Classification Tool for Formulary Review
At the direction of Congress through the 2003 Medicare Modernization Act (MMA), USP works with the Centers for Medicare & Medicaid Services (CMS). Under the Act, USP, at the request of CMS, and in consultation with stakeholders, constructs the USP Medicare Model Guidelines (USP MMG)—a list of categories and classes of covered Medicare Part D drugs for Medicare beneficiaries. Part D sponsors may utilize the USP MMG in the creation and submission of their drug formularies to CMS to ensure compliance with program requirements. Our work on the USP MMG is ongoing, with the most recent publication of the USP MMG v7.0 in February 2017.
USP’s Role under the Medicare Modernization Act
Under Section 1860D-4(b)(3)(C)(ii) of the Act, USP is tasked to, at the request of CMS:
- Create a list of categories and classes that may be used by prescription drug plans
- Revise such classification from time to time to reflect changes in therapeutic uses of covered Part D drugs and the additions of new covered Part D drugs.
Approximately every 3 years, USP receives a request from CMS to revise and update the USP MMG. The Medicare Model Guidelines Subcommittee of the Healthcare Quality and Safety Expert Committee (HQS EC) is the scientific body that revises the USP Medicare Model Guidelines. The HQS EC is composed of academicians, practitioners, formulary experts, and patient advocates. Through the formal public comment process, USP receives input from a wide variety of stakeholders, including drug manufacturers, regulators, health plans/PBMs, academia, and patient advocacy groups. The comments are evaluated for incorporation in a draft model which requires an approval ballot by the HQS EC before the USP MMG becomes official. During the revision process, CMS representatives actively serve as non-voting government liaisons to the Subcommittee offering the agency’s policies and implementation perspectives.
USP’s Role under the Patient Protection and Affordable Care Act
CMS, specifically, the Center for Consumer Information and Insurance Oversight (CCIIO), also uses the list of categories and classes in the USP MMG to review formularies in the health insurance marketplace under the Affordable Care Act (ACA). In order for an insurance plan to be a qualified health plan for purposes of the ACA, the plan needs to cover Essential Health Benefits (EHB), including prescription drugs. Under 45 CFR 156.122, a health plan does not provide EHB for prescription drugs unless it covers at least the greater of:
- One drug in every United States Pharmacopeia (USP) category and class; or
- The same number of prescription drugs in each category and class as the EHB-benchmark plan
A benchmark plan is selected by each state and reflects the services and limits offered by a typical employer plan in a state.
CMS Conditions of Participation
CMS Conditions of Participation (CoPs) are requirements for health care organizations to participate in and receive payment from the Medicare and Medicaid programs. CMS—the single largest payer for healthcare in the United States—ensures that the requirements of accrediting organizations recognized by CMS (through a process called “deeming”) meet or exceed the standards set forth in the CoPs. CoPs vary depending on the healthcare organization. The CoPs for hospitals and critical access hospitals explicitly address compounding standards under their section on handling of drugs and pharmaceuticals. Specifically, CMS recognizes the USP chapters on compounding as “authoritative guidance” and establishes these USP chapters – General Chapters <795> Pharmaceutical Compounding ─ Nonsterile Preparations and <797> Pharmaceutical Compounding ─ Sterile Preparations – as the minimum threshold for quality that hospitals and Critical Access Hospitals (CAHs) must meet under the Medicare program 1,2.
- CMS, State Operations Manual, Appendix W- Survey Protocol, Regulations and Interpretive Guidelines for Critical Access Hospitals (CAHs) and Swing-Beds in CAHs, Rev. 163, 10/14/16.
- CMS, State Operations Manual, Appendix A- Survey Protocol, Regulations and Interpretive Guidelines for Hospitals, Rev. 176, 12/29/17.