Medicare Prescription Drug Benefit: Part D

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Medicare Prescription Drug Benefit Part D

• Health Disability Advocates
• Stephanie Altman, J.D.
• 312-223-9600 Ext. 15
• www.hdadvocates.org
• www.makemedicarework.org

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Drug Options for Medicare Consumers in 2006

• Three ways for Medicare Consumers to get
  Prescription Drugs
• Employer-sponsored retiree or union health plans.
• 88 billion in incentives for employers to keep
  providing benefits.
• Medicare Part D Prescription Drug Plans (PDP).
• Medicare Advantage plans with drug coverage.

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Medicare Part D Drug Coverage Basics

• Starting in January of 2006, many Medicare
  Consumers will get their drugs through the Part D
  Prescription Drug Benefit.
• Medicare Consumers must identify, select and
  enroll in a private Prescription Drug Plan (PDP)
  before December 31, 2005.
• Plans contract with Medicare to provide drug
  benefit by regions (must be at least state-wide).
  17 PDPs and 11 MA-PDs have been approved in
  Illinois.
• Each plan negotiates its own prices and decides
  which drugs will be offered.
• Low-income consumers on Medicaid will be
  auto-enrolled in one of the basic plans if they
  do not select a plan before December 31, 2005.

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Medicare Part D Basics

• There is a penalty if you dont enroll when first
  eligible
• for most existing Medicare consumers sign up is
  between Nov 15, 2005 and May 15, 2006
• exception if beneficiary has coverage that is
  creditable (at least equivalent to Part D) from
  retiree plans offered by employers or unions or
  covered by their employer if still working.
• Employers or unions must send enrollees notice of
  whether their retiree/employee plan is creditable
  by November 15, 2005.

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Medicare Part DDrug Plans and Their Formularies

• Formulary and Plan Finder is on CMS website at
  www.cms.hhs.gov
• PDPs are required to carry at least two drugs for
  each of the 209 drug therapy categories.
• Should carry majority of six classes of drugs
  antidepressants, anti-psychotics,
  anticonvulsants, HIV/AIDS, anti-neoplastics,
  immunosuppressants.
• PDPs can change drug formulary at any time with
  60 days written notice to enrollees or sooner if
  drug is provided in interim.
• Some pain killers will not be provided by any PDP
  including Benzodiazepines, Valium, Xanax but
  still provided under Medicaid and Illinois Cares
  Rx Plus.

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Medicare Part D PDP Benefit Management Tools

• Plans can control costs by using various tools to
  steer enrollees to less costly formulary drugs
• Tiered co-payments
• Different cost-sharing for brand vs. generics
• Can require enrollee to pay 100 of cost
• Generic substitutions
• Prior approval/Prior authorization
• However, there are limitations on benefit
  management tools that can be used if an enrollee
  has previously been taking medications in the six
  classes of protected drugs.
• There are also guidelines for pharmaceutical
  transition procedures for persons who are on
  Medicaid or on a specific drug regimen prior to
  enrolling in a Medicare PDP.

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Medicare Part D Formulary Exceptions

• Process for PDP to pay for non-formulary drug
• Prescribing doctor determines that any formulary
  drug not as effective, adverse effects, or both
• Process to get prescribed drug at lower tier with
  lower co-pay
• Prescribing doctor determines lower-tiered drug
  not as effective, adverse effects or both
• ONLY ALLOWED ONE EXCEPTION PER DRUG
• These are the regulatory guidelines but each PDP
  may have a separate exceptions procedure if it
  meets the regulatory guidance.

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PART D---BASIC COVERAGE

• The actual PDP plans look different from the
  standard coverage.The standard coverage is below
• Individual pays premium.
• Individual pays first 250 of drug costs
  (deductible)
• Individual pays 25 of costs between 250 and
  2250 (500)
• Individual pays 100 of costs between 2250-5100
  (2850) the donut hole
• Individual pays 5 of costs over 5100.
• State Pharmacy programs and Patient Assistance
  Programs can help pay for costs and those
  payments will count towards the individuals
  true out of pocket costs to meet catastrophic
  limit. However, ADAP program payments do not
  count towards TrOOP.

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Medicare Part Dextra help

• Designed to help pay for cost sharing of basic
  benefit. Also called the Low-Income Subsidy.
• Full extra help Partial extra help
• Full extra help Pays for everything except small
  co-pay
• Partial extra help Pays for some of the cost
  sharing and expenses during donut hole
• Some consumers will automatically get extra help
  others will need to apply depending upon income
  level and eligibility for Medicaid or the
  Medicare Savings Programs.

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Part D Full Benefit EligiblesAuto-Enrollment in
Extra Help

• Certain categories of individuals will be
  automatically enrolled in the full extra help
  program.
• These individuals include those enrolled in
  Medicaid (including a Medicaid Buy-In) or a
  Medicare Savings Program (QMB, SLIB, QI-1).
• Although auto-enrolled for extra help, these
  individuals will still need to sign up for a PDP
  or they will be assigned to a PDP by December 31,
  2005 if on Medicaid or have enrollment
  facilitated by May 15, 2006 if only on a Medicare
  Savings Program.

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Medicare Part D extra help---Application Required
for All Others
Partial extra help
No extra help
Full extra help
Income 150 Above FPL
Income- Up to 135 FPL Assets -6000/individual
9000/couple
Income 135 -149 FPL Assets -
10,000/individual 20,000/couple

• Sliding scale premium assistance
• 50 deductible
• No Doughnut Hole
• 15 Co-Insurance up to 3,600 OOP (2/5 co-pay
  above)

Not Eligible for extra help

• Premium assistance
• No deductible
• No doughnut hole
• 2/5 co-pay up to 3,600 OOP (1/3 if under
  100 FPL and no co-pay for LTC)

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Extra help How to Apply

• Social Security responsible for enrolling in the
  extra help program
• Sent letters to those that are expected to be
  eligible beginning in June, 2005.
• Many ways to enroll written application,
  on-line, phone
• Local DHS offices must also accept extra help
  applications and process them if requested by
  applicant (See DHS Policy Memo)
• CMS responsible for helping people enroll in Part
  D plans
• As well as handling auto-enrollment for extra
  help and in Part D for dual eligibles and MSP
  enrollees
• CMS and SSA are sharing data information with the
  States on auto-enrollment of dual-eligibles
  spenddown population and MSP enrollees. Should
  be able to look up enrollment at SSA but, if in
  doubt, apply for extra help.

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Proposed Rules ? extra helpAppeals Process

• Initial Determination (60 days to appeal)
• Hearing Conducted by Phone unless applicant does
  not want phone conference and then case review
  only (can present evidence and be represented -
  60 days to appeal)
• Appeal to Federal District Court
• DHS Appeal Process applies for those applications
  processed by the State.

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STATE WRAP AROUND PROGRAMS What Happens to
SeniorCare and CircuitBreaker?

• New legislation created Illinois Cares Rx Basic
  and Plus.
• Illinois will coordinate the state program with a
  subset of available prescription drug plans and
  MA-PDs.
• All current enrollees will be enrolled in new
  program but must enroll in a prescription drug
  plan that has signed a coordination agreement
  with Illinois to receive full wrap around
  benefits and must apply for extra help.
• Illinois will send notice to all current
  enrollees telling them which PDPs to choose from
  to apply for extra help and to provide asset
  information to allow state to apply for extra
  help on their behalf if need be.
• Costs will stay almost the same.
• Formularies may be different because they
  correlate with the formulary in the PDP.
• Remember Non-Medicare beneficiaries will have no
  change in benefits.

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What is Illinois Cares Rx?

• Helps to pay for Medicare Part D for individuals
  over age 65 or under age 65 and disabled and
  under 225 FPL.
• Pays cost-sharing if person is not eligible for
  extra help or if extra help does not cover all
  expenses.
• Plus plan replaces SeniorCare and pays for PDP
  drugs only and non-formulary drugs such as
  Bezodiazepines and Basic plan replaces
  CircuitBreaker and pays for 10 classes of PDP
  drugs only (cardiovascular and diabetes drugs are
  included.)
• Rules have not been issued yet.

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Illinois Cares Rx Basic and Plus Specifics

• State pays for basic premium, deductible, and
  drug costs except for co-pays up to 1,750 a
  year. Then the enrollee pays 20 of drug costs
  between 1,750-5,100 and 5 of drug costs after
  5,100.
• Co-pays remain 2 for generic and 5 for brand
  name.
• State will coordinate coverage with a subset of
  PDPs and auto-enroll Illinois Cares Rx recipients
  in a coordinated PDP by December 31, 2005 if CMS
  grants approval.
• State will apply for extra help for Illinois
  Cares Rx recipients throughout 2006.

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Medicare Part D Implementation Important
Timelines

• May to August 2005 Extra help applications will
  be sent to potentially eligible individuals by
  the Social Security Administration.
• June 2005 Notices will be mailed to dual
  eligibles and individuals in MSPs to inform them
  they are eligible for extra help and will be
  automatically enrolled.
• October 15th All Medicare recipients will
  receive information on drug plans available in
  their area.
• November 15th Medicare recipients can enroll in
  a PDP and retirees must receive notice of
  creditable coverage.
• January 1, 2006 Part D Begins and Dual
  Eligibles automatically enrolled
• May 15, 2006 Last Day to Enroll without Penalty
  unless have creditable coverage and MSP
  facilitated enrollment.