Medicare Part D: Where Do We Stand? Where Are We Going?
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Medicare Part D:
Where Do We Stand?
Where Are We Going?
Richard G. Stefanacci, DO, MGH, MBA, AGSF, CMD
M ay 15, 2006, the end of
the initial enrollment pe-
riod for the new Medi-
care prescription drug program, has
come and gone, but much still re-
Table 1.
Medicare Part D Enrollment Period
Enrollment Type Affected Group Time Period
mains unaddressed and unclear re-
garding Medicare Part D. Such a Regular All nonspecial Medicare IEP: November 15, 2006
enrollment beneficiaries that are eligible • May 15, 2006
seemingly simple thing as the May for Medicare D can use this AEP: November 15, 2006
15th deadline itself, which some process • December 31, 2006
47% of seniors were unaware of,
isn’t actually the deadline for every- Special Accepted as dually eligible, or in the Ability to enroll
one. The Centers for Medicare and enrollment LIS and Hurricane Katrina evacuees outside AEP
Medicaid Services (CMS) is allowing Dually eligible, those living in LTC Ongoing ability to
3 groups to enroll after the end of facilities (SNF, ICF, MR), and change plan
the initial the May 15th deadline. Hurricane Katrina evacuees
These groups are the dually eligible Facilitated enrollees: SPAP, LIS Can make one
(those having both Medicare and Medicare beneficiaries change of plan
Medicaid), those approved to re- AEP=annual election period; ICF=intermediate care facility; IEP=initial enrollment period; LIS=low-income
ceive the low-income subsidy, and subsidy; LTC=long-term care; SNF=skilled nursing facility; MR=mental retardation; SPAP=state
pharmaceutical assistance program
certain victims of Hurricane Katrina
(Table 1). Given that these groups
represent especially frail and vul-
nerable seniors, a similar group— each passing day, many issues are with Medicare still lack prescription
those entering a long-term care fa- being resolved and becoming clear- drug coverage (Table 2).
cility—is being considered for er, while new issues are arising and However, at the end of the day,
eligibility to enroll outside the set causing more uncertainty. the real numbers to look at are
enrollment periods without being those showing how many Medicare
subjected to a financial penalty. Numbers Don’t Add Up beneficiaries moved from no or
In addition, the exact number of There is still a great deal of confu- limited coverage prior to Medicare
those who have enrolled in the var- sion with regard to the numbers of Part D to now having prescription
ious prescription drug plans (PDPs) enrollees in the Medicare Part D drug coverage. In fact, the over-
is still unclear. Legislative and regu- program. As of January 1, 2006, all whelming majority of people al-
latory changes that are likely com- 43 million elderly and disabled peo- ready had coverage, either through
ing will have a significant effect on ple on Medicare were given access state Medicaid programs, employer-
how Medicare Part D evolves. And to the Medicare Part D prescription sponsored plans, or managed care
for prescribers, perhaps the biggest drug benefit. The Bush Administra- organizations before the introduc-
question is, “How will all of this af- tion has claimed that as of June 11, tion of Medicare Part D. Yet accord-
fect our ability to dictate what med- 2006, nearly 38 million people were ing to Medicare’s own figures, just
ication gets dispensed?” One thing receiving benefits under Medicare slightly more than half (9 million)
that is clear, however, is that with Part D and that 5 million people of these 17.7 million Medicare ben-
12 Assisted Living Consult July/August 2006eficiaries, including more than 3
million beneficiaries eligible for the Table 2.
low-income subsidy program still Total Medicare Beneficiary Drug Coverage
(June 11, 2006)
lack coverage today (Table 3).
The numbers that did add up as
expected followed the “Pareto Prin- Drug Coverage (Medicare or Former Employer)
ciple.” This principle states that “a • Stand-alone Prescription Drug Plan (PDP) 10.37
limited group will control the vast • Medicare Advantage (MA-PD) 6.04
majority of a resource.” In the case
• Medicare/Medicaid [autoenrollment] 6.07
of Medicare Part D, the limited
group is comprised of UnitedHealth • Medicare Retiree Drug Subsidy (RDS) 6.90
Group and Humana, and the re- • FEHB Retiree coverage 1.60
source is their members. Together, • TRICARE Retiree coverage 1.86
these plans provide coverage for • Veteran’s Administration (VA) coverage 2.01
45% of those enrolled in PDPs and • Indian Health Service coverage 0.11
33% of those enrolled in Medicare • Active workers with Medicare secondary payor 2.57
managed care organizations. United-
• Other retiree coverage, not enrolled in RDS 0.10
Health Group was able to accom-
• State pharmeceutical assistance programs 0.59
plish this through its relationship
with AARP, Walgreens, and organiza- Total 38.22
tions with a strong loyalty, as well
UNINSURED TOTAL 5.00
as through name recognition among
seniors. Humana was able to
achieve its enrollment numbers
based on price and strong marketing Table 3.
efforts by State Farm and Walmart. Total Medicare Beneficiary Drug Coverage
(June 11, 2006)
Changes for Next Year
Changes for 2007 have been pro- Millions
moted by many disenfranchised Total Beneficiaries Eligible for Low-income Subsidy (LIS) 13.20
stakeholders. In the summer of Less: Drug coverage from Medicare or former employer 9.26
2003, politicians responded posi- • SSA LIS approved 1.80
tively to proposed improvements in • Other deemed full/partial duals and SSI recipients 7.50
access to medications for millions
of American seniors, which in turn Less: Additional sources of creditable drug coverage 0.59
translated into votes in the fall. • Veteran’s Administration (VA) coverage 0.35
However, seniors remain confused • Indian Health Service coverage 0.11
over the benefit, as well as the vast • SPAP creditable coverage 0.13
number of prescription plans avail- Total: Remaining LIS-eligible beneficiaries 3.25
able, and providers have become
frustrated over the individualization SPAP=state pharmaceutical assistance program; SSA=Social Security Administration; SSI=Supplemental
Security Income
of plans’ coverage, which takes up
a great deal of their valuable time.
These areas of concern are forcing cessing specific medications. This Legislative Changes
changes both from legislators, as has resulted in 70% of physicians The legislative changes that will
well as CMS guidance. spending 20% or more time on ad- determine where Medicare Part D
During 2007, CMS plans to apply ministrative tasks related to Medicare is headed now fall into several
increasing pressure on PDPs to pro- Part D. This was demonstrated fol- brackets, addressing enrollment is-
vide greater access to medications, lowing CMS’ guidance to PDPs sues, cost-sharing issues, access is-
as well as to improve their opera- that after March 1, 2006, Part D sues, and process issues. Concern-
tional efficiency. Much of this is the plans may make only maintenance ing enrollment issues, several
direct result of provider and Medi- changes to their formularies, such as pieces of legislation are calling for
care beneficiary frustration. A recent replacing brand name with new opening the enrollment period to
study showed that 94% of physicians generic drugs or modifying formula- allow for some groups to enroll af-
remain confused about Medicare ries as a result of new information ter May 15, 2006. While this is un-
Part D, especially with regards to ac- on drug safety or effectiveness. likely, there is a strong possibility
July/August 2006 Assisted Living Consult 13that the late enrollment penalty of incentive for nursing home-
1% for each month without cover- eligible seniors who live outside of
age will be voided during the first skilled nursing facilities. This is be-
year of the program. Another en- cause dually eligible beneficiaries
rollment issue that needs to be residing in skilled nursing facilities
considered is related to the ability Seniors remain currently are exempt from copay-
of a beneficiary to change plans. confused over the ments, whereas those living out-
Many seniors have argued that they side such facilities are responsible
enrolled in PDPs based on incor- Medicare benefit, for making copayments. This has
rect information either from the as well as the resulted in a significant disincen-
prescription drug plan, their em- vast number of tive for nursing home-eligible indi-
ployer, or even the CMS Web site. viduals utilizing home- and com-
Legislation would permit a one- prescription plans munity-based waivers to live
time change of plan enrollment available. outside skilled nursing facilities.
during 2006, as well as allow re- With regard to medication ac-
tirees back into their employer- cess issues, some changes have oc-
sponsored plans. curred without legislative action.
In terms of cost-sharing issues, CMS announced that Part D PDPs
legislation would eliminate the dis- may make only maintenance
R ELATED D ISCUSSION : “We are tracking the accuracy of plan data—which has now
achieved very high levels.”
On May 22, 2006, CMS Administrator Mark B. McClellan, MD, “We’ve established ‘business processes’ with plans so they
PhD, addressed the National Community Pharmacists Associa- can quickly and automatically confirm the current eligibility
tion’s (NCPA) 38th Legislation and Government Conference, re- and co-pay status of beneficiaries in our systems, and amend
flecting on where we’ve been...and where we are going with information if they are having difficulty with prescriptions.”
Medicare Part D and the Deficit Reduction Act (DRA). A summa- “Consequently, we have seen major declines in the rate of
ry of and excerpts from those remarks follow. casework requests we are getting, particularly related to dual
“As we shift our focus from enrollment and initial imple- and low-income subsidy eligibility and enrollment.”
mentation of the Medicare drug benefit to integrating the new “Since January, wait times on our 1-800-MEDICARE customer
prescription benefit with our broader initiatives on promoting service line have consistently averaged under 2 to 4 minutes.
prevention and high quality care, we will need to continue to Even with the extraordinary interest on May 15—when we shat-
work together (with pharmacists) just as closely.” tered our previous record of around 400,000 calls by handling
“During the past 2 years, pharmacists have been on staff, for over 640,000 calls in one day—we achieved an average wait
the first time ever, in the CMS central office and every regional time of less than 13 minutes. By the way, that previous record
office. I want to be clear that this was not a one-time effort to was set on January 2.”
gear up for the drug benefit—it’s a permanent change in the “We’ve seen major improvements in the prescription drug
level of pharmacist involvement in the management of our pro- plans, with the vast majority of plans now answering most cus-
grams. Pharmacy perspectives are now an essential and integral tomer and pharmacist calls in less than 5 minutes.”
part of our agency, just as prescription drugs are an absolutely “We listened to pharmacists concerns about co-branding
essential part of modern medicine and now, for the first time, an with drug store logos on cards. Accordingly, to build on the
integral part of Medicare.” steps we have already taken to enable Medicare beneficiaries
“While we are still tabulating final enrollment numbers, we to find out about convenient community pharmacies in each
can report that more than 38 million people with Medicare now drug plan—and to avoid any potential enrollee confusion
have good, secure coverage for prescription drugs. Enrollment in about where they can purchase their medication—co-branding
Part D-related coverage accounts for over 32 million of these on pharmacy benefit cards will be prohibited for the upcoming
beneficiaries.” plan year.”
“Because of our partnership with you, CMS was able to “We also intend to work closely with the pharmacy commu-
move quickly to address Part D implementation issues on nity to implement the pharmacy provisions in the Deficit Re-
many fronts. Many of the initial start-up difficulties were the re- duction Act (DRA). As you know, the DRA will affect the way
sult of millions of late-month enrollments and plan switches. the Medicaid program calculates its Federal Upper Limit, used
We’ve addressed this in part by getting the message out about to determine the maximum level of reimbursement for drugs
allowing a reasonable amount of time between when someone with generic competitors. This provision of the DRA represents
enrolls in a plan and when that person can use coverage.” a clear opportunity for states to save money on generic prod-
“We’ve also taken further steps with the drug plans and uct acquisition costs. But actual savings will be dependent up-
states to ensure accurate and complete coverage data are avail- on state actions with the new Federal Upper Limit.”
able to pharmacists when beneficiaries first show up in the “If states do not maintain the right incentives for generic
pharmacy. For example, plans are now using twice-a-month utilization, any savings will be lost to higher and more expen-
updates on coverage and co-pay status for their enrollees in sive brand-name utilization. For this reason, CMS guidance en-
the low-income subsidy.” courages states to align incentives for generic utilization and
14 Assisted Living Consult July/August 2006changes to their formularies. Legis- Controlling the Prescription
lation could take this a few steps One thing that is certain is that as
further in requiring plans to grand- a result of Medicare Part D and
father individuals on their medica- other environmental changes, such
tions for as long as they are in a PPDs have the as ePrecribing and consumer-
plan. In addition, the earliest piece driven health care, the power will
of legislation introduced called for responsibility to assure shift from the physician to other
the federal government to cover that no beneficiary will groups with regards to the control
the benzodiazepine medications, be subject to of medications being dispensed.
one of the excluded Medicare Historically, prescribers have had
Part D therapeutic classes of med- discontinuation or the first and final word in what
ications. reduction in coverage of drug is dispensed to a patient.
Finally, with regard to process the drugs they are Their decisions were based on
issues, legislation would mandate their practice of medicine and, to
certain minimum standards for currently using. some degree, their personal prefer-
PDPs to meet in areas such as an- ence dictating which medication
swering their telephones and pro- was best. Physicians would write a
viding timely feedback to patients prescription and were assured that
and prescribers. it would be filled as written. As a
consider paying pharmacists more in dispensing fees to sup- “I want to conclude by taking a step back and talking about
port state savings from greater use of generics.” the big picture for the future of retail pharmacy.”
“More financial support to pharmacists that improve quality “I know there are a lot of concerns about tighter reimburse-
and reduce costs of drug coverage and chronic disease man- ment rates per prescription. I can relate to this, having experi-
agement is actually one of the key elements of our guidance to enced the same kind of tightening in third-party payments in
states in our ‘Road Map to Medicaid Reform,’ released in my own medical practice.”
March, and I encourage you to take a look at the details.” “I know there is some interest in potentially seeing new
“Under another provision of the DRA, CMS is required to kinds of payment regulation from the Federal government. But
collect and publicly post Average Manufacturer Prices (AMPs) speaking as a physician, government regulation of payments is
to better inform the states and the public about the true price not something I’d recommend to any health professional.”
of prescription drugs. The goal of this DRA provision is to cap- “I’ve experienced first hand the blunt effort to reduce health
ture the most accurate pricing data possible to assure that the care costs by cutting payments to providers, because no one
Federal government and State Medicaid programs are paying made the effort to find a better approach to keep quality health
appropriately for generic drugs.” care affordable. I’ve lived through the frustration of watching my
“Pharmacists have made it clear to us that unless AMPs are workload increase while payment rates not only went down, but
defined and calculated accurately and include only prices that got locked in and didn’t keep up to support new and promising
are available to the ‘retail class of trade,’ AMPs will not accu- directions in higher-quality care.”
rately reflect prices available to retail pharmacies. We know “Tighter payments per service, like tighter payments per
that an imprecise definition of AMP, especially if publicly post- prescription, have been part of a fundamental trend in health
ed, will be misleading to state Medicaid directors and others care systems around the world. Such tightening of payment
who will use this as a reference point for setting pharmacy re- rates has occurred universally—universally when government
imbursement.” gets involved in setting payments. But it’s not a long-term so-
“We also recognize that pharmacists are especially con- lution to the challenges we are facing today, and in particular,
cerned about the DRA provision that calls for AMPs to be post- the challenges in community pharmacy.”
ed beginning on July 1, 2006, because the more specific defini- “Instead, focusing on spending health care dollars better,
tion of AMP would not be reflected in the current AMP data as rather than just on reducing payment rates to reduce health
reported by manufacturers.” care costs, deserves strong support from Medicare, and we are
“Consequently, I am announcing today that CMS will not going to make it happen. Pharmacists and pharmacies have al-
publicly release the current AMP figures. We do expect to ready demonstrated the great value they provide in the imple-
share pricing information with the states, as we do confiden- mentation of the Medicare drug benefit. They have also shown
tially with other types of drug pricing data, but only for pur- they can add much more—helping people find lower cost
poses of helping them set up their billing systems appropriately drugs like generics and therapeutic alternatives, helping people
and not for the purposes of setting reimbursements.” with multiple illnesses understand how to use their medications,
“Instead, we are focusing our efforts on developing a proposed and improving compliance.”
regulation that will assure an accurate and effective AMP calcula- “All of these things can improve quality of care and reduce
tion ahead of implementation of the drug payment reforms.” overall health care costs. This helps us get to a health care sys-
“We will be releasing this revised definition for public com- tem that provides the right care for every person, every time.”
ment as a proposed rule. And we will also be developing an ini- To view Dr. McClellan’s remarks in their entirety, visit the
tial round of AMP data based on the new definition for public CMS Web site at: http://www.cms.hhs.gov/apps/media/press/
comment.” release.asp?Counter=1866.
July/August 2006 Assisted Living Consult 15appropriate medications.
Table 4. The federal government, includ-
Excluded Medicare Part D Medications
ing CMS, has the ability to dictate
formulary recommendations. This
Specific Excluded Classes has resulted in some products hav-
• Over-the-counter (OTC) medications ing a forced inclusion on a
• Barbiturates Medicare Part D formulary, while
• Benzodiazepines others have been excluded. Thus,
• Prescription vitamins (except Niasin® and Niaspan®, as well as certain analogs under the Medicare Modernization
and prenatal vitamins) Act, the federal government has de-
veloped a list of certain medica-
Specific Excluded Uses tions that are excluded from cover-
• Weight-related (except when used to treat certain disease states, such as obesity age under Medicare Part D (Table
and anorexia) 4), while at the same time mandat-
• Fertility ing that plans cover substantially
• Cosmetic all medications in 6 drug classes
• Symptomatic relief for cough or colds (Table 5). The ultimate result of
federal government involvement,
Those Covered by Part A or Part B for Specific Instances either through legislation or CMS
regulations, is more or less access
to certain drugs for Medicare bene-
With the implementation of ficiaries. This shift from prescribers
Table 5.
Protected Medication Medicare Part D, PDPs have the having unobstructed authority in
Classes Under Medicare responsibility to assure that no deciding what drug is dispensed to
Part D beneficiary will be subject to dis- their patients will continue to build,
continuation or reduction in cover- moving rapidly to the groups that
age of the drugs they are currently control the dollars and rules.
• Antidepressants
using, except for clear scientific
• Antipsychotics and cost reasons, including the So Where Is Medicare Part D
• Anticonvulsants availability of a new generic ver- Headed?
• Antiretrovirals sion of the drug. This has resulted Unfortunately, the answer to this
• Immunosuppressants in prescription plans aggressively question is not one that will be an-
• Antineoplastics using utilization tools, such as pri- swered based on a sound clinical
or authorization, step therapy, basis or even a sensible health poli-
quantity limits, and tiering, to di- cy. Instead, it will be determined
direct result of Medicare Part D, rect access to preferred agents. by Washington politics and is very
this decision has shifted to other These forces may prove to be much dependent on the results of
groups having a much greater say much more powerful than a physi- the next few elections. Much de-
in what particular medication ulti- cian’s pen in obtaining specific bate has centered on removal of
mately is dispensed to the patient. medications. As a result of these the noninterference clause, which
Additionally, in the past, on the incentives and utilization tools, prohibits the federal government
basis of value judgments, patients PDPs will be the most powerful from negotiating prices with phar-
or the payor played a role in the entity in the process that decides maceutical companies. Whatever
decision of what medication was which medication is dispensed. direction Medicare Part D takes,
dispensed. When the patient or Although some of the utilization clearly it will represent a change for
their payor was faced with a deci- tools being used by PDPs will re- all stakeholders involved in the
sion about coverage of a specific sult in improved medication use, care of seniors. ALC
medication, the decision was be- others may represent inappropriate
tween choosing a preferred brand barriers to medication access. Un- Richard G. Stefanacci, DO, MGH, MBA,
name medication and its less ex- fortunately, PDPs are siloed in be- AGSF, CMD, is Editor-in-Chief of Assist-
pense alternative. If the patient or ing responsible only for direct ed Living Consult and the Founding Ex-
payor did not see the value in the medication costs. As a result, their ecutive Director of the Health Policy
higher cost of the branded medica- goal is to reduce drug utilization— Institute of University of the Sciences
tion over the less expense alterna- not to improve overall care— in Philadelphia, PA. He also held the
tive, the medication was changed which will drive them to imple- position of CMS Health Policy Scholar
from the physician’s original order. ment barriers to access even 2003-2004.
16 Assisted Living Consult July/August 2006You can also read
