriptions, we believe that the NCPDP SCRIPT standard version
2017071, which includes the following ePA transaction capabilities,
would be the best available option to support ePA between prescribers
and payers for Part D covered drugs prescribed to Part D-eligible
individuals:
PAInitiationRequest and PAInitiationResponse
PARequest and PAResponse
PAAppealRequest and PAAppealResponse
PACancelRequest and PACancelResponse.
If these ePA transaction proposals are finalized, they would enable
the electronic presentation of ePA questions and responses using secure
transactions.
The SUPPORT for Patients and Communities Act states that the
Secretary must adopt, and a Part D sponsor's electronic prescription
program must implement the adopted ePA by January 1, 2021. As of
January 1, 2020, plans will already be required to use the NCPDP SCRIPT
2017071 standard for certain Part D specified transactions, so we
believe that giving plans an additional year to add ePA to that list of
other NCPDP SCRIPT 2017071 transactions would not be overly burdensome
and help ensure that the SUPPORT for Patients and Communities Act is
implemented.
We acknowledge that covered entities are required to use the X12
278 standard for ePA under HIPAA, which is different than the standard
we are proposing. (See 45 CFR 162.1301.) However, the SUPPORT for
Patients and Communities Act, allows us to propose the adoption of an
ePA standard for Part D-covered drugs to Part D-eligible individuals
notwithstanding any other provision of law. We believe that our
proposal to adopt the NCPDP SCRIPT standard version 2017071 for ePA of
Part D covered drugs prescribed to Part D eligible individuals is
consistent with the statutory requirement to adopt technical standards
for ePA transactions under the Act, which allows the Secretary to
require use of standards in lieu of any other applicable standards for
an electronic transmission of an ePA nothwithstanding any other
provision of law.
Therefore, we propose to add Sec. 423.160(b)(7) which would
require that Part D plans be able to support the NCPDP SCRIPT ePA
standard transactions included within version 2017071 beginning on
January 1, 2021, and that prescribers use that standard when conducting
ePA by the same date. The proposed ePA standard applies to the
following list of ePA transactions:
PAInitiationRequest and PAInitiationResponse
PARequest and PAResponse
PAAppealRequest and PAAppealResponse
PACancelRequest and PACancelResponse
We welcome comments on the proposed adoption of the NCPDP SCRIPT
standard version 2017071 eRx for these ePA transactions for Part D-
covered drugs prescribed to Part D eligible individuals. We are also
soliciting comments regarding the impact of these proposed transactions
and the proposed effective date on industry and other interested
stakeholders, including whether the implementation of a NCPDP SCRIPT
standard version 2017071 ePA transaction standard for use by
prescribers and plans in the Part D program would impose an additional
burden on the industry as a whole. We would also be interested in
hearing if implementation of the proposed transactions is a significant
change for Part D sponsors which would make a January 1, 2021
implementation date as required by statute not be feasible. We also
seek comment on strategies to mitigate burden in order to support
successful adoption of this policy. Finally, we seek comment on any
additional ways CMS can support plans as they transition to the ePA
standard by the 2021 deadline.
III. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et
seq.),
[[Page 28456]]
we are required to provide 60-day notice in the Federal Register and
solicit public comment before a collection of information requirement
is submitted to the Office of Management and Budget (OMB) for review
and approval. In order to fairly evaluate whether an information
collection should be approved by OMB, section 3506(c)(2)(A) of the PRA
requires that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
In this proposed rule we are soliciting public comment on each of
these issues for the following sections of the rule that contain
proposed ``collection of information'' requirements as defined under 5
CFR 1320.3(c) of the PRA's implementing regulations.
A. Proposed Information Collection Requirements (ICRs)
The following requirements and burden will be submitted to OMB for
approval under control number 0938-0763 (CMS-R-262). Subject to
renewal, the control number is currently set to expire on February 28,
2019. It was last approved on February 27, 2018, and remains active.
This rule proposes to implement section 6062 of the SUPPORT for
Patients and Communities Act, which require the adoption of technical
standards for the Part D e-prescribing program that will help ensure
secure ePA requests and response transactions Specifically, the
proposed rule would amend the Prescription Drug Benefit program (Part
D) regulations to require under Sec. 423.160(b)(7) that Part D plan
sponsors (hereinafter, ``plans'') have the technical capability to
support the National Council for Prescription Drug Programs (NCPDP)
SCRIPT standard version 2017071 when performing electronic ePA for Part
D-covered drugs prescribed to Part D-eligible individuals. While this
proposed rule will not impact the PA criteria which Part D plans have
in place, the electronic process will make the PA process less
burdensome for plans and prescribers. Prescribers who are currently
using an electronic prescribing software already have access to the ePA
transactions and may generally access the proposed transactions without
cost, since the eRx software includes all transactions within the NCPDP
SCRIPT standard. As ePA is implemented the current system of manual
processing (fax and phone calls) will be eliminated, since plans will
be able to use this more appropriate standard.
We estimate a one-time cost for plans to implement the necessary
changes to support the ePA transactions within NCPDP SCRIPT standard
version 2017071. After consulting with industry stakeholders, we have
concluded that implementing or building the type of logic which will
allow systems engineers to produce the interactive logic which the
SCRIPT standard requires can vary based on how the PA criteria are
currently documented, but $100,000 is the approximate average cost. The
cost varies based on the size and expertise of the plan. This figure
includes only the plan's internal costs including labor, initial
development and programming, and systems support to transform each of
its CMS-approved PA criteria from a free flowing document suitable for
implementation by a clinical professional into a step-by-step document
that can be adapted for use by programmers. Based on our internal data,
we estimate that there are 990 plans. We estimate that only 20 percent
(or 198) of the plans (990 plans x 0.20) do not have the internal ePA
process that would be required to build the logic into the NCPDP SCRIPT
standard's ePA transactions. In that regard we estimate a one-time
implementation cost of $19,800,000 (198 plans x $100,000/plan) or
$6,600,000 annually when factoring in OMB's 3-year approval period
($19.8 million/3 years). We are annualizing the one-time estimate since
we do not anticipate any additional burden after the 3-year approval
period expires.
Based on our informal conversations with the industry, we believe
that the ongoing cost that plans would incur to process ePA
transactions range from $1.20 to $2.85 per transaction, which varies
based on vendor and volume. Based on internal CMS data, for the 990
plans we estimate that 560,430 PAs are performed every year and that
each authorization requires two individual transactions, one for
receiving and one for responding. Using $2.03 as the average cost per
transaction ([$1.20 + $2.85]/2) we estimate $4.06 per authorization
($2.03/transaction x 2 transactions/authorization). In aggregate we
project an ongoing cost of $2,275,346 annually ($4.06/authorization x
560,430 authorizations) for all plans.
With regard to current practice, the remaining 80 percent (or 792)
of the plans (990 plans x 0.80) already have an automated PA process in
place. Our review of their cost data indicates that they spend an
average of $10.00/fax PA for 448,344 authorizations (560,430
authorizations x 0.80) at a cost of $4,483,440 (448,344 PAs x $10.00/
PA). The remaining 198 plans that rely on phone or fax and individual
ePA review spend an average of $25.00/manual PA for 112,086
authorizations (560,430 authorizations x 0.20) at a cost of $2,802,150
(112,086 PAs x $25.00/PA). In this regard the transaction cost for the
current practice is approximately $7,285,590 ($4,483,440 + $2,802,150).
Outside of the one-time implementation cost, the proposed changes
to Sec. 423.160(b)(7) would result in an annual savings of $5,010,244
to Part D plans ($7,285,590 current process - $2,275,346 proposed
standard) for the ongoing PA requirements. When considering the one-
time cost, we project an annual increase of $8,875,346 ($7,285,590
current process - $5,010,244 proposed standard savings + $6,600,000
one-time cost) for the first 3 years of OMB's approval period.
B. Submission of PRA-Related Comments
We have submitted a copy of this rule to OMB for its review of the
rule's proposed information collection requirements and burden. The
requirements are not effective until they have been approved by OMB.
To obtain copies of the supporting statement and any related forms
for the proposed collections previously discussed, please visit CMS's
website at: https://www.cms.gov/Regulations-andGuidance/Legislation/PaperworkReductionActof1995/PRAListing.html, or call the Reports
Clearance Office at (410) 786-1326.
We invite public comments on the proposed information collection
requirements and burden. If you wish to comment, please submit your
comments electronically as specified in the DATES and ADDRESSES
sections of this proposed rule and identify the rule (CMS-4189-P) and
where applicable the ICR's CFR citation, CMS ID number (CMS-R-262), and
OMB control number (OMB 0938-0763).
IV. Regulatory Impact Statement
A. Statement of Need
This rule proposes to implement provisions of the SUPPORT for
Patients and Communities Act, which require the adoption of transaction
standards for the Part D program that will help ensure secure
electronic PA request and response transactions. Specifically, the
proposed rule would amend the Prescription Drug Benefit program (Part
D) regulations to require that Part D
[[Page 28457]]
plans sponsors have the technical capability to support the National
Council for Prescription Drug Programs (NCPDP) SCRIPT standard version
2017071 when performing electronic Prior Authorization (ePA) for Part
D-covered drugs prescribed to Part D-eligible individuals.
B. Overall Impact
We have examined the impact of this rule as required by Executive
Order 12866 on Regulatory Planning and Review (September 30, 1993),
Executive Order 13563 on Improving Regulation and Regulatory Review
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19,
1980, Pub. L. 96-354), section 1102(b) of the Act, section 202 of the
Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4),
Executive Order 13132 on Federalism (August 4, 1999), the Congressional
Review Act (5 U.S.C. 804(2)), and Executive Order 13771 on Reducing
Regulation and Controlling Regulatory Costs (January 30, 2017).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). A RIA
must be prepared for major rules with economically significant effects
($100 million or more in any 1 year). This rule does not reach the
economic threshold and thus is not considered a major rule.
The RFA requires agencies to analyze options for regulatory relief
of small entities. For purposes of the RFA, small entities include
small businesses, nonprofit organizations, and small governmental
jurisdictions. Most hospitals and most other providers and suppliers
are small entities, either by nonprofit status or by having revenues of
less than $7.5 million to $38.5 million annually. Individuals and
states are not included in the definition of a small entity. We are not
preparing an analysis for the RFA because we have determined, and the
Secretary certifies, that this proposed rule would not have a
significant economic impact on a substantial number of small entities.
In addition, section 1102(b) of the Act requires us to prepare an
RIA if a rule may have a significant impact on the operations of a
substantial number of small rural hospitals. This analysis must conform
to the provisions of section 603 of the RFA. For purposes of section
1102(b) of the Act, we define a small rural hospital as a hospital that
is located outside of a Metropolitan Statistical Area for Medicare
payment regulations and has fewer than 100 beds. We are not preparing
an analysis for section 1102(b) of the Act because we have determined,
and the Secretary certifies, that this rule would not have a
significant impact on the operations of a substantial number of small
rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2019, that
threshold is approximately $154 million. This rule would have no
consequential effect on state, local, or tribal governments or on the
private sector.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on state
and local governments, preempts state law, or otherwise has Federalism
implications. Since this rule does not impose any costs on state or
local governments, the requirements of Executive Order 13132 are not
applicable.
If regulations impose administrative costs on reviewers, such as
the time needed to read and interpret this final rule, then we should
estimate the cost associated with regulatory review. There are
currently 750 MA contracts (which also includes PDPs), 50 State
Medicaid Agencies, and 200 Medicaid Managed Care Organizations (1,000
reviewers total). We assume each entity will have one designated staff
member who will review the entire rule. Other assumptions are possible
and will be reviewed after the calculations.
Using the wage information from the Bureau of Labor Statistics
(BLS) for medical and health service managers (code 11-9111), we
estimate that the cost of reviewing this final rule is $107.38 per
hour, including fringe benefits and overhead costs (http://www.bls.gov/oes/current/oes_nat.htm). Assuming an average reading speed, we
estimate that it will take approximately 12.5 hours for each person to
review this final rule. For each entity that reviews the rule, the
estimated cost is therefore, $1,342 (12.5 hours x $107.38). Therefore,
we estimate that the total cost of reviewing this final rule is
$1,342,000 ($1,342 x 1,000 reviewers).
Note that this analysis assumed one reader per contract. Some
alternatives include assuming one reader per parent entity. Using
parent organizations instead of contracts will reduce the number of
reviewers to approximately 500 (assuming approximately 250 parent
organizations), and this will cut the total cost of reviewing in half.
However, we believe it is likely that reviewing will be performed by
contract. The argument for this is that a parent organization might
have local reviewers; even if that parent organization has several
contracts that might have a reader for each distinct geographic region,
to be on the lookout for effects of provisions specific to that region.
Executive Order 13771, titled Reducing Regulation and Controlling
Regulatory Costs, was issued on January 30, 2017 (82 FR 9339, February
3, 2017). It has been determined that this rule does not impose more
than a de minimis costs; and thus, is not a regulatory action for
purposes of E.O. 13771.
C. Anticipated Effects
As stated in the previously, section 6062 of the SUPPORT for
Patients and Communities Act requires the adoption of technical
standards for the Part D program that will ensure secure ePA request
and response transactions no later than January 1, 2021. We propose to
codify requirements at Sec. 423.160, which would require plans to
support the National Council for Prescription Drug Programs (NCPDP)
SCRIPT standard version 2017071 by January 1, 2021 when performing
electronic ePA for Part D-covered drugs prescribed to Part D-eligible
individuals. The proposed rule has the following impacts.
Entities affected by the PA processes include pharmacies receiving
ePAs from providers and filling the prescription, prescribers who use
ePA, the Medicare Part D Program, Part D plans, EHR vendors who need to
modify their products, and the Promoting Interoperability Programs, for
any Part D prescribers in these programs. Information about what
programs are included in the Medicare Promoting Interoperability
Programs is available via this web link: https://www.cms.gov/Regulations-and-Guidance/Legislation/EHRIncentivePrograms/index.html?redirect=/EHRincentiveprograms.
There are three primary aspects of the provision that could affect
its cost and the amount saved. The most immediate cost comes from the
one-time implementation cost for the few EHR vendors who need to need
to change their programming to use two standards; the NCPDP SCRIPT
standard version 2017071 for Part D ePA and the HIPAA standard for
other contexts. Based on
[[Page 28458]]
our conversations with EHR vendors, we believe that it would take the
EHR vendors approximately 200 developing hours and 800 programming
hours to enable the EHRs to utilize two standards.
We also estimated what it would cost plan sponsors to implement
this proposed standard. After consulting with industry stakeholders, we
have concluded that implementing or building to the SCRIPT standard can
vary, but $100,000 is the approximate amount. We estimate that only 20
percent of the 750 plans would have to make changes to implement their
ePA process to implement the SCRIPT ePA process standard, which gives
us an approximate one time implementation cost of $15 million (0.2 *
750 * $100,000).
The ongoing cost for plans range from $1.20 to $2.85 per
transaction, and vary based on vendor and volume. We estimate that
560,430 PAs are performed every year. If we estimate the average cost
per transaction to be $2.03 and each PA requires two transactions, the
ongoing cost of ePA would be approximately $2.27 million annually
($2.03 * 560,430 * 2).
The anticipated costs and how they compare to current costs are as
follows:
----------------------------------------------------------------------------------------------------------------
Plans without Plans with
automated PA automated PA Total
logic processing logic
----------------------------------------------------------------------------------------------------------------
Annual Maintenance Costs, Paper Process................ $2,302,150.00 $3,683,440.00 $5,985,590.00
Annual Maintenance Costs, ePA Process.................. ................. ................. (2,275,345.80)
Projected Annual Savings............................... ................. ................. 3,710,244.20
----------------------------------------------------------------------------------------------------------------
It should be noted that the $3,710,244 in cumulative plan savings
would be reduced by $100,000 in the first year as plans that have not
automated their PA logic move to do so.
We believe that the savings from this rule would be primarily
derived from the reduction in time it takes to process a prior-
authorization as discussed previously.
E. Alternatives Considered
The SUPPORT for Patients and Communities Act requires the adoption
of technical standards by January 1, 2021. We had considered requiring
the adoption of the standard by January 1, 2020. However, we want to
help ensure that plans have as much time to comply with the statutory
mandate as possible.
V. Response to Comments
Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble,
and, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.
List of Subjects in 42 CFR Part 423
Administrative practice and procedure, Emergency medical services,
Health facilities, Health maintenance organizations (HMO), Health
professionals, Medicare, Penalties, Privacy, and Reporting and
recordkeeping requirements.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services proposes to amend 42 CFR part 423 as set forth
below:
PART 423--VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT
0
1. The authority citation for part 423 is revised to read as follows:
Authority: 42 U.S.C. 1302, 1306, 1395w-101 through 1395w-152,
and 1395hh.
0
2. Section 423.160 is amended by adding paragraph (b)(7) to read as
follows:
Sec. 423.160 Standards for electronic prescribing.
* * * * *
(b) * * *
(7) Electronic prior authorization. Beginning January 1, 2021, Part
D sponsors and prescribers must comply with the National Council for
Prescription Drug Programs SCRIPT standard, Implementation Guide
Version 2017071 approved July 28, 2017 (incorporated by reference in
paragraph (c)(1)(vii) of this section), to provide for the
communication of a prescription or related prescription-related
information between prescribers and dispensers for the following
transactions:
(i) PAInitiationRequest and PAInitiationResponse
(ii) PARequest and PAResponse
(iii) PAAppealRequest and PAAppealResponse
(iv) PACancelRequest and PACancelResponse
* * * * *
Dated: June 11, 2019.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
Dated: June 14, 2019.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2019-13028 Filed 6-17-19; 11:15 am]
BILLING CODE 4120-01-P
