CMS Holds 300 Validated Formularies Prior To Delayed Submission Deadline

The Centers for Medicare & Medicaid Services has received and validated at least 300 drug formularies from potential Part D plan sponsors.

"We have over 300 formularies already up and validated," CMS Medicare Drug Benefit Group Deputy Director Cynthia Tudor said April 19 at a Health Strategies Consultancy conference in Washington, D.C.

The deadline for submitting formularies to CMS was April 22.

Proposed formularies are not loaded into CMS' system until after being vetted by the electronic review processes, Tudor noted.

"They have a nice little system that does a lot of checking to make sure that formularies are okay, and then [they] are loaded into our health plan management system," she said.

The high number of formularies that already have passed the preliminary review - days before the deadline for their submission to CMS - is yet another sign of substantial interest in Part D among potential plan sponsors.

CMS also received a larger-than-expected volume of Part D applications in March, which raised the possibility of a strain on the agency (¹ (Also see "Medicare Rx Could Include 150 Part D Plans, CMS Official Estimates" - Pink Sheet, 11 Apr, 2005.), p. 25).

CMS subsequently extended the original April 18 deadline for formulary proposals by four days. Tudor asserted that the move is not a sign the agency is behind schedule.

"We're preparing to review formularies," she said, adding "it was not CMS that was late in preparing our formulary upload."

Tudor suggested that the reason for the extended deadline was that plans were late in submitting information.

"It actually was that these applications for formulary upload were due on Feb. 18, and some plans did not complete them until last Monday," Tudor noted. Plans were required to provide "notice of intent" to submit a Part D application by Feb. 18.

CMS clarified that some plans had not received their user IDs for access to the Health Plan Management System; the extended deadline allowed the agency to provide the ID numbers to those plans and still give them 72 hours to complete their formulary uploads.

Tudor stressed that the drug benefit will be available on schedule. "We will implement this benefit in time," she said.

Earlier in the conference, stakeholders questioned why the formulary deadline was extended.

Caremark, which filed a notice of intent to administer PDPs in all 34 Part D regions, has already submitted its formulary, Senior VP-Marketing Sidney Stolz reported.

"Our application for a formulary has been sent in," he said. "I don't know who needed the additional days, if you didn't and we didn't. Maybe it was CMS."

Pacificare Corporate VP-Public Policy Janet Newport likewise suggested that sponsors were ready to turn in their formularies, but that the agency was unable to accept a large influx of submissions.

"CMS did call and say, 'don't load all at once,'" she said. "I think folks were ready." Pacificare is planning to remain in the Medicare Advantage market and to offer standalone PDPs nationwide (² (Also see "PacifiCare Building Additional Mail Facility Ahead Of Medicare Part D" - Pink Sheet, 4 Apr, 2005.), p. 23).

Part D formularies are going to be "very broad," Newport predicted. Pacificare formularies, for instance, are "based on disease state, and managing disease states," she said.

"We're indifferent to price if it manages a disease state," Newport maintained.

However, CMS will not distinguish between broader and leaner formularies when considering "actuarially equivalent" benefits, Tudor said.

"Generally, the actuaries are not looking at the richness of the formulary," she stated.

"You could have a plan that offered no premium and had a very slim formulary, as well as a plan offered by the same organization that had a premium with a richer formulary."