Medicare Part D Prescription Drug Coverage
Medicare's new prescription drug benefit, Medicare Part D, began on January 1, 2006. The new prescription drug plans (PDPs) are a form of insurance coverage for brand name and generic prescription drugs. Plans differ by region and range in coverage, premium, and structure options. Enrollment is optional; initial open enrollment ended May 15. The next open enrollment period begins November 15, 2006.
Since the start of Part D, a majority of the 42 million Medicare beneficiaries have begun to receive their drug coverage through private PDPs. Over six million individuals with Medicare and Medicaid coverage were auto-enrolled into a PDP. More than eight million beneficiaries have enrolled in a stand-alone PDP. With all the changes, many providers are experiencing increased administrative demands. The Academy recognizes the value of your clinical time and has identified the following resources to help you and your staff stay current on Part D issues.
Medicare Part D Topics:
Implementation
By now you and your office are probably familiar with the new needs of your patients with Part D coverage. Adjusting to Medicare Part D may mean having to learn new formularies, changing medication regimens, working with drug plans on prior authorization or appeals, and sorting through patient questions on this new program.
Part D Formularies
No two Medicare Part D plans are alike. Subject to approval, PDPs are allowed to make changes to their formularies. Adjusting to new and changing formularies is not easy. Epocrates, a medical software company, offers free PDP formulary information available for download to computer and/or PDA. Epocrates is frequently updated and includes tier and step therapy details for each plan.
You should know that your dually eligible Medicare and Medicaid patients may be able to obtain drugs excluded by Medicare Part D coverage through your State Medicaid Program (see CMS website).
Prior Authorization
Under the Medicare Modernization Act, Medicare drug plans are allowed to decide the circumstances that require prior authorization of prescribed medication. Unfortunately there is no one set of standards that will trigger a prior authorization request, though common reasons are: dosages that are outside a plan's "safety limit," the drug prescribed may also be classified as Part B, and plans want to verify a diagnosis before covering certain treatments.
The Centers for Medicare and Medicaid Services (CMS) has developed a universal appeals and authorization form for providers to use in their communication with drug plans. To help reduce the number of prior authorization requests, CMS has recommended that physicians write the diagnosis and the words "Part D" on the prescription itself.
Exceptions and Appeals
Should a patient require an off-formulary drug, an exception to a plan's tiered cost-sharing structure, or an exception to a cost management tool (i.e. step therapy requirement, dose restriction, or prior authorization requirement), you or your patient may file an exception request. All drug plans are required to have a timely exceptions and coverage determination process. The standard turnaround for coverage determinations is 72 hours, and 24 hours for expedited appeals. After the plan makes a coverage determination regarding the exception request, you or your patient may challenge the decision through the appeals process. CMS has compiled the exceptions and appeals contact information for all the Part D plans to assist providers in this process. For more information, see CMS issue paper on appeals.
Background
Drug Plan Structure
In each of the 34 Medicare prescription drug plan (PDP) regions, there are as many as 20 private organizations offering multiple drug plans. Some regions may have up to 50 plans. Part D plans are offered either as stand-alone plans (noted as PDPs), or as Medicare Advantage plans with prescription drug coverage (MA-PDs). During the enrollment period, it's very likely that patients will feel overwhelmed with information. Know that as their physician, you can discuss specific aspects of a patient's drug regimen or the implications making adjustments, but you cannot recommend a specific plan or PDP organization. If a patient needs help making a decision, direct them to community-based resources or 1-800-MEDICARE. Make sure patients and their families know their drug regimen so they can make an informed decision. Additionally, make sure patients understand which, if any, of their drugs are most important to their treatment.
Drug Plan Coverage
Drug plans differ in coverage and premium level. Using formularies, agreements with pharmacy networks, drug companies, and tiered payment structures, PDPs can offer unique drug discounts and pharmacy options. All drug plan formularies must include at least two drugs from each category and class, as set forth in the United States Pharmacopeia (USP) model guidelines (view). Specifically, all formularies include all drugs from the following drug classes: anti-neoplastics, anti-HIV/AIDS drugs, immunosuppressants, anti-psychotics, anti-depressants, and anti-convulsants. By law, Part D drug plans cannot cover barbiturates, benzodiazepines, fertility drugs, drugs prescribed for weight loss, weight gain or hair growth, over-the-counter drugs, or prescription vitamins (except prenatal vitamins and fluoride preparations).
Cost Overview
The Medicare prescription drug plans work like other forms of insurance. Beneficiaries pay a monthly premium ranging from less than $20 to $35 in 2006. After reaching a $250 deductible, Medicare will cover 75 percent of drug costs up to $2,250. After this point, the beneficiary pays 100 percent of drug costs up to a total of $5,100, or $3,600 in out-of-pocket expenses. Medicare then covers 95 percent of further drug costs.
What Part D Means to Your Patients
Your patients likely fall into one of the following categories:
No prescription drug coverage - The choice for these patients is to join a stand-alone prescription drug plan and keep any other current insurance (i.e. Part B coverage and some Medigap plans), or to join a combined PDP/health coverage plan such as Medicare Advantage or a Medicare Health Plan (formerly called Medicare+Choice). These patients may also elect to do nothing. Note that patients who did not enroll in a PDP during the initial open enrollment period will be subject to a lifetime premium penalty if they subsequently decide to enroll.
Drug coverage through an employer, union, VA - Patients with existing coverage through a former employer, union, or Veterans Administration (VA) received notification telling them if their coverage was considered "credible" or not. This means if their coverage was considered "at least as good as" the standard Medicare prescription drug coverage they would be free to maintain that coverage while reserving the right to later switch to a Medicare PDP without penalty. It's important to note that patients with credible coverage may have better coverage than a Medicare PDP could offer and should be cautioned against dropping it. Patients whose coverage is not credible, however, would be subject to the same options as your patients without drug coverage.
Dually eligible for Medicare and Medicaid - Your patients who previously had their drug costs paid for by Medicaid were automatically enrolled in a Medicare PDP. These patients have reduced or no premiums, reduced or no deductibles, no gaps, and will have to pay very little or nothing for most prescriptions. These patients also represent the most vulnerable population as the transition to a Medicare drug plan is phased in. Starting last November, dual eligible patients were notified by mail regarding the change of their coverage. Before the end of the year, over six million beneficiaries were auto-enrolled in a PDP, a process requiring the coordination of CMS, Social Security, and State Medicaid offices. In most areas, the decision to enroll individuals into the various plans was made randomly, and therefore may not be the best fit for that patient. As their physician, be aware that these patients may elect to switch to a PDP that better fits their needs. Also be aware that some patients may not know what plan they are enrolled in and that due to oversight, some patients may not have been enrolled at all.
Limited income and resources - Patients with limited resources and incomes less than $14,355 (or $19,245 for married couples) may qualify for a Low-Income Subsidy (LIS), also referred to as extra help. Unlike dual eligible patients, individuals in this category are not automatically enrolled and must apply for extra help through the Social Security Administration or your local State Medical Assistance Office. Please note that these patients must apply for this assistance in addition to separately enrolling in a drug plan. If a patient is turned down for a Low-Income Subsidy, however, it does not mean they are ineligible to join a PDP. You should know that LIS-approved patients who join a Part D plan after the initial enrollment period will not be subject to a premium penalty.
Comments and Questions
We want to hear from you if you are having difficulty working with drug plans or having trouble prescribing drugs for your patients with Part D coverage. Please contact Amy Kaloides at akaloides@aan.com for more information.