Medicare Part D: Challenges and Opportunities Consultant Pharmacists

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Medicare Part D Challenges and Opportunities
Consultant Pharmacists

• Brad Kile, PhD
• October 22, 2005

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Overview

• How did we get here?
• History, Need, Passage of MMA, Current Status
• Contracts, Incentives, and the New Marketplace
• Enrollment of Beneficiaries into Part D
• Florida Perspective
• Formularies
• Medication Therapy Management Programs
• Bottom Line for Consultant Pharmacists
• Q A

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History of Medicare Prescription Drug Benefit
Issue
2003 Medicare Prescription Drug, Improvement,
and Modernization Act signed into law by Bush
December 8, 2003
2002 Republican-sponsored bill to create a
Medicare drug benefit (H.R. 4954) passes the
House of Representatives, 221-208 Several
competing proposals for a Medicare drug benefit
fail to pass the Senate
2000 Republican-sponsored bill to create a
Medicare drug benefit (H.R. 4680) passes the
House of Representatives, 217-214
1969 HEW Task Force on Prescription Drugs
Report issued
1993 Clinton proposed a new Medicare Rx benefit
as part of the Health Security Act
2000 Clinton releases plan to provide drug
coverage under a new Medicare Part D
1965 Medicare enactedno outpatient
prescription drug coverage included
1989 Repeal of MCCA
1988 Passage of Medicare Catastrophic Coverage
Act (MCCA)drug benefit included
1965 1970 1975
1980 1985 1990
1995 2000 2003
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Where We Are

• Plan Sponsors announced, Sept. 23
• PDPs offered by Sponsored announced, Sept.
  30
• Plan marketing began, Oct. 1
• Enrollment begins Nov. 15
• Benefits begin Jan. 1, 2006
• Penalty for late enrollment, May 2006
• 1 premium increase for each month
• penalty stays with beneficiary

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Medicare Part D

• Benefit is VOLUNTARY
• Standard Benefit
• Premium 35 monthly (average)
• Deductible 250 yearly
• Cost sharing 25 of costs between 251 and
  2,250
• Coverage gap (a.k.a. donut hole) beneficiary
  pays 100 of costs between 2,250 and 5,100
• Catastrophic coverage after 3,600 of
  out-of-pocket expenses beneficiary pays greater
  of 2/5 copay or 5 coinsurance.

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Medicare Part D

• TrOOP True out of pocket payments
• Calculated to track when beneficiary hits donut
  whole and catastrophic thresholds
• Excludes non-covered drugs
• Excludes monthly premiums
• Includes payments made on behalf of beneficiary
  (e.g. state program)

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Medicare Part D

• Low-Income Benefit
• Below 150 Federal Poverty Level
• Premium sliding scale
• Deductible 50 yearly
• Cost sharing 15 of costs through 5,100 in
  total costs
• Coverage gap none
• Catastrophic coverage 2/5 copay

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Medicare Part D

• Low-Income Benefit
• Below 135 FPL
• Premium none
• Deductible none
• Cost sharing 2/5 copay
• (1/3 below 100 FPL)
• Coverage gap none
• Catastrophic coverage 2/5 copay

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Number of Part D Plans

• Part D
• 34 PDP regions (never split a state)
• Medicare Advantage (Part C)
• 26 MA-PD regions
• Multiple PDPs in each region
• Competition

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Number of Part D Plans

• Over 1,000 bids submitted to CMS
• September 23 approval of Plan Sponsors
• National Perspective
• Each region 11-20 Plan Sponsors
• Important each sponsor can offer more than one
  PDP
• 10 national Plan Sponsors
• Each region, gt1 PDP has premium lt 20/month
• (expect Alaska)

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National Plan Sponsors

• Aetna
• CT General Life Insurance Co.
• Coventry/First Health/Cambridge Life
• Medco
• Memberhealth
• Pacificare
• Silverscript
• Wellpoint
• United Health Care
• Wellcare Health Plans

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Florida Perspective

• 18 Sponsors in FL 10 National Sponsors plus
• Americas Health Choice
• BC/BS of FL
• Humana
• Marquette Life Ins. / Pennsylvania Life Ins.
• QCC Insurance Co.
• Sterling Life
• United American Ins. Co.
• Universal Health Care, Inc.

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FL PDPs

• What does this mean?
• With 18 sponsors, competition should be robust
• 43 PDP options in FL
• Details emerging as formularies and coverage are
  revealed through PDP marketing
• CMS web-based tool offers glimpse of formularies
  and coverage

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PDPs and Dual Eligibles

• FL PERSPECTIVE
• Six Sponsors eligible to receive auto-enrolled
  dual eligibles, 9 PDPs
• Two Part Process within Each Region
• Duals randomly and evenly allotted to these 6
  Sponsors.
• Duals within Sponsors allotment randomly and
  evenly assigned to Sponsors PDPs below CMS
  benchmark

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Dual Eligible Auto-Enrollment

• Oct. CMS send letter notifying duals of their
  auto assignment
• Nov. 15 First day any beneficiary can be
  enrolled into Part D
• Nov, 15 Jan 1 Auto-Enrolled Duals can
• Do nothing Benefits begin Jan. 1
• Withdraw from Part D no benefits on Jan. 1
• Switch to another PDP
• Must have premium lower than regions average to
  avoid additional charges
• Dec 1 Pharmacies identify PDP of beneficiary
  through E1 query using NCPDP 5.1 protocol.
• Jan 1 Benefits begin

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Florida PDPs

• Impact is great in FL
• Approximately 70 of nursing home residents
• Federal government becomes the primary payer
• FL Medicaid removed from oversight and
  administration and will play limited role
• Existing state assistance programs
• Clawback payments
• Medicaid rebates from manufacturers

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Enrollment

• Standard Benefit
• Open enrollment, Nov 15 thru May 15, 2006
• After May 15, penalty period starts
• Low-income (non-duals)
• Facilitated enrollment, May 15, 2006
• Those that have not yet enrolled

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Enrollment

• Special Enrollment Period (SEP)
• SEP Allowed for these Reasons
• Dual Eligible
• Moving into, residing in or leaving a LTCF
• ALF is not LTCF
• Moving out of LTCF, have 60 days to select new
  plan
• Moving outside of a Plans region
• Leaving or joining a managed care plan
• Most common, not exhaustive list

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Enrollment

• Enrollment authorized representative of
  beneficiary
• Role of pharmacists / nursing facility
• Steering of beneficiary?
• How many Part D plans will a pharmacy have to
  deal with?

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Marketing Guidelines

• Pharmacists/providers CAN provide
• Names of plan with which they contract and/or
  participate
• Information and assistance in applying for the
  low income subsidy
• Specific formulary info
• PDP-specific info and marketing material

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Marketing Guidelines

• Pharmacists/providers CANNOT
• Direct, urge, or attempt to persuade a
  prospective enrollee to enroll in a plan based on
  financial or other interest of pharmacist
• Offer any inducements to enrollees to persuade
  them to select a plan
• Collect enrollment applications
• Health screen when distributing information
• Expect compensation in consideration for the
  enrollment of a beneficiary

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Enrollment

• Tools
• PDP Marketing Materials and websites
• Medicare Today Coalition
• www.medicaretoday.org
• CMS Resources
• www.medicare.com
• Plan estimator
• Dual eligibles auto-enrolled

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Formularies

• Specific to each PDP
• Nonformulary drugs will require an exceptions
  process
• Formulary drugs subject to cost-containment tools

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Excluded Medications

• Benzodiazepines
• OTC medications
• Drugs to cause or treat weight loss
• Barbiturates

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Excluded Medications

• H.R. 3151 introduced to add coverage for benzos
• States may cover through Medicaid
• States may cover other products as well through
  assistance programs
• Medicaid reform initiatives makes sustainable
  support from states unlikely

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Medications That Must Be Covered

• All drugs from six classes to be covered by PDPs
  
• Antipsychotics
• Antidepressants
• Anticonvulsants
• Anticancer
• Immunosuppressants
• HIV/AIDS

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Part D Pharmacists and LTC Pharmacies

• Bottom Line
• Part D may require
• Contracting with multiple PDPs
• Individual drug pricing
• New software
• Expanding drug inventory
• Opportunities with MTMS

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Review and Resources

• Bookmark these sites
• www.medicare.gov
• www.PharmacistsConnection.com
• www.MedicareToday.org

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Medication Therapy Management Services

• Opportunities for Pharmacists

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MTMS

• What is it?
• Program of drug therapy management furnished by
  pharmacist (or other providers) designed to
  assure that drug plans are appropriately used to
• Optimize therapeutic outcomes
• Reduce risks of adverse events

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Medication Therapy Management Services

• PDPs required to develop medication therapy
  management programs (MTMP) for targeted
  beneficiaries
• PDPs have flexibility to develop MTMP, but must
  report details to CMS
• CMS will not impose performance measures, but
  may identify best practices
• CMS standards may come after data can be
  evaluated 2007 or later

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Medication Therapy Management Services (MTMS)

• Are PDPs prohibited from designing their MTMP to
  shift market share as opposed to improving
  therapeutic outcomes?
• ANSWER CMS states Plan D sponsors must
  implement MTMPs designed to optimize therapeutic
  outcomes at the lowest possible costs.

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MTMS

• Who is eligible?
• Targeted Beneficiaries
• Have multiple chronic diseases
• Taking multiple Rx drugs and
• Likely to incur high costs
• (2006 estimate is 4K or 333/month)
• MTMS is part of benefit for targeted
  beneficiaries no cost to beneficiary
• MTMS for non-targeted beneficiaries is not
  covered by Part D

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MTMS

• Who provides MTMS?
• Pharmacist or other health professional
  qualified to provide such services.
• PDPs have discretion to decide methods and
  providers that are best for providing MTMS

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MTMS

• Who pays?
• NOT Medicare. Pharmacists do NOT have provider
  status under the SSA
• Prevents Medicare from directly paying for
  pharmacist-provided services
• CMS leaves payment arrangements up to
  negotiations between PDPs and providers

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MTMS Challenges

• Assure access to MTM Services by Medicare
  beneficiaries who need them
• Assure competent provision and desired outcomes
  (CGP?)
• Provide adequate and appropriate payment without
  paying for unneeded services

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Bottom Line on MTMS

• Still up to the PDPs
• Likely to see wide variation in approaches
• CMS staying out of the equation for now
• Experimental period begins Jan 1.
• Once PDPs, CMS, pharmacists adapt to new system,
  MTMS may evolve and expand

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QUESTIONS
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Thank you!