Fact sheet

Part D Enhanced Medication Therapy Management Model Fact Sheet

Part D Enhanced Medication Therapy Management Model Fact Sheet

The Centers for Medicare & Medicaid Services (CMS), Center for Medicare and Medicaid Innovation (Innovation Center) is announcing the Part D Enhanced Medication Therapy Management (MTM) model. This Enhanced MTM model offers an opportunity and financial incentives for basic stand-alone Part D Prescription Drug Plans (PDPs) in selected regions to offer innovative MTM programs in lieu of the standard CMS MTM model, aimed at improving the quality of care while also reducing costs. As part of the “better care, smarter spending, healthier people” approach to improving health delivery, CMS will test changes to the Part D program that aim to achieve better alignment of PDP sponsor and government financial interests, while also creating incentives for robust investment and innovation in MTM targeting and interventions. The objectives for this model are for stand-alone PDP sponsors to identify and implement innovative strategies to optimize medication use, improve care coordination, and strengthen system linkages.

The Enhanced MTM model test will begin January 1, 2017 with a five-year performance period.   CMS will test the model in 5 Part D regions:  Region 7 (Virginia), Region 11 (Florida), Region 21 (Louisiana), Region 25 (Iowa, Minnesota, Montana, Nebraska, North Dakota, South Dakota, Wyoming), and Region 28 (Arizona).   Regions were evaluated based on variation in market competition, the range of geographic, population, and market characteristics, and the range of Parts A and B spending variance.  This set of regions was selected so as to allow for a sufficiently powered model test with comparison regions and to (in aggregate) be broadly representative of national market characteristics.  

Eligible basic stand-alone PDPs in these regions, upon approval from CMS, can vary the intensity and types of MTM interventions they provide based on beneficiary risk level and seek out a range of strategies to individualize beneficiary and prescriber outreach and engagement.  Applicants can accomplish these goals by leveraging the core competencies of their own organizations, their network pharmacy providers, and prescribers to accurately identify and effectively intervene with beneficiaries whose issues with medication management have caused, or are likely to cause, adverse outcomes and/or significant non-drug program utilization and costs.

The Enhanced MTM Model is authorized under section 1115A of the Social Security Act (added by section 3021 of the Affordable Care Act) (42 U.S.C. 1315a), which authorizes the Center for Medicare and Medicaid Innovation to test innovative health care payment and service delivery models that have the potential to lower Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) expenditures while maintaining or enhancing the quality of beneficiaries’ care.  CMS will test this model in the Medicare program through a limited waiver of certain Part D requirements, including current CMS MTM program requirements, for participants in the test regions during the performance period.  

The Medicare Modernization Act (MMA), which created the Part D program, required that every Part D plan offer an MTM program as a quality improvement feature. MTM generally refers to activities intended to optimize therapeutic outcomes by ensuring that patients are taking their medications safely and as prescribed, addressing any barriers to their doing so, and bringing any medication issues to the attention of the treating physician.

MTM programs can generate cost savings and result in improved outcomes for patients in a variety of ways. Evidence has shown MTM can improve medication adherence, which is associated with medical cost savings even when accounting for changes in drug expenditures.  MTM can also help to ensure that medications are taken properly and adverse drug events are avoided, particularly when new or high-risk medications are initiated, resulting in improved care for beneficiaries and significant savings from reduced hospitalizations and emergency department use.  Improved accuracy of medication administration can both improve outcomes and reduce waste, especially for high-cost drugs where therapeutic goals may not be achieved and expensive regimens may have to be repeated if medications are not taken correctly.  MTM programs can also improve the appropriateness of prescribing, ensuring that beneficiaries are receiving evidence-based therapies appropriate for their condition, potentially reducing complications and unnecessary medical costs in order to improve beneficiary outcomes.  Finally, MTM can help to identify and eliminate duplicative therapies, as well as identify opportunities to switch to similar, lower-cost medications, both of which can reduce prescription drug costs.

Evidence suggests that the MTM services currently offered by Part D plans fall short of their potential to improve quality and reduce unnecessary medical expenditures, most likely due to misaligned financial incentives and regulatory constraints. Competitive market dynamics and Part D program requirements and metrics may incentivize investment in these activities only at a level necessary to meet the minimum compliance standards.  Currently, Part D statutory and regulatory MTM provisions require uniform service offerings to enrollees who meet the plan’s program criteria, based on numbers of medications and chronic conditions and expected annual prescription drug costs. These criteria both over-identify and under-identify beneficiaries who are either experiencing or at-risk of experiencing medication-related issues and could benefit from MTM interventions.  The result is that Part D MTM programs may not include the level or resources nor the type of activities that could have the greatest positive effect on beneficiary outcomes.

The Enhanced MTM model features a combination of regulatory flexibilities and payment incentives for basic stand-alone PDPs. Key elements of this model include:

  • Significant regulatory flexibilities, including:
    • The ability to offer different MTM services to individual enrollees based on their level of medication-related risk, with interventions tailored to those enrollees’ specific barriers to improvement;
    • The ability to offer a more expansive set of MTM-related items and services, as well as cost sharing assistance to financially needy beneficiaries;  
    • The flexibility to experiment with alternative communication strategies to improve beneficiary, pharmacist and medical provider coordination and engagement;
  • A plan-specific prospective payment to support more extensive MTM interventions that will be outside of a plan’s annual Part D bid and will therefore not impact plan premiums;
  • The opportunity to qualify for a performance payment in the form of an increased beneficiary premium subsidy (in a future year) for plans that successfully achieve a 2% reduction in expected beneficiary fee-for-service expenditures (net of model prospective payments);
  • The ability to request beneficiary-level Parts A and B claims data and potentially Accountable Care Organization (ACO)-alignment information from CMS to assist with identification and care coordination of individuals at risk of medication-related problems; and,
  • A new MTM encounter data collection effort leveraging existing work by industry experts to develop MTM-specific code sets, which will support the vision of the Office of National Coordinator for Health Information Technology (ONC) for prescription drug data interoperability.

Enhanced MTM services are likely to be complementary to, rather than duplicative of, those of ACOs and other integrated care models.  Participating PDPs are expected to test new approaches for integrating pharmacists into physician medication management workflows.

Beneficiary Benefits and Protections
PDPs in this model can only offer MTM-related items or services, or lower cost sharing for financial need to targeted beneficiaries, and cannot restrict benefits or raise cost sharing to discourage use of medically necessary prescription drugs as a model intervention.  Participating PDPs will be expected to continue to meet current standards required by the Medicare program.  Eligible beneficiaries who do not want the Enhanced MTM items or services may opt out of any offered assistance at any time.

Monitoring and Evaluation
CMS will closely monitor model implementation, to ensure that model interventions are consistent with model rules and plan proposals, that additional model funding is being used for the appropriate purpose, and that the model is not leading to any adverse beneficiary outcomes.  New MTM encounter data will be utilized to both monitor ongoing compliance with approved intervention plans and assess whether the plan interventions are correlated with outcomes such as mortality, emergency department utilization, hospital readmissions, or beneficiary satisfaction measures.

The evaluation will include the collection and analysis of qualitative and quantitative data in order to understand the context of the programs and to capture the nuances occurring at the sites.  For the quantitative analyses, a longitudinal case-control study design will be used. Three years of pre-model data will be compared with three to five years of performance data collected at quarterly and annual increments during the model. Similar Part D plans that are not selected to participate in the model will be included in the comparison group. These comparison group plans will be selected to match the participating Part D plans along a variety of measurable dimensions, including but not limited to patient- and market-specific characteristics.

Eligible Applicants
The model will be open to qualified stand-alone basic plans in the test regions with a minimum enrollment of 2,000 enrollees. The plan must have been offered in at least three annual coordinated election (open enrollment) periods prior to the open enrollment period for CY 2017. All plans within the test regions that meet these minimum criteria, are not under sanction or designated consistently low-performing, pass program integrity screening, and have a Part D summary score of three stars or higher will be eligible to participate on a voluntary basis.  A PDP sponsor choosing to participate in the model test must participate in all test regions in which a qualifying plan is offered each year.  A plan sponsor may exit the model after the completion of any one year, but none may join after the first year.  All applicants who meet these criteria and who submit proposals that meet CMS minimum criteria will be accepted into the model – there is no cap on the total number of participating plans.

Plans with a summary score of less than three stars will be considered on a case-by-case basis.  Any plan with a Part D summary score below three stars will be required to provide additional documentation in order to participate in the model.  Specifically, any such plan must justify how its model participation would align with the Part D quality strategy and support its efforts to improve its quality performance. The ultimate decision on the plan’s participation in the model would be at CMS’s discretion, based on the best interests of the Medicare beneficiaries. Any such plans approved to participate in the model may also be subject to additional monitoring requirements, and should consider their participation in the model probationary.

Application Process
In general, CMS will review applicants’ proposed interventions and justifications to ensure that they meet a minimum threshold of clinical and operational plausibility, are consistent with the utilization assumptions in the actuarial estimates, and that they are not likely to lead to adverse or unintended consequences.  Proposed interventions that fail to meet this standard will not be approved.   Model participant selection is not competitive.  CMS will admit all interested stand-alone PDP sponsors that timely apply to the model test, provided each sponsor and its proposed participating plan meet the model’s participation criteria, and its programmatic proposal is acceptable to the Innovation Center.  The Innovation Center expects to enter into model agreements in September 2016 following the signing of other Part D contract documents.

More information about the Enhanced MTM model test can be found in the model’s announcement, available at http://innovation.cms.gov/initiatives/enhancedmtm/.  Please also save the date for a webinar on the Enhanced MTM model test, to be held on October 21, 2015. Registration information will be available on the same site.

CMS will accept applications for the Enhanced MTM via a Request for Applications (RFA), to be released shortly.  Once released, application materials will be available at: http://innovation.cms.gov/initiatives/enhancedmtm/.