Medicare Part D

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Medicare Part D

• Emily A. Boohaker, MD
• Associate Professor of Medicine
• Division of General Internal Medicine

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Medicare Part DRoad Map

• Overview
• Relevance
• Changes
• Key points

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Medicare Part D

• Patient
• Member
• Beneficiary

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MEDICARE BASICS

• Know your A, B, Cs, and D!
• A Hospital/Skilled Nursing Facility (SNF)
• B Physician visits, outpatient services,
  
• durable medical equipment and limited
  drugs
• C Medicare Advantage Plans--Managed Care
• for parts A and B
• D Prescription Drug Benefit--Outpatient

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Medicare Modernization Act of 2003

• Phase 1 Medicare Approved Drug Discount
• Card Program (June 2004-Dec
  2005)
• Phase 2 Medicare Prescription Drug Benefit
• (began January 2006)

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Medicare Part DRelevance

• 42 m Medicare Beneficiaries
• 85 65
• Russell Clinic
• 1000 Medicare Beneficiaries
• 1/3 VIVA Medicare
• 1/2 Dual Eligible (Medicare and Medicaid)
• TKC--GIM
• 1400 Medicare Beneficiaries
• 1/2 VIVA Medicare

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What is a Part D Drug?

• Available by prescription
• FDA approved for medically accepted indication
• Syringes, needles, alcohol swabs, gauze
• associated with insulin injections

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Whats Not a Part D Drug?

• Weight loss/gain
• Fertility
• Cosmetic/Hair Growth
• Cough/Cold
• Prescription vitamins/minerals
• Over the counter
• Barbiturates
• Benzodiazepines
• Covered under Parts A or B

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What is a Part D Formulary?

• Prescription drugs commonly used by Medicare
  beneficiaries
• Cover at least two drugs in each therapeutic
  class
• CMS must oversee and approve
• Cost-sharing
• Coverage determination process
• Can remove/move tier level with 60 day notice

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What is a Part D Formulary?Six Critical
Categories

• Anticonvulsants
• Antidepressants
• Antipsychotics
• Antineoplastics
• Immunosuppressants
• AIDS/HIV

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Part D Standard Benefit Design
5
Medicare Pays 95
Catastrophic Coverage
5,100 Total Drug Costs
2,850 Gap Beneficiary Pays 100
No Coverage
Partial Coverage up to Limit
2,250 Total Drug Costs
25
Medicare Pays 75
Deductible
250 Deductible
32.20 monthly average premium
Equivalent to 750 in out-of-pocket spending
(trOOP) Equivalent to 3,600 in trOOP
Out-of-Pocket Spending
Medicare Part D Benefit
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Example

• 65 yo with hyperlipidemia and HTN on Lipitor
  (200/mo) and Lisinopril (50/mo)
• Month 1 Reaches 250 deductible
• Months 2-9 Patient pays 62.50/mo X 8 mos
• Plan pays 187.50/mo X 8
  mos
• Months 10-12 Patient pays 100
• Year 1 trOOP costs 250 500 750 1500
• Patient never reaches catastrophic level

250
500
1,500
750
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SIMPLE ?????
NO..
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Medicare Part DOptions

• Prescription Drug Plans (PDPs)
• Work with traditional Medicare
• 17 PDPs offering 42 plans
• Medicare Advantage Prescription Drug Plans
  (MA-PDs)
• 6 MA-PDs offering 16 plans
• Medicare Advantage member automatically
  disenrolled if chooses PDP!!

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Medicare Part D Options

• Plans have their own perks
• co-pays
• deductibles
• premiums
• formularies
• gap coverage

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VIVA Medicare Plus Rx

• NO Premium
• 250 deductible
• Co-payment tiers
• Generic/Tier 1 5
• Preferred Brand/Tier 2 18
• Non-preferred Brand/Tier 3 43
• Specialty Drugs/Tier 4 25

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Example

• 65 yo with HTN, DM, hyperlipidemia, and
  depression with VIVA Medicare. Meds include
  Metformin, Lipitor, Atacand, HCTZ, Flonase and
  Zyrtec. How will the drug benefit work?

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Example

• VIVA Medicare Plus RX
• No monthly premium
• 250 deductible
• Metformin 5
• HCTZ 5
• Lipitor--tier 2 18
• Flonase--tier 3 43
• Zyrtec--tier 3 43
• Atacand--tier 3 43

Metformin -5 HCTZ- 5 Simvastatin-5
43
157
Fluticasone -5
Fexofenadine-5
Cozaar-18
www.vivahealth.com
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Medicare Part D Enrollment

• Initial Enrollment Period
• Nov 15, 2005 - May 15, 2006
• Annual Enrollment Period
• Nov 15 - Dec 31
• Special Enrollment Period
• Move out of service area
• Involuntary loss of credible coverage

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Medicare Part D

• Penalties

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Medicare Part DPenalties

• Lock-out Penalty
• Wait for open enrollment effective Jan of
  following year
• Premium Penalty
• 1 added to national average monthly premium
  for life

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Medicare Part D Special Circumstances

• Dual Eligibles (Medicare/Medicaid)
• Medicaid stopped paying Dec 31, 2005
• Enrollment mandatory
• Auto enrolled
• Allowed to switch plans monthly
• No deductibles or coverage gaps
• Lower co-pay (1/3, 2/5)
• If a drug was covered by Medicaid and not by Part
  D then Medicaid will continue to cover

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Medicare Part DExceptions/ Appeals/Grievances

• CMS allows plans to set medical necessity
  coverage determinations
• Formulary exceptions
• Tier exceptions
• Physician documentation required
• 72 hr turn around time

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Medicare Part DWhat has happened?

• 31 million enrolled by May 2006
• Coverage info not always available
• Pharmacy problems down by 95
• Waiting time for 1-800-Medicare decreased

• N ENGL J MED 20063542312-15

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Medicare Part DWhat is important to patients?

• Deductible vs no deductible
• Flat co-pay vs co-insurance
• Coverage in donut hole
• Breadth of formulary
• Extent of prior auths

N ENGL J MED 20063542312-15
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Part D Standard Benefit Design2007
5
Medicare Pays 95
Catastrophic Coverage
5451.25 Total Drug Costs (5,100)
3051.25 Gap Beneficiary Pays 100
No Coverage
2,400 Total Drug Costs (2,250)
Partial Coverage up to Limit
25
Medicare Pays 75
Deductible
265 Deductible (250)
27.35 monthly average premium (
32.20 )
Equivalent to 3,850 in trOOP
Out-of-Pocket Spending
Medicare Part D Benefit
Office of Actuary CMS May, 2006
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Medicare Part D2007
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Medicare Part DResources

• Medicare
• 1-800-MEDICARE
• www.medicare.gov
• www.CMS.hhs.gov
• AARP
• www.aarp.org
• Social Security
• 1-800-772-1213

• Kaiser Family Foundation
• www.kff.org
• SHIP
• 1-800-AGE-LINE
• www.ageline.net
• VIVA Medicare
• www.VIVAhealth.com

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Medicare Part D Key Points

• Encourage members to solicit help from many
  resources available
• If in a Medicare Advantage plan, discourage from
  choosing a PDP unless want to switch to
  traditional Medicare
• Assist patients by prescribing lower tier/lower
  cost generic drugs
• Implementation poses big challenges for
  insurance, beneficiaries, and providers