The Medicare Drug Benefit The Management of Medical Practice

Prescription Drug Improvement and Modernization Act Dorothy Della Sherwood, M.D. Presbyterian Hospital of Dallas 2/22/2006 MMA • This year, Medicare introduced the prescription drug benefit-the most significant change in Medicare coverage since the program‟s inception…which will help patients and doctors work together to alleviate symptoms and reduce the rate of complications from serious illness. » Mark B. McClellan, M.D., PhD., NEJM 12/05 MMA • America‟s older citizens have been barraged with educational and marketing initiatives for various drug plans….an October poll indicated that 61% did not understand the program and 54% did not intend to sign up. » Richard L. Kravitz, M.D. NEJM 12/05 UC Davis MMA CMS Goal for the Drug Benefit 1. Ensure all beneficiaries have access to high-quality, affordable drug coverage 2. Provide continuous access to drugs needed by the chronically ill 3. Create a competitive, transparent marketplace MMA • Competitive/Transparent – Medicare Prescription Drug Plans ( MPDP) negotiate with drug companies to purchase drugs at a discounted price which they pass on to the beneficiary. – CMS is counting on this competition to hold down prescription prices MMA • When choosing a PDP, one should compare – Deductible – Monthly Premium – Co-pay for Rx – Formulary – Gap Coverage – Mail-in or local pharmacy MMA • The minimum prescription-drug benefit required by Medicare – – – – – – No more than $250.00 deductible A monthly premium ( average of $37.00/mo) Pay 25% of the next $2000.00 in costs ($500.00) Pay 100% of the next $2,850.00 – the gap Total out of pocket costs could reach $3,600.00/yr Catastrophic coverage begins and beneficiary pays only 5% MMA • Competition has resulted in better coverage than those that have been mandated. • WWW.CMS.GOV MMA • Help for People with Limited Incomes – People with lowest income and resources • Pay no premiums or deductibles • Have small or no co-payments – Eligibility • <$1,197 per month for an individual with <$11,500 in assets (excluding house) • <$1,604 per month for a couple with <$23,000 in assets (excluding house) MMA • How to apply for extra help. – SSA mailed applications to those who may be eligible – www.ssa.gov • All dual eligible ( Medicare and Medicaid) are automatically enrolled MMA • What about Medigap? – Information was sent to people with Medigap giving them the following choices: • Keep Medigap • Join Medicare Prescription Drug Plan and delete drug coverage from Medigap • Drop Medigap and join Medicare Advantage MMA • What about Employer/Union Coverage? – Choices include • Keep coverage offered by employer/union • Join MPDP • Join Medicare Advantage Plan – Advise to contact Employers/Union • There is a tax free subsidy provided by Medicare to the Employers who offer coverage • Employers may contract with a MPDP to provide coverage MMA • Specific Drug Coverage mandated by MMA – Cancer medications – HIV/AIDS treatments – Antidepresssants – Antipsychotics – Anticonvulsants – Immunosuppressants MMA • Excluded Drugs – Weight Loss Drugs – Fertility Drugs – Cosmetic hair growth products – Cough suppressants – Benzodiazepines – Barbituates – Vitamins – Non-prescription drugs MMA • Formularies – Most MPDP have formularies – All formularies must include at least 2 drugs from every category of drug – The formulary must be approved by CMS – Tier 1 drugs have the lowest cost sharing – There must be an exception procedure for tiered formularies – to obtain a drug at a more favorable cost or obtain a drug not on formulary MMA PDP Formulary Available at www.epocrates.com http://formularyfinder.medicare.gov/formul aryfinder/selectstate.asp MMA • Perils – Exception Request: • Patient is unable to take a statin due to myopathy and therefore requires Zetia • PDP considers Zetia a „Step Drug‟ after maximizing statin • The enrollee can request an exception to the plan‟s step-therapy requirement MMA • Process: – PDP pharmacy initiates with fax entitled “Request for Prescription Information or Change” – Physician initiates request to the PDP with a “Request for Prescription Exception” – Exceptions should be reviewed in 24 hours if the need is immediate MMA • Plan Contacts for appeal: – www.cms.hhs.gov/PrescriptionDrugCovGenIn • There are 5 levels of appeal and it may indeed end up in the Federal Courts! – – – – – Redetermination by plan Reconsideration by a Medicare drug coverage QIC Administrative Law judge Medicare Appeals Council Federal District Court MMA • Why should the Medicare beneficiary enroll now? – Late enrollment results in a 1% increase in premium per month for every month the person was eligible but did not join. – This penalty will be paid forever! – This penalty does not apply to individuals with prescription drug coverage that equals the Medicare coverage MMA • Individual Choice • Last date for enrollment is May 15th, 2006 • All Medicaid beneficiaries were automatically enrolled by Jan 1st if they had not chosen a plan. MMA • So what will this cost? BILLIONS over the next 8 years. – Payments to MPDP : 448 to 479 – Low Income Subsides: 192 to 239 • 35% of the Medicare Population – Spending on health care is expected to increase from 1.8 trillion dollars in 2003 to 3.6 trillion dollars in 2014 MMA • Web sites for your patients – www.medicare.gov – www.cms.hhs.gov – www.ssa.gov • Phone – 1-800-MEDICARE (800-633-4227) – SS – 1-800-772-1213