Medicare Prescription Drug Benefit

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Medicare Prescription Drug Benefit
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New Medicare Prescription Drug Benefit

• Prescription drug coverage added to Medicare
• Begins January 1, 2006
• Adds Part D to Medicare Parts
  A, B, and C
• Voluntary

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The Need for Drug Coverage

• Seniors spending on medications continues to
  increase over time.
• A direct relationship exists between drug
  coverage and the use of medications.
• Efficient use of medications can improve health
  outcomes and reduce expenditures on
  hospitalizations and related costs.

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Medicare Beneficiaries Prescription Drug Coverage
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Skipping Doses of Medication Among Chronically
Ill Seniors With and Without Drug Coverage
Percent of seniors who skipped doses of medicine
to make it last longer
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Medicare Beneficiaries Out-of-Pocket
Prescription Drug Spending 2000-2013
Average annual out-of-pocket drug costs among the
Medicare population
Projected
Without Medicare drug benefit. Source
Actuarial Research Corporation analysis for The
Kaiser Family Foundation, June 2003 and
November 2004.
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Part D Responding to the Need
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Part D Expanded Medicare Coverage

• Medicare Part A includes
• Coverage for inpatient hospital, SNF, home
  health, hospice
• Medicare Part B includes
• Coverage for physician and other practitioner
  services, some drugs administered in a
  physicians office, outpatient hospital, durable
  medical equipment
• Medicare Part C
• The managed care option in Medicare and covers
  all parts of Medicare
• Medicare Part D covers
• Outpatient prescription drugs

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What You Need to Know About Medicare Part D

• To get coverage, a beneficiary must choose and
  sign up in a plan (unless covered by comparable
  employer coverage).
• Beneficiaries can begin signing up November 15,
  2005 through May 15, 2006
• If beneficiaries dont sign up by May 15, 2006,
  they may have to pay more if they sign up later
• Beneficiaries who sign up by December 31, 2005
  will have coverage that begins January 1, 2006.
• Plans and the monthly premiums they charge vary.
• People with limited incomes and resources are
  eligible for extra help.

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Who Can Get Part D Coverage?

• All Medicare beneficiaries seniors, certain
  disabled persons, and those with ESRD are
  eligible for Part D coverage.
• Most beneficiaries must actively sign up for a
  Medicare prescription drug plan.
• Beneficiaries with prescription drug coverage
  from an employer or union that is at least as
  good as the standard Medicare coverage can keep
  it.

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When Can Beneficiaries Get Coverage?

• Beneficiaries can begin signing up for a drug
  plan on November 15, 2005 through May 15, 2006
• Information about plans becomes available in
  October 2005
• Plans begin marketing
• Medicare You handbook sent to all beneficiaries
• Plan-specific information available from plans,
  www.medicare.gov, 1-800-MEDICARE (1-800-633-4227)
• Beneficiaries who sign up by December 31, 2005
  will have coverage that begins January 1, 2006.
• Beneficiaries who dont sign up by May 15, 2006
  may pay more if they choose to sign up later.

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Types of Drug Plans

• There are two types of Medicare Prescription drug
  plans that beneficiaries can choose to enroll in
• Prescription Drug Plan (PDP) only covers
  prescription drugs and is used with traditional
  Medicare
• Medicare Advantage Prescription Drug Plan (MA-PD)
  is only available to beneficiaries who choose to
  receive their Medicare benefits through Medicare
  Advantage health plans. Medicare Advantage plans
  cover expenses for doctor visits and hospital
  stays in addition to prescription drugs.

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What is the Benefit Design?

• Medicare Prescription Drug plans will offer
  insurance coverage for prescription drugs.
• Drug plans will vary in what prescription drugs
  are covered and how much enrollees will pay.
• All plans will provide at least a standard level
  of coverage that is set by Medicare.
• Some plans may offer additional coverage for
  higher costs.

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Standard Coverage and Costs (for 2006)

• Beneficiaries will pay
• a monthly premium (average 32/month)
• 250 annual deductible
• 25 of drug costs after the deductible up to
  2,250
• 100 of drug costs from 2,250 until the
  beneficiarys out-of-pocket spending has reached
  3,600
• 5 of drug costs after the beneficiary has spent
  the 3,600

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Drugs Covered by a Plan

• Plans must provide necessary medications for
  Medicare beneficiaries. CMS evaluated each
  formulary to assure that plans do not discourage
  enrollment by beneficiaries with certain
  conditions.
• CMS expects that formularies will contain all or
  substantially all of drugs within six key
  therapeutic classes anti-HIV/AIDS drugs,
  anti-cancer drugs, antipsychotics,
  antidepressants, anticonvulsants, and
  immunosuppressives.

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Drugs Covered by a Plan

• Plans can establish limits on the medications
  that prescribers can access through the use of
  formularies, cost-sharing levels, step therapy,
  and prior authorization.
• CMS must approve all changes to formularies.
• Plans must notify enrollees of any changes to
  their formularies or cost-sharing levels at least
  60 days in advance of such changes taking effect.

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Drugs NOT Covered by Medicare

• Benzodiazepines
• Barbiturates
• Most OTC drugs
• Prescription vitamins and mineral products,
  except prenatal vitamins and fluoride
  preparations
• Agents used for symptomatic relief of cough and
  colds
• Agents used for cosmetic purposes or hair growth
• Agents used to promote fertility
• Agents used for anorexia, weight loss, or weight
  gain
• Drugs covered under Medicare Parts A or B

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Exceptions Appeals

• Exceptions
• Beneficiaries/providers may request an exception
  for a drug not on a plans formulary or to reduce
  the cost-sharing.
• Plans must grant exceptions regarding drugs not
  on the formulary when the plan determines that it
  is medically appropriate to do so.
• Expedited determinations must be made within 24
  hours for enrollees with serious health
  conditions, and 72 hours for a standard decision.
• If a plan denies an exception request, the plans
  decision may be appealed.

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Exceptions Appeals

• Appeals
• If a beneficiary is denied an exception request,
  the beneficiary may file an appeal.
• There are up to 5 levels of appeal
• 1 Redetermination by Part D Plan
• 2 Reconsideration by Independent Review Entity
  (IRE)
• 3 Administrative Law Judge (ALJ)
• 4 Medicare Appeals Council
• 5 Federal District Court
• If at any point the beneficiary is successful in
  his or her appeal, the drug is covered and the
  appeals process ends.

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Extra Help for Beneficiaries with Low Incomes

• Beneficiaries may qualify for extra help with
  their Medicare prescription drug costs
  premiums, deductibles, and copays an average of
  2,100 a year.
• Both income and resources (like savings accounts,
  stocks, bonds, and real estate, except the
  beneficiarys home) are counted in identifying
  beneficiaries who qualify.

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Eligibility for Low-Income
Assistance

• Maximum Levels for Eligibility
• Income Assets
• Single 14,355 10,000
• Married 19,245 20,000
• At 150 of the federal Poverty Level, higher for
  residents of Alaska and Hawaii
• Excludes primary home, automobiles, and 1,500
  burial allowance.
• NOTE Figures represent 2005 levels, as
  determined by the Federal Government

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Low-Income Assistance

• Beneficiaries can contact the Social Security
  Administration or their State Medicaid office to
  find out if they qualify.
• To get an application, visit the Social Security
  website at www.socialsecurity.gov or call
  1-800-772-1213 and ask for one.
• Some people qualify automatically people with
  Medicare and Medicaid, people with Medicare
  receiving SSI, and people who belong to a
  Medicare Savings Program.

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Low-Income Assistance

• Medicare beneficiaries who also are eligible for
  Medicaid benefits
• Pay no prescription drug plan premiums
• 0 deductible
• 1/3 per prescription cost-sharing (0 in LTC)
• No coverage gap
• Other beneficiaries with low income up to 150 of
  poverty level (14,355 single/19,245 married)
• Sliding-scale premium reduction
• 0 or 50 deductible
• 2/5 or 15 per prescription cost-sharing
• No coverage gap

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Other Assistance

• State Pharmacy Assistance Programs (SPAPs)
• SPAPs provide assistance to certain state
  residents for drug costs.
• May cover premiums, deductibles, cost-sharing,
  and drugs not covered under Part D
• Available in 21 states

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Special Features for Other Beneficiaries

• People with Medicare and Medicaid
• Greatest financial assistance
• Can change plans at any time
• No cost-sharing if in a long-term care facility
• Beneficiaries in long-term care
• Can change plans when entering or leaving a LTC
  facility

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Transitioning

• Each Medicare prescription drug plan must develop
  its own transitioning plan, subject to CMS
  approval.
• Fill-first
• Specific plan for beneficiaries entering LTC
• CMS has recommended that plans provide a
  transitioning period of one prescription (30
  days) for enrollees in the community and longer
  for LTC residents

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Medication Therapy Management Program (MTMP)

• Each Medicare prescription drug plan is
  responsible for establishing an MTMP, and to
  provide Medication Therapy Management Services
  (MTMS) to targeted beneficiaries
• Targeted beneficiaries
• Use multiple medications
• Have multiple chronic illnesses
• Are likely to incur drug expenses over 4,000/year

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Medication Therapy Management Services (MTMS)

• MTMS may include components to increase enrollee
  compliance with a medication regimen.
• May include screening for adverse events and
  patterns of overuse and underuse.
• Will be supplied by qualified providers through a
  contract with the plan. The services and payment
  will be determined by the provider and the plan.

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Medicare Part DA 5-Step Enrollment Process

• To help your patients learn which plan is right
  for them, recommend this 5-step approach
• Prepare your information
• Your ZIP code
• A list of the medications you are currently
  taking
• Consider those medications you may need in the
  future
• Contact the Medicare staff at
• 1-800-MEDICARE
• www.medicare.gov
• Ask for information on plans in your area
• Also contact Social Security (1-800-772-1213) for
  information on the low-income subsidy

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Medicare Part DA 5-Step Enrollment Process

• 3. Contact the plans and request their
  information
• 4. Assess the specifics of the plans, and select
  one plan, if any, that seems right for you
• What are the monthly premiums?
• What is the current formulary?
• Which pharmacies are in the plans network ?
• What is the plans exceptions and appeals
  process?
• What is the plans level of drug counseling
  support?
• 5. Contact your preferred plan, request their
  application, complete it, and return it to the
  plan to get enrolled
• Note Formularies can change over time.

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Key Dates for the Medicare Prescription Drug
Benefit

• October 2005
• Medicare prescription drug plans release
  information about their plans and the coverage
  offered
• Medicare You handbook mailed to beneficiaries
• Comparative plan information becomes available
• November 15, 2005
• First day beneficiaries can sign up for a plan
• January 1, 2006
• Medicare prescription drug coverage begins for
  those who signed up by December 31, 2005
• May 15, 2006
• Last day beneficiaries can enroll

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Where Can Patients Get More Information?

• Medicare
• 1-800-MEDICARE (1-800-633-4227)
• www.medicare.gov
• Social Security Administration
• 1-800772-1213
• www.socialsecurity.gov
• State Health Insurance Counseling and Assistance
  Programs (SHIPs)

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Summary

• Consider the potential benefits of a
  well-planned, well-implemented approach to the
  introduction of the Medicare prescription drug
  benefit
• Reduced prescription drug costs for many of your
  patients particularly those with extremely
  costly prescription needs
• Greater patient satisfaction with your support
  and insight on this complex new benefit
• Reduced staff frustration and wasted time
  managing avoidable problems
• Enhanced patient outcomes
• Remember, we can all make a difference in helping
  our patients and our staffs!

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• The information contained in this presentation is
  accurate as of August 8, 2005. Please note that
  some elements of the Medicare Modernization Act
  may change or be updated over time. Please visit
  www.medicare.gov for the most current information
  on MMA.