The Pharmacy Safety Net and Medicare Part D

1
The Pharmacy Safety Net and Medicare Part D

• Presented by
• Kimberley Fox,
• Institute for Health Policy
• October 23, 2006

2
State Survey - Methods

• Funded by the National Pharmaceutical Council
• Medicaid/SPAP Fall 2005 survey
• 24 existing SPAP programs
• 14 Medicaid agencies (representing 66 of
  Medicaid drug spend), 11 in states with SPAPs.
• Response rate _at_96
• Follow-up survey of all SPAPs in Summer/Fall
  2006.
• 19 out of 20 SPAPs responded
• Findings reflect responses at time of survey
  completion.

3
Key Differences between Part D and Previous State
Pharmacy Benefits

• Medicaid
• May face higher copayments
• Loss of guaranteed access if they cant afford
  copayments
• No coverage of excluded Part D drugs offered by
  many Medicaid programs
• Formularies may not include drugs covered under
  Medicaid
• Loss of coverage of denied drugs during appeal.
• More limited pharmacy networks
• State Pharmacy Assistance Programs (SPAP)
• Different cost-sharing - Varies for LIS/ non-LIS
  eligible
• Formularies may not include drugs covered under
  SPAP
• More limited pharmacy networks
• No coverage of excluded Part D drugs.

4
Potential Safety Net Role for States in Part D

• Medicaid
• May assist duals in getting into plans that best
  meet their needs
• With state-only s cover differences in
  cost-sharing including
• Premium assistance above LIS benchmark
• Copayments
• Cover excluded drugs (federally required if
  Medicaid covers for non-duals) eligible for
  federal matching s.
• Cover off-formulary/PDP denied drugs or during
  appeals.

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Potential Safety Net Role for States in Part D

• State Pharmacy Assistance Programs (SPAP)
• May assist SPAP enrollees in getting into plans
  that best meet their needs and applying for
  low-income subsidies.
• Can contribute toward Part D gaps
• Premium assistance (LIS or full premium)
• Cost sharing - Deductibles, copayments, donut
  hole (TROOP)
• Off-formulary/PDP denied drugs or out-of network
  pharmacies
• Part D excluded drugs
• If SPAP conforms to federal rules, state
  cost-sharing contributions can count toward
  enrollees true out-of-pocket costs (TROOP).

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Medicaid Fall 2005 Survey Results

• Generally not wrapping-around Part D for the
  dual-eligibles (exc. Part D excluded drugs).
• Not assisting with assignment to Part D plans
  beyond CMS random assignment. (ex. Maine)
• No plans to offer short-term emergency drug
  supply, but in Jan 2006, most Medicaid programs
  did provide short-term emergency coverage due to
  significant problems during the transition.

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Filling Part D Gaps for Duals Selected Medicaid
Plans 2006
NY
NY
NJ
NJ
NY,NJ
NY,NJ
NJ
NJ
Source Part D Survey of SPAP and Medicaid
Directors, Fall 2005.
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SPAP Fall 2005 Survey Results

• Most SPAPs maintaining coverage to hold enrollees
  harmless.
• Most SPAPs mandating enrollment in Part D plans
  and application for LIS to be eligible for SPAP
  but many not taking active role.
• Considerable variation in what states are
  electing to supplement under Part D.
• SPAP savings expected, but level of saving
  unclear.
• Few states expanding eligibility.

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SPAP Plans Once Part D Begins
10
Few States Expanding SPAPs to New Groups
Source Part D Survey of SPAP and Medicaid
Directors, Fall 2005.
11
Specific Part D Gaps Filled by SPAPs
Source Part D Survey of SPAP and Medicaid
Directors, Fall 2005.
12
Part D Excluded Drugs Covered by SPAPs, 2006
13
SPAP Efforts to Enroll Members in Part D Plans
N17
For LIS and/or Part D Enrollment
Source Part D Survey of SPAP and Medicaid
Directors, Fall 2005.
14
SPAP Efforts to Enroll Members in LIS
N17
For LIS and/or Part D Enrollment
Source Part D Survey of SPAP and Medicaid
Directors, Fall 2005.
15
Anticipated SPAP Low Income Subsidy Eligible
Based on Income, 2005
16
Actual SPAP Low Income Subsidy Eligible, 2006
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Summary of State Actions

• States generally exercising caution wait and see
  approach.
• Short-term emergency coverage (Medicaid/ some
  SPAPs)
• Medicaid largely not filling Part D gaps for
  duals beyond transition, except Part D excluded
  drugs.
• SPAPs holding existing enrollees harmless, but
  not expanding benefits/eligibility
• Only a few states starting new SPAPs

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Part D State Best Practices

• Medicaid
• Cover off-formulary if medically necessary (NJ,
  NY)
• Assigning duals based on drug history. (ME)
• Holding duals harmless to existing Medicaid
  copayments.
• Eliminating MSP asset test to get more LIS deemed
  eligible (ME,VT)
• SPAPs
• Maximizing fedl s by getting more enrollees
  into LIS
• Interventions to improve plan fit
• Assigning to plans based on drug history (e.g.
  NJ, ME, etc)
• conduct cost/benefit of paying non-LIS premiums
  (VT, CT)
• Using SPAP savings to fill other gaps
• Asset ineligible LIS Up to 200 FPL disabled
  (NV)
• Expand benefits to other rx uninsured non-elderly
  (e.g. WY/MD)
• Starting a new SPAPs (HI, MT) good return on
  investment

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Discussion/ Policy Implications

• Duals
• Getting in a plan that covers most drugs is
  important if most states not providing safety net
  coverage for off-formulary.
• Potential reduction in compliance/adherence to
  necessary drugs.
• Even relatively modest increases in cost-sharing
  could reduce access.
• More administrative hurdles to overcome.
• Need for research to assess adverse health impact
  of Part D on duals with and without state
  supplementation.
• SPAPs
• More protection extended to hold these people
  harmless
• Bigger marginal impact than duals
• Need to move toward greater simplification of
  coordination w/ Part D and LIS to maximize use of
  state dollars.
• Federal govt needs to clarify policy on working
  w/ preferred plans. Several states appear to be
  doing and more could benefit from reduced
  administrative costs of working with a limited
  of plans
• If not, focus on better plan fit/ paying higher
  than benchmark premiums where appropriate.
• Monitor impact of SPAP off-formulary coverage in
  states that are covering.

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Further Information

• For copies of this presentation
• kfox_at_usm.maine.edu
• Full report of Fall 2005 survey findings
  available at
• http//muskie.usm.maine.edu/m_view_publication.jsp
  ?id3409