Medicare Part D

Elena Chan PharmD candidate, UCSFElena Chan PharmD candidate, UCSF

Tiffany Jew PharmD, MBA candidate, USCTiffany Jew PharmD, MBA candidate, USC

Overview

Background on MedicareBackground on Medicare The MMAThe MMA Medicare Part DMedicare Part D

Enrollment/EligibilityEnrollment/Eligibility CoverageCoverage Benefit DesignBenefit Design FormularyFormulary Coordination of CareCoordination of Care

Medication Therapy ManagementMedication Therapy Management

Background on Medicare

Medicare is health insurance for Americans:Medicare is health insurance for Americans: 65 years or older65 years or older Younger than 65 with disabilities or end-Younger than 65 with disabilities or end-

stage renal diseasestage renal disease 2 types of Medicare Coverage:2 types of Medicare Coverage:

Original Medicare PlanOriginal Medicare Plan Medicare AdvantageMedicare Advantage

Original Medicare PlanMedicare Part D

Prescription Drug Plan+

+

Automatically enrolled in original plan unless you enroll in Medicare AdvantageAutomatically enrolled in original plan unless you enroll in Medicare Advantage Fee for service plan -- just present your Medicare cardFee for service plan -- just present your Medicare card Monthly premiums for Part A+B depends on income and if you paid Medicare Monthly premiums for Part A+B depends on income and if you paid Medicare

taxes:taxes: Part A premium usually $0Part A premium usually $0 Part B premium no more than $161/monthPart B premium no more than $161/month

Medicare Advantage

Medicare Part DPrescription Drug Plan+

Provide the same Part A Provide the same Part A and Part B coverage but and Part B coverage but may have extra benefits may have extra benefits like dental, eye, or like dental, eye, or prescription drug plansprescription drug plans

Premiums differ by planPremiums differ by plan Have to stay “in network” Have to stay “in network”

as determined by HMO or as determined by HMO or PPOPPO

Medicare Modernization Act (MMA)

Signed into law Dec 2003Signed into law Dec 2003 ““Medicare Part D” was addedMedicare Part D” was added

Voluntary out-patient prescription drug Voluntary out-patient prescription drug plan to begin Jan 2006plan to begin Jan 2006

Can be added to Medicare (original and Can be added to Medicare (original and Advantage)Advantage)

Part A Coverage

Inpatient/hospital chargesInpatient/hospital charges ““Medically necessary” - anything needed to Medically necessary” - anything needed to

diagnose or treat a conditiondiagnose or treat a condition Critical careCritical care SNF’s, but not LTCSNF’s, but not LTC Home healthHome health HospiceHospice BloodBlood

Part B Coverage

Ambulatory/Outpatient CareAmbulatory/Outpatient Care Medically necessaryMedically necessary Ambulance, blood, am care surg, lab tests, MD Ambulance, blood, am care surg, lab tests, MD

services, DME, ER, dialysis, mental healthservices, DME, ER, dialysis, mental health Medicare-covered preventatives: lab tests, Medicare-covered preventatives: lab tests,

screenings, vaccinations to help diagnose or screenings, vaccinations to help diagnose or prevent diseaseprevent disease

Some drugs covered: immunosuppressants, Some drugs covered: immunosuppressants, clotting factors for hemophilia, some vaccines, clotting factors for hemophilia, some vaccines, erythropoetin…erythropoetin…

Part C Coverage

Also known as Medicare AdvantageAlso known as Medicare Advantage Combines the coverage of part A and B, but Combines the coverage of part A and B, but

like an HMO or PPOlike an HMO or PPO

Part D Coverage

Adding Rx Drug Benefit to Original MedicareAdding Rx Drug Benefit to Original Medicare Adding Rx Drug Benefit to Medicare Advantage Adding Rx Drug Benefit to Medicare Advantage

(MA):(MA): May already be included in MAMay already be included in MA

Administered by private plans that are reimbursed by Administered by private plans that are reimbursed by CMSCMS

Formularies are 1st reviewed by CMSFormularies are 1st reviewed by CMS Covers drugs in the most commonly used therapeutic classesCovers drugs in the most commonly used therapeutic classes Most generics coveredMost generics covered Doesn’t cover drugs already paid by Part A and BDoesn’t cover drugs already paid by Part A and B

Part D Eligibility and Enrollment

Anyone who qualifies for Medicare can get part DAnyone who qualifies for Medicare can get part D Optional to enroll, but if you do not enroll when Optional to enroll, but if you do not enroll when

you are first eligible you pay a penalty if you sign you are first eligible you pay a penalty if you sign up laterup later

2 ways to get Part D:2 ways to get Part D: Join Medicare Prescription Drug PlanJoin Medicare Prescription Drug Plan Join Medicare Advantage that includes a drug Join Medicare Advantage that includes a drug

planplan

Part D Benefit Design2007 Costs2007 Costs Out of Pocket $Out of Pocket $

For the YearFor the Year

PremiumPremium $25/month$25/month $300$300

DeductibleDeductible $265$265 $265$265

CoinsuranceCoinsurance 25% of drug costs up to 25% of drug costs up to $2400$2400

$534$534

Donut HoleDonut Hole 100% of drug costs until 100% of drug costs until you’ve paid $3850you’ve paid $3850

$3051$3051

Catastrophic Catastrophic CoverageCoverage

5% of drug costs for the 5% of drug costs for the rest of the yearrest of the year

----

Total out of pocket costs before catastrophic coverage = $4150

An example of Benefit Design

Medicare Part D Requirements

Since Part D benefits administered by private companies, CMS Since Part D benefits administered by private companies, CMS requires the following for reimbursement:requires the following for reimbursement: Formulary must cover 146 therapeutic categories commonly used by Formulary must cover 146 therapeutic categories commonly used by

this population as determined by CMSthis population as determined by CMS Formulary must cover at least 2 drugs in each of these 146 Formulary must cover at least 2 drugs in each of these 146

therapeutic classestherapeutic classes Except: must cover all or almost all Except: must cover all or almost all antidepressants, antidepressants,

antipsychotics, anticonvulsants, anticancer, antipsychotics, anticonvulsants, anticancer, immunosuppressants, and HIV/AIDS medsimmunosuppressants, and HIV/AIDS meds

If generic available, it must be on formularyIf generic available, it must be on formulary All rebates must go back to the payerAll rebates must go back to the payer Prior authorizations, step-therapy, generic sub, preferred brands OKPrior authorizations, step-therapy, generic sub, preferred brands OK CMS must review and approve all formularies in advanceCMS must review and approve all formularies in advance

Some Common Formulary Restrictions

Prior AuthorizationPrior Authorization: doctor must show that the : doctor must show that the medication is medically necessary before it is medication is medically necessary before it is coveredcovered

Quantity limitsQuantity limits: limits how many pills you can : limits how many pills you can get at a timeget at a time

Step therapyStep therapy: one or more lower cost drugs must : one or more lower cost drugs must be tried before step-up therapy drug is coveredbe tried before step-up therapy drug is covered

Non-Formulary DrugsNon-Formulary Drugs: BZD’s, barbiturates, : BZD’s, barbiturates, weight loss/gain drugs, erectile dysfunction meds, weight loss/gain drugs, erectile dysfunction meds, cough/cold meds, OTC’s, fertility drugs…cough/cold meds, OTC’s, fertility drugs…

Formulary Tier Copays

Coordination of Care

What if a person has coverage other than Medicare?What if a person has coverage other than Medicare? Medicaid: state benefitMedicaid: state benefit

Dual eligibility- Medicare beneficiary currently Dual eligibility- Medicare beneficiary currently receiving Medicaid benefitsreceiving Medicaid benefits

Medicaid drug coverage for Medicare eligibles Medicaid drug coverage for Medicare eligibles terminated December 31, 2005terminated December 31, 2005

Auto-enrolled into qualifying plans October 2005Auto-enrolled into qualifying plans October 2005

Coordination of Care

Third Party InsuranceThird Party Insurance Any other insurance will kick in before Any other insurance will kick in before

Medicare is chargedMedicare is chargedOther insurers:Other insurers:-FEHBP (Federal Employee Health -FEHBP (Federal Employee Health

Benefits Program), VA, TRICARE Benefits Program), VA, TRICARE (active duty service, retirees, family), (active duty service, retirees, family), MedigapMedigap

MediGap

In original medicare plan, fills in gaps in coverage In original medicare plan, fills in gaps in coverage for part A and B for part A and B

Can’t have drug coverage from both MediGap and Can’t have drug coverage from both MediGap and Medicare Part D coverage- one must be removedMedicare Part D coverage- one must be removed

MediGap coverage is not as good as Medicare Part MediGap coverage is not as good as Medicare Part D for drug coverageD for drug coverage

Under Medicare Advantage, MediGap won’t Under Medicare Advantage, MediGap won’t work- doesn’t pay deductibles, work- doesn’t pay deductibles, copays/coinsurancecopays/coinsurance

Medication Therapy Management

MMA requires that Part D plans have an MTM MMA requires that Part D plans have an MTM programprogram Clinician (pharmacist) reviews patients’ Clinician (pharmacist) reviews patients’

medication therapymedication therapy Focus on patients with chronic diseases or on a Focus on patients with chronic diseases or on a

multitude of Part D medicationsmultitude of Part D medications CMS allows for MTM reimbursementCMS allows for MTM reimbursement Benefits include optimization of therapy, Benefits include optimization of therapy,

improved outcomes, and close monitoring of side improved outcomes, and close monitoring of side effectseffects

Conclusion

Enroll in Medicare Part D if:Enroll in Medicare Part D if: You have Medicare but do not have prescription You have Medicare but do not have prescription

drug benefitsdrug benefits You qualify for limited income assistanceYou qualify for limited income assistance You spend a lot on prescription drugsYou spend a lot on prescription drugs

Enroll by Dec 8Enroll by Dec 8thth for coverage beginning Jan 1 for coverage beginning Jan 1st;st; there there are late enrollment penaltiesare late enrollment penalties

Research the different options available to youResearch the different options available to you Part D as well as most drug benefits are subject to Part D as well as most drug benefits are subject to

change year to yearchange year to year

Additional Resources

www.medicare.govwww.medicare.gov www.healthdecisions.org/guide www.partdoptimizer.com www.medicare.gov/medicarereform/local-p

lans-2007.asp