Advanced Topics in Medicare
Part D: Assisting Patients Eligible for Low-Income Subsidies

Supported by an educational grant from UnitedHealthcare.

FACULTY:

John M. Coster, PhD, RPh*
Vice President, Federal Affairs and Public Policy
Rite Aid Corporation
Camp Hill, PA

*Former Vice President, Policy and Programs
National Association of Chain Drug Stores,
Alexandria, VA

FACULTY DISCLOSURE STATEMENTS:

John M. Coster reports no arrangements or affiliation with commercial corporations whose products may be mentioned in this program.

U.S. Pharmacist does not view the existence of relationships as an implication of bias or that the value of the material is decreased. The content of the activity was planned to be balanced, objective, and scientifically rigorous. Occasionally, authors may express opinions that represent their own viewpoint. Conclusions drawn by participants should be derived from objective analysis of scientific data.

ACCREDITATION STATEMENT:

Pharmacy
Postgraduate Healthcare Education, LLC is accredited by the Accreditation Council for Pharmacy Education as a provider of continuing pharmacy education
Program No.: 430-000-07-025-H04-P; 430-000-07-025-H04-T
Credits: 2.0 hours (0.20 ceu)

TARGET AUDIENCE:

This accredited program is targeted to pharmacists and pharmacy technicians. Estimated time to complete this monograph and posttest is 90 to 120 minutes.

METHOD OF PARTICIPATION:

  There are no fees for participating and receiving CE credit for this activity. During the period November 1, 2007 through November 30, 2009, participants must

1. Read the learning objectives and faculty disclosure;
2. Study the educational activity;
3. Complete the posttest by recording the best answer to each question in the answer key on the evaluation form;
4. Complete the evaluation form; and
5. Mail or fax the evaluation form with answer key to the address listed on the form. For faster service, enter your answers on the Internet at www.uspharmacist.com. A statement of credit will be issued upon receipt of a completed activity evaluation form and a completed posttest with a score of 70% or better.

DISCLAIMER:

Participants have an implied responsibility to use the newly acquired information to enhance patient outcomes and their own professional development. The information presented in this activity is not meant to serve as a guideline for patient management. Any procedures, medications, or other courses of diagnosis or treatment discussed or suggested in this activity should not be used by clinicians without evaluation of their patients’ conditions and possible contraindications or dangers in use, review of any applicable manufacturer’s product information, and comparison with recommendations of other authorities.

GOAL:

To update pharmacists on the changes within Medicare Part D, particularly those relevant to low-income subsidies (LIS), and provide strategies to enable pharmacists to educate their patients about Medicare Part D.

OBJECTIVES: 

After completing this program, participants will be able to:

1. Provide a basic overview of Medicare Part D.*
2. Analyze some of the current issues associated with Medicare Part D, especially LIS.*
3. Describe potential and implemented approaches in 2007 to rectify issues associated with LIS.*
4. List strategies to educate Medicare beneficiaries about changes to Medicare Part D for 2008, including those that affect LIS.*

*Also applies to pharmacy technicians.

Now ending its second year in operation, most seniors appear to be satisfied with the Medicare Part D outpatient prescription drug benefit program, and it has helped to significantly increase coverage among seniors. Before the new Part D program went into effect in 2006, 27% of seniors age 65 and older had no drug coverage and one third of near-poor seniors had no drug benefit.¹ Data now show that about 90% of all Medicare beneficiaries had drug coverage as of the beginning of 2007.¹

One of the hallmarks of the Medicare Part D program is the fact that most seniors have to make a choice every year of whether to keep the current Part D plan that they have for the next year, or switch to another plan. The Part D “annual enrollment period”—when beneficiaries can make this choice—is November 15th to December 31st. Pharmacists will likely get many questions from seniors during this period regarding what they should do for the following year. While plan selection for the majority of seniors occurs during the annual enrollment period, those who are dual eligible (those low-income beneficiaries who are eligible for both Medicare and Medicaid) for the low-income subsidy (LIS) may enroll or switch plans throughout the calendar year.

This article will focus primarily on how pharmacists can reach out and educate low-income seniors about the special LIS provided within the Medicare Part D program. Although this group of seniors has the most to benefit from the Medicare Part D program, they are among the most difficult to reach.

CURRENT MEDICARE PART D PROGRAM ENROLLMENT

There are about 44 million Medicare beneficiaries.² According to the Centers for Medicare and Medicaid Services (CMS), the agency within the federal Department of Health and Human Services (HHS) that is responsible for administering Medicare, about 24 million Medicare beneficiaries are enrolled in Medicare drug plans (Figure 1).^2,3 Of these individuals, 17.3 million are enrolled in Part D stand-alone prescription drug plans (PDPs) including 11 million non-low-income seniors and 6.3 million “dual-eligible” individuals.^2,3

The Medicare Advantage Drug Plan (MA-PD), which provides comprehensive health services through HMOs and regional PPOs, has 6.7 million patients.^2,3 Approximately 15 million Medicare beneficiaries have creditable prescription drug coverage through a private sector source (e.g., a union) or public sector source (e.g., the Federal Employees Health Benefits Program [FEHBP], the Department of Defense [DOD] TRICARE program, the Veterans Administration [VA] health care system, and certain state pharmacy assistance programs).^2,3

Medicaid was the primary source of prescription drug coverage for dual-eligible Medicare beneficiaries before the enactment of the Medicare Part D prescription benefit program. However, now that Medicaid can no longer pay for prescription drugs for low-income seniors who are also eligible for Medicare, these individuals need to be enrolled in a Part D plan in order to have access to a comprehensive Part D prescription benefit program.

Policymakers, however, are concerned about how to successfully reach out to 3.3 million low-income seniors (approximately 25% of all low-income seniors) who are eligible for LIS, but are not enrolled in the Medicare Part D program.^2,3

These individuals likely would significantly benefit from having drug coverage. That is because low-income seniors tend to be in poorer health and require more prescription drugs than others. Enrollment of these individuals in Medicare Part D programs would help them to obtain prescription drugs at community pharmacies.

THE ABCs AND Ds OF MEDICARE

To understand how pharmacists can best help seniors, especially low-income seniors, to navigate the Medicare Part D program, some basic facts about Medicare need to be understood.

The Medicare Part D program was developed as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (PL 108-173), also known as the Medicare Modernization Act (MMA). Although Medicare was originally enacted in 1965, its beneficiaries have never had access to a comprehensive Medicare-sponsored drug benefit program. Medicare traditionally had only covered prescription drugs used in hospitals, nursing homes, and physicians’ offices, as well as some outpatient drugs covered under Medicare Part B (i.e., certain immunosuppressive drugs and inhalation drugs used in conjunction with durable medical equipment such as a nebulizer).

Even before enactment of the Medicare outpatient prescription benefit program in 2003, the majority of beneficiaries already had some medication benefits. These sources of coverage included retiree health programs; state-based Medicaid prescription drug coverage (for those who were dually eligible for Medicare and Medicaid); privately administered Medigap and Medicare Select insurance policies; the health care programs of the DOD, VA, and FEHBP; and state pharmacy assistance programs. Retiree health care coverage was the primary source of prescription drug coverage for Medicare beneficiaries before this new drug program was added. Before this program began, many low-income individuals who were not eligible for Medicaid relied on manufacturer patient-assistance programs to help them to obtain some prescription medications.

Outpatient prescription drug coverage under MMA became available to Medicare beneficiaries under either Medicare Part C (also know as Medicare Advantage) or Medicare Part D (coverage is provided by stand-alone prescription drug plans, known as PDPs). For those beneficiaries in the traditional Medicare fee-for-service health care program, which accounts for the overwhelming majority of Medicare beneficiaries, a stand-alone Part D PDP is generally added to their existing Medicare Part A coverage (hospitalization) and Medicare Part B coverage (physicians, home health care, and durable medical equipment). Medicare beneficiaries already pay a monthly premium for Part B coverage (which will be $109.40 in 2008)⁴ and have to pay an additional monthly Part D premium for prescription drug coverage. This Part D premium is dependent on the plan, with an expected average monthly premium of about $25 in 2008.⁵ The premium is waived or sharply reduced for Medicare beneficiaries with limited incomes.

The Medicare Part B premium for low-income individuals is generally paid for (in whole or part) by the state Medicaid program. The Medicare program covers the Part D premium for these same individuals. Medicare beneficiaries who are not in the low-income group can expect to pay a total average of about $134 in monthly premiums for both Part B coverage and Part D coverage in 2008 (an average $109.40 monthly premium for Part B coverage and an average $25 for Part D coverage).^4,5 There is no premium for Medicare Part A for most beneficiaries, since this is paid through payroll taxes on both the employee and employer. Coverage under Medicare Parts A, B, and D generally provides a beneficiary access to a comprehensive range of health care services.

In lieu of obtaining comprehensive health services through Parts A, B, and D, beneficiaries can also opt to join a single, integrated Medicare Part C Medicare Advantage Prescription Drug (MA-PD) plan to obtain their hospital, physician, and outpatient drug coverage. These options include health maintenance organizations (HMOs) and new regional preferred provider organizations (PPOs). The single premium paid by beneficiaries to the Medicare Part C MAPD plans includes prescription drug coverage, although many MA-PD plans charge no additional premium for their Part D component. Beneficiaries must have Part A and Part B in order to be able to participate in the Medicare Advantage plans.

MEDICARE PART D BENEFICIARY ENROLLMENT ISSUES FOR 2008

Individuals are becoming eligible for Medicare all the time. When should these individuals join a Part D plan? Those who become eligible for Medicare have a seven-month period of time to join a Part D plan: the three months before their calendar month of eligibility, the month of their eligibility, and three months after the month of their eligibility.⁶ Coverage begins the month beneficiaries turn 65 years old if they enroll early and begins the first day of the following month for those who enroll after they become eligible.

The Medicare Part D program is voluntary; thus, Medicare beneficiaries are not required to enroll. However, Medicare-eligible individuals who do not join a Part D plan when they are first eligible, and do not have “creditable coverage” for prescription drugs, risk having to pay a higher premium (late enrollment penalty) if they join a Part D plan later on. However, those who qualify for LIS are exempt from the late enrollment penalty through 2008.

Creditable coverage is defined as prescription drug coverage offered by an entity other than Medicare having a value that is equal to or greater than the drug benefit being offered by the Medicare Part D program for the year. The sponsors of these prescription drug plans are receiving special subsidies and tax breaks from the federal government to encourage them to continue to offer this coverage to Medicare-eligible seniors. However, the percentage of employers who offer creditable prescription drug coverage to seniors is expected to decrease over the next few years. Many of these seniors will have to select a PDP or an MA-PD plan if they are desirous of the prescription benefit.

The penalty that a Medicare beneficiary has to pay for not having creditable coverage is 1% of a nationally determined base beneficiary premium amount that is charged for each month that the beneficiary does not have creditable coverage starting after a 63-day grace period.⁷ For example, if a Medicare beneficiary waits for two years to join a Part D plan and does not have creditable prescription drug coverage during that time, he or she would pay a 24% penalty, based on the yearly base premium, in perpetuity when he or she finally joins a Part D plan.

Beneficiaries who do not know if they have current creditable prescription drug coverage through a former employer, their state pharmacy assistance program, or another government program should contact the program’s administrator or their former employer. Entities are required to provide proof of creditable coverage to Medicare beneficiaries, and all beneficiaries should keep these documents in case there are questions in the future regarding their prior drug benefit.

Individuals who joined or switched their Part D plan during a past annual enrollment period can once again switch their Part D plan during an annual enrollment period if they so choose. CMS reported that in 2007, 2.4 million Medicare beneficiaries changed plans.³ Medicare does allow for special enrollment periods for individuals who, for example, move from the outpatient environment into a nursing home or back to the community, whose Part D plan suddenly leaves the market, or those who are dually eligible. Dual-eligible individuals may switch plans every month if they so choose. For beneficiaries who want to change their Part D plan, all they need to do is enroll in a new Part D plan. Medicare will notify their former plan administrator.

How will Medicare beneficiaries determine if they want to stay with their current Part D plan or switch to another plan during the upcoming enrollment period? Part D plans are required to send beneficiaries an “Annual Notice of Change” (ANOC) before the last day of October. This will describe any changes to the Part D plan (e.g., premiums, copayments, and drug formularies). This notification should aid patients in making a decision as to whether they want to remain in their current plan or choose another.

Beneficiaries may take these ANOC documents into pharmacies and ask pharmacists for help in understanding what the notices mean and how they may affect their decision for the following year. Pharmacists can assist beneficiaries in determining how the plan’s drug formulary coverage might change for the following year, whether their pharmacy will remain in the plan’s network or is an out-of-network provider, and whether cost sharing will change. Plans that are leaving the market as of the first of the new year, and thus terminating coverage, must notify beneficiaries by early October.

Pharmacists should encourage beneficiaries, especially those who want to switch plans, to enroll as early as possible during the open-enrollment period, specifically no later than December 7th, rather than the last day of December. This earlier date should allow the plan sponsor and Medicare officials to process all of the enrollment and eligibility information from the beneficiaries, and to mail their new identification cards. Sufficient time is needed for the proper eligibility and billing information to be available to the pharmacist in the prescription billing system. Beneficiaries without the proper cards will create problems when they need new or renewed prescriptions.

LOW-INCOME “EXTRA HELP”
ENROLLMENT ISSUES AND PROCEDURES

Of the 44 million Medicare beneficiaries, 13.2 million low-income Medicare individuals (approximately 30%) are eligible for special Medicare Part D program premium and cost-sharing subsidies.^2,3 These programs are often referred to as “extra help” (see The “Extra Help” Program). At this point in time, about 3.3 million low-income people who are eligible for LIS are not receiving them.^2,3 This is where pharmacists can be a major factor.

Individuals with incomes up to 150% of the federal poverty level (FPL) in 2007 ($15,315 for an individual and $20,535 for a couple) are eligible for LIS on a sliding scale basis, with those under 100% of the FPL ($10,210 for an individual and $13,690 for a couple) entitled to the most subsidies.⁸ These amounts are revised every year, before the end of March, based on changes in the FPL. Asset tests may also apply. Therefore, each year the Federal Poverty Guidelines will be used to determine individuals eligible for Part D low-income subsidies for the rest of the calendar year and the first few months of the following year until new guidelines are published.

Dual-Eligible Categories

There are two categories of dual-eligible beneficiaries (those with incomes below 100% of FPL and some of those with incomes above 100% of FPL that meet certain asset tests) who are eligible for LIS. Medicare pays the full Part D premium for each of these groups. The lowest income cohort has the least prescription cost.

Non-Dual-Eligible Categories

There are three non-dual-eligible categories for people who are eligible for LIS, based on income and assets. There are two groups with incomes up to 135% of FPL, but neither group pays any premiums. There are different deductibles and cost sharing depending on asset levels. The last classification comprises those low-income individuals with incomes between 135% and 150% of FPL. This group pays a sliding-scale premium based on income and has higher premiums, deductibles, and cost sharing than most other low-income groups.

Enrolling these individuals in a Part D plan is a two-step process. First, they must meet the requirements for the LIS. Those individuals who are dually eligible and whose income is below 100% of FPL, who are enrolled in the Medicare Savings Program (MSP), or are eligible for the Supplemental Security Income (SSI) program are deemed automatically eligible for the LIS. Under the MSP, state Medicaid programs pay for all or part of the Medicare Part B premiums, deductibles, and cost sharing of individuals who are not poor enough to qualify as a dual-eligible individual, but have limited resources. These individuals do not have to apply to the Social Security Administration (SSA) to be eligible for the LIS. They will automatically receive a letter informing them that they qualify. These purple-colored letters are sent on a monthly basis by CMS to those individuals who automatically qualify.

Those individuals with incomes below 150% of FPL, who do not fall into these automatic eligibility categories, must apply to the SSA or their state Medicaid program to determine their eligibility. Information about how to apply can be found at the SSA Web site (www.ssa.gov).

Pharmacists should be alert for individuals of limited income who may be eligible for the LIS but have not yet applied. Pharmacists should help to direct these individuals to the SSA Web site. The procedure to apply for these subsidies may appear daunting to a low-income senior because the application requires the disclosure of personal financial information. However, the value of the premium payment saved and copay subsidies could mean the difference between whether or not individuals are able to obtain prescription drugs and enjoy an enhanced quality of life. If a patient appears to qualify for extra help, pharmacists should encourage him or her to complete the “Application for Help with Medicare Prescription Drug Plan Costs” (SSA Pub. No. 1020).

Although they do not have to apply each year to be automatically eligible for these premium and cost-sharing subsidies, individuals must be deemed eligible for LIS each year. Beneficiaries who were deemed automatically eligible for LIS the previous year will be notified in late September by the SSA if they are no longer automatically eligible for LIS the following year.⁹ The notice that they will receive will be on gray paper. If they are not deemed to be automatically eligible, they should still be encouraged to apply for LIS. That is because their income level likely remains low enough such that they are eligible for significant or partial LIS for their Part D coverage. Once an individual is determined to be eligible for LIS, either automatically eligible or through the SSA application process, they must be enrolled in a Part D plan. It is imperative to remember that this is a two-step process.

There are basically two situations regarding how Part D is provided to Medicare beneficiaries who are also entitled to Medicaid. In one scenario, Medicare beneficiaries who are already enrolled in a Medicare Part D plan become qualified for Medicaid at a later time. This may happen because seniors may spend down their incomes or have another event occur that depletes their income. Once eligible for Medicaid, they may qualify for certain LIS, so the pharmacist should be aware of patients who fall into this category.

In the other scenario, beneficiaries who have been eligible for Medicaid benefits for some time and now meet the requirements for Medicare essentially “age into” this entitlement. Once they become eligible for Medicare, Medicaid no longer pays for all prescription drug coverage, and they must be enrolled in a Part D plan. Medical care is still provided through their prior program.

The MMA required that the CMS automatically enroll dual-eligible beneficiaries into Part D plans to minimize the extent to which these individuals might “fall through the cracks” in their transition from the Medicaid drug benefit to Medicare Part D coverage. For those Medicaid individuals who “age into” Medicare, CMS automatically enrolls these individuals in a Part D plan several months before qualifying for Medicare. This allows for a relatively seamless transition between Medicaid drug coverage and Medicare Part D coverage. On a monthly basis, CMS mails a yellow letter to those individuals who will be automatically enrolled (dual eligibles), telling them that CMS will automatically enroll them in a plan if they do not. If beneficiaries want to change plans they can do so, but this proactive automatic enrollment at least helps to minimize the extent to which beneficiaries may not have coverage for their drug benefit. Those non-dual eligibles who are automatically eligible for the LIS, but are not automatically enrolled in a Part D plan, have a “facilitated enrollment” process. This green-colored letter will identify for these individuals (MSP enrollees, SSI beneficiaries, and those who are LIS qualified but not yet enrolled) the Part D plans in their regions with premiums at or below the low-income premium benchmark. CMS will enroll them in a plan if they do not enroll in a plan or decline coverage.

Even though there have been significant attempts by CMS to assure a seamless transition, there are still cases in which a beneficiary comes to the pharmacy and the pharmacist cannot find any billing information in the computer processing system. In these cases, CMS has contracted with WellPoint, a health benefits company, to establish a “point of sale” system to enroll low-income seniors in a plan that enables them to receive their medications.¹⁰ This program was designed to make sure that individuals who are eligible for Part D LIS, but are not yet enrolled in a prescription drug plan, are still able to obtain prescription drugs at the pharmacy when the pharmacist believes that they have legitimate evidence of both Medicare and Medicaid eligibility.¹⁰

The following is a discussion of the key dates that pharmacists should provide to potential or previously eligible low-income beneficiaries as they attempt to enroll in or navigate through the Medicare Part D program.

Late September

CMS mails letters to Medicare beneficiaries who no longer automatically qualify for extra help for the following year. This letter on gray paper will tell them that although they are not automatically eligible for LIS for the following year, they should apply for it because they still may qualify. These individuals may have experienced some change in their financial situation during the current year, which means that they no longer automatically qualify. Low-income seniors may become concerned about this because they may think that they are no longer eligible for LIS at all. In 2007, almost 50% of beneficiaries who lost their automatic eligibility from 2006 applied for the assistance again and were subsequently approved.¹¹

October 1st

Part D plans begin to market their plan offerings for the following year by October 1st. That means that sponsors will run ads in newspapers and journals, and use other venues to try and attract Medicare beneficiaries to enroll in their programs. In addition, by October 2nd, plans that are leaving the market entirely, or are not going to offer any approved arrangements, must send a notice to enrolled beneficiaries indicating that they will have to choose a new Part D plan. For low-income beneficiaries who were automatically enrolled in a Part D plan, they will be automatically assigned by CMS to another sponsor’s plan.

It should be noted that low-income seniors may only be automatically enrolled in plans with a premium at or below the “low-income premium benchmark.” Low-income premium benchmarks depend on which of the 34 PDP regions a beneficiary lives in.² If a beneficiary’s current Part D plan has a monthly payment for the following year that is at or below the new low-income premium benchmark in that region, the beneficiary can remain in that plan. If the plan is to be terminated, or if it has a premium that is higher than the low-income benchmark for that region, CMS will assign the beneficiary to another Part D plan in the region that has a premium at or below the benchmark. Traditionally, the federal agency has tried to reassign a beneficiary to a plan of the same PDP sponsor. If that is not possible, then the agency randomly assigns the person to another program in the region.

CMS estimated that for 2007, 250,000 individuals needed to be reassigned to a different Part D plan.¹¹ CMS expects a much larger number of low-income seniors to switch into different plans in 2008, possibly up to one in six (or 1.5 million low-income seniors), because many Part D plan premiums are expected to be higher than the low-income premium benchmarks.^5,12 Pharmacists should recognize that reassignment of a significant number of low-income individuals could be particularly disruptive. That is because these reassigned low-income beneficiaries will be enrolled in a completely new Part D plan and will likely have to obtain new prescription drug cards, will have to determine whether the drugs they are taking are on the new plan’s formulary, may have to change pharmacies if their current retail pharmacy is not in the new plan’s network, and may find that some of the new plan’s formulary drugs are subject to prior authorization or other utilization management procedures. If that is true, then pharmacists may become a key contact point for low-income seniors in helping them understand why their plan has changed, and assisting them in assuring that they continue to obtain medications under their new Part D plan.

Early October

CMS mails, in early October, another letter on orange paper to select low-income seniors who remain automatically eligible for LIS. However, these recipients may qualify for different benefits because their income or assets have changed. For example, some low-income seniors may be eligible for even lower prescription cost sharing for both generic and sole source drugs than they did in the current year. Alternatively, some seniors may have to pay higher cost sharing then they did in the current year. This letter will explain the subsidy level for which these low-income Medicare beneficiaries will be eligible.

By October 31st

Each Medicare beneficiary receives the ANOC describing how the particular plan’s Part D benefit design, formulary, and/or premium will be modified in the following year. This message is designed to help any senior already enrolled to determine whether the plan will continue to meet prescription needs in the following year. Beneficiaries may take these ANOC notifications to the local pharmacist for assistance in making their decision.

On October 31st

CMS sends notices on blue paper to low-income Medicare beneficiaries who are being reassigned to a different Part D plan for the following year. As previously noted, these reassignments occur because certain Part D plans are no longer eligible for the enrollment of low-income seniors. CMS will indicate the new Part D plan that has been assigned. This document will be informative for many beneficiaries, but may also raise concerns. That is because the new plan may not cover all of the drugs currently being utilized or may be subject to utilization management restrictions, such as prior authorization. Pharmacists should reassure patients that they still have prescription drug coverage, and work with them and their prescribers to identify drugs on the new plan’s formulary that meet their needs. Pharmacists can also help patients navigate the exceptions and appeals process. Low-income beneficiaries do not have to remain in these plans during the year. They can switch into different plans as long as they have premiums that are at, below, or no more than a dollar above the low-income premium benchmark.

November 15th

The Part D annual enrollment period begins on November 15th and extends through December 31st. However, beneficiaries who want to change plans are encouraged to enroll in the new plan by December 7th. This should provide sufficient time for the new Part D plan to process all of the necessary beneficiary enrollment information and mail the new plan cards to beneficiaries during the busiest mailing time of the year—the holiday season.

January 1st

The new Part D plan year begins for all of those Medicare beneficiaries who voluntarily changed plans as well as those who were automatically assigned to a different plan.

What happens when a beneficiary’s drug is not on the formulary? All plans are required by CMS to have a process in place to allow beneficiaries to request an “exception” if a specific drug, strength, and dosage form is not on the plan’s formulary, or is on the formulary but not at a preferred cost sharing tier. To help beneficiaries and prescribers to request an exception to the restrictive formulary, CMS has on its Web site a model form for patients to use in requesting coverage determination. The document was developed with input from prescribers, pharmacists, and the health plan community. It can be accessed at: www.cms.hhs.gov/PrescriptionDrugCovGenIn/Downloads/ModelCoverage DeterminationRequestForm.pdf.

Plan sponsors are also required to have “transition” policies in place to maintain beneficiaries on medications on which they have been stabilized. For noninstitutionalized people, these transition policies require plans to authorize a one-time 30-day supply of medication that may not be a formulary medication (including drugs on the formulary requiring prior authorization or step therapy under utilizations management rules) during the first 90 days in which they are enrolled in the various plans. Sponsors are required to send beneficiaries a notice stating that the transition supply is temporary and that they should work with the plans and prescribers to identify potential substitutes on the formularies to replace the transition supply drug. Patients have the right to solicit a formulary exception. The letter should describe the procedures for requesting an exclusion to allow beneficiaries to continue utilizing the nonformulary products.

MEDICARE PART D DESIGN ISSUES FOR LOW-INCOME INDIVIDUALS

Each year, the MMA requires changes in the “standard” Medicare Part D prescription drug benefit design. For example, in 2007, the standard benefit design included a $265 deductible, beneficiary payment of 25% of formulary drug costs between $266 and $2400, and no coverage after incurring between $2400 and $5451 in formulary drug costs, after which “catastrophic” drug coverage became effective.^2,13 The standard benefit design for 2008 includes a deductible of $275, beneficiary payment of 25% of formulary drug costs between $276 and $2510, and no coverage between $2510 and $5,726.25 in formulary drug costs, after which catastrophic coverage becomes effective (Figure 2).¹⁴

Plan sponsors may develop their own benefit designs as approved by CMS, as long as the coverage offered by each basic prescription drug coverage plan is equal to or better than the value of the standard benefit design. Most plans that are offered and selected by beneficiaries are in fact different than the standard plan design, although they have to have an equivalent insurance dollar value. In fact, about 88.5% of enrollees joined a plan with features different from the standard plan.³

The Part D prescription drug benefit has often been criticized because of these annual changes in the benefit design— which can be confusing to the beneficiaries—as well as the so-called “donut hole,” or coverage gap, in the benefit design. When Medicare beneficiaries “fall into” this coverage gap, they continue to pay premiums to their plan, but they do not have any prescription drug coverage until they reach the catastrophic threshold. Pharmacists have undoubtedly experienced seniors’ frustrations with the “donut hole.” Seniors may not understand why their coverage for most prescription drugs ends abruptly during the year, even though they continue to pay Part D premiums. In this gap, beneficiaries may not have actual coverage; however, they do have access to the lower prices negotiated between the plan and the pharmacy for the total prescription charge. In this situation the copayment is 100% of the medication and negotiated dispensing rate.

These standard benefit design “donut hole” issues do not apply to low-income individuals. Low-income dual eligibles pay no or lower premiums and deductibles and have low copays throughout the benefit period. Deductibles and copays for non-dual eligibles are based on income and assets.

However, even the copays paid by low-income individuals change from year to year. For example, the cost sharing for dual-eligible individuals in 2007 was $1.00 for a generic or preferred multiple-source drug and $3.10 for a brand-name drug.¹⁴ In 2008, the copayment for a generic drug is $1.05; the copayment for a brand-name drug remains at $3.10.¹⁴

Other individuals eligible for LIS who paid $2.15 for a generic drug and $5.35 for a brand-name drug in 2007 pay $2.25 for a generic drug and $5.60 for a brand-name drug in 2008 (Table 1).¹⁴

Dual-eligible individuals in nursing homes do not pay any prescription drug cost sharing. Legislation has been introduced that would also waive Part D copays for individuals who are in other long-term care settings, such as assisted-living facilities. Unlike with Medicaid, these cost-sharing amounts have to be paid by the beneficiary before the pharmacist dispenses the prescription. A pharmacist can waive or reduce the cost-sharing amount for a low-income individual provided the pharmacy has not advertised these price reductions. The pharmacy ownership would absorb any price forgiveness.

THE PHARMACIST’S ROLE

Clearly, there is still much work to do to reach low-income seniors who are eligible for “extra help” but are not signed up. A recent study found that only one half of those eligible with incomes of 150% of FPL, who were not receiving LIS, were aware of the program.¹⁵ Much lower awareness rates for LIS were reported for African-American seniors and Hispanics than for Caucasians. Among those low-income seniors who were aware of LIS but did not apply, 46% said they did not think they would qualify, 35% said they did not need help with drug costs, and 7% said they did not know how to apply or thought it was too much trouble.¹⁵

Pharmacists have several important resources at their fingertips to help educate seniors, especially low-income seniors, about drug benefit options. First, all new 2008 Part D plan information will be available by calling 1-800-MEDICARE or by going online at www.medicare.gov. New drug pricing and pharmacy network data are available through the CMS Plan Finder. In addition, all beneficiaries receive the new Medicare and You handbook in early November. This document will include all the PDP and MA-PD plan options in areas in which beneficiaries live.

Outreach to Low-Income Seniors

The following are specific tasks that pharmacists may consider in terms of outreach to low-income seniors.

Keep Eyes and Ears Open for Low-Income Seniors: Pharmacists are in the best position to identify seniors who may have trouble paying for their medications. If pharmacists encounter individuals who cannot afford their drugs, and if they believe the seniors may be of limited income, then they should consider talking to the them or their caregivers about the prescription program.

Work with Local SHIPs: Each state has one or more State Health Insurance Programs, known as SHIPs, that provide counseling and assistance to seniors in helping them understand all Medicare issues, including how to choose among various Part D plans. Pharmacists may want to contact their local SHIP program and see if it can provide assistance to help seniors choose among various Part D drug benefit plans. Pharmacists can also refer seniors to the local SHIP for counseling (www.shiptalk.org).

Work with Local Senior Citizen Centers: Local senior citizens centers are great places to educate seniors about the Medicare Part D prescription benefit and the “extra help” LIS programs. These centers often welcome presentations by pharmacists about Medicare Part D. Pharmacists can also set up a table in these centers that would allow seniors to ask questions about the Medicare Part D program or about their medications.

Become Involved with State Pharmacy Associations: State pharmacy associations may have speakers’ bureaus regarding the Medicare Part D program, or may sponsor their own “train the trainer” programs. These programs allow pharmacists to become more familiar with some of the Medicare Part D program processes and procedures before they go out into the community to educate seniors about the LIS and the Medicare Part D program.

Refer Low-Income Beneficiaries to State Pharmacy Assistance Programs: Many states have their own pharmacy assistance programs that “wrap around” the Medicare Part D program for low-income eligible individuals. The state program fills in the gaps in the premiums, cost sharing, or deductibles of a Part D plan if the individual does not qualify for the maximum LIS allowed under the Medicare Part D program. Some of these assistance programs provide comprehensive reimbursement for drugs that are not covered under the various formularies.

Provide Assistance with Applications: Pharmacists may be able to alleviate some of their patients’ concerns about the complexity of the SSA Part D subsidy application by providing instructions on how to complete the “Application for Help with Medicare Prescription Drug Plan Costs” (SSA Pub. No. 1020). Beneficiaries can apply online at www.ssa.gov/ prescriptionhelp.

Have the Current Medicare and You Handbook in the Pharmacy: Pharmacists may want to have on hand the latest Medicare and You handbook in the pharmacy. This handbook is written in a patient-friendly format and can assist pharmacists in providing insight and guidance to Medicare beneficiaries about the Medicare Part D program.

Establish a Medicare Part D Resources Center in the Pharmacy: Many pharmacies already have brochures and pamphlets from various sources that provide health-related information. Pharmacists can establish an area displaying Medicare Part D-related information for patients to peruse while they wait for a prescription. There is a wealth of information about the Medicare Part D program available from pharmaceutical manufacturers, Part D plans, advocacy groups for older Americans (such as AARP), and government agencies.

Incorporate Cultural Sensitivities into Communications: Many low-income seniors speak English as a second language. They can be reticent about completing the paperwork necessary to qualify for some of the LIS. Pharmacists need to develop materials in languages that meet the needs of their constituents.

Pharmacists should not underestimate the impact they can have in reaching out, one by one, to seniors who need help with the Medicare Part D program.

PRESCRIPTION TRENDS IN THE MEDICARE PART D PROGRAM

Although the Medicare Part D program is important to the life and health of seniors, it has also become an important source of revenue for community pharmacies. Part D beneficiaries had filled approximately 486 million prescriptions in 2006, which was 15% of all retail prescriptions.¹⁶ As of June 2007, the Medicare Part D program accounted for approximately 18% of all prescriptions dispensed by retail pharmacies.¹⁷ Combined with the approximately 8% of Medicaid prescriptions dispensed by retail pharmacies, the Federal government now pays for more than one quarter of all prescriptions dispensed in the retail sector.¹⁷

Even more daunting is the demographics of the elderly, as their numbers are expected to continue to increase as the “baby boom” generation becomes eligible for Medicare. The elderly tend to use more prescriptions than other cohorts. This current utilization percentage does not include millions of prescriptions paid by the DOD TRI-CARE program, the FEHBP, federally-funded health clinics, and other state government programs. The bottom line is that government-funded prescription drug programs have become the most important source of prescriptions for community pharmacies.

How has the Medicare Part D program affected the use of generic medications? The rate of generic drug use in the Medicare Part D program is higher than that in commercial insurance prescription drug plans. For instance, in 2006 traditional generic drugs represented 58% of all Part D prescriptions, whereas in other commercial plans they represented 56%.¹⁶ This higher rate of generic drug utilization in the Medicare Part D program was likely attributable to the tiered cost-sharing approach used by many Part D plans, in which the lowest cost sharing is for generic drugs, and the fact that many Part D plans offer generic drugs in the coverage gap or “donut hole.”¹⁸ By offering generic drugs in the “donut hole,” it is more likely that seniors will begin therapy on a generic drug rather than on a brand-name drug. Medicare Advantage plans are reported to have higher rates of generic drug dispensing (approximately 65%) compared with PDP plans, which dispense between 55% and 60%. Among the therapeutic classes of prescriptions dispensed, drugs used to treat hypertension account for 25% of all Part D prescriptions, followed by lipid regulators at 7.4% and antidepressants at 5.1%.¹⁶

UPDATE ON MEDICARE PART D
QUALITY OF CARE PROGRAMS

Medicare Part D plans are required to offer medication therapy management (MTM) services to beneficiaries who take numerous drugs, have multiple chronic diseases, and are likely to incur drug expenses in excess of $4,000.¹⁹ These services may include elements to encourage beneficiaries’ understanding of their chronic diseases, promote the appropriate use of medications, and reduce the risk of potential adverse reactions associated with medications through education, counseling, and other appropriate means. Low-income seniors may be more likely to utilize these services because they generally take substantially more medications compared with other Medicare beneficiaries.

According to the CMS, in 2006 about 12% of all Medicare beneficiaries who enrolled in PDPs met the MTM eligibility criteria, and 7.7% participated in MTM service programs.¹⁹ Most of the beneficiaries who participated had two or more chronic conditions and about one half were taking five to seven medications.¹⁹ In addition, the plan sponsors’ in-house staff provided almost 46% of these Medicare Part D MTM services, 37% were provided by outside personnel, and 17% used a combination of these delivery methods.¹⁹

The MMA has enabled changes in the way that Medicare pays for vaccinations for Medicare beneficiaries. Medicare Part B pays for vaccinations against influenza and pneumococcal infections, as well as medically necessary vaccines to treat illness or injury, such as tetanus vaccines. The Medicare Part D program is supposed to include coverage for vaccines that are not covered by Part B, such as herpes zoster, or vaccines that may only be paid for in limited cases under Part B. However, Part D plans were unable to pay for the administration fees for the vaccines, reducing the accessibility of these vaccines to beneficiaries.²⁰ In the Tax Relief and Health Care Act of 2006, Congress allowed the Medicare Part B portion of the legislation to pay the vaccine administration costs for Part D covered-vaccines for 2007. However, in 2008, payment for both the vaccine and its administration costs will be covered solely by the Part D plan.²¹ This change in the law extends the opportunity to enable pharmacists to become active in the immunization process. Thus, pharmacists may see an increase in the number of Part D vaccinations administered in pharmacies as a result of these changes.

CONCLUSION

Pharmacists will continue to be an important part of the success of the Medicare Part D program, especially as it relates to encouraging LIS-eligible individuals to apply for the extra help that is available and to enroll in the program. It is imperative for pharmacists to encourage LIS individuals to remain in the program by helping them to navigate through reassignments of Part D drug plans and potential changes in their status.

All beneficiaries will continue to rely on pharmacists for important information about the operation of their Medicare Part D program as well as their plans’ benefit design. Pharmacists should become more familiar with the various information needs of beneficiaries with respect to Medicare Part D and to strive to fill those needs.

The facts and opinions expressed within are solely those of the author and are not of the company or organization to which he is affiliated.

REFERENCES

1. Kaiser Family Foundation. Prescription Drug Trends Fact Sheet. May 2007. Available at: http://www.kff.org/rxdrugs/upload/3057_06.pdf. Accessed September 20, 2007.
2. Kaiser Family Foundation. The Medicare Prescription Drug Benefit Fact Sheet. June 2007. Available at: http://www.kff.org/medicare/upload/7044-06.pdf. Accessed September 20, 2007.
3. Centers for Medicare & Medicaid Services. Medicare drug plans strong and growing: beneficiaries compared plans and continued to sign up for prescription drug coverage. January 30, 2007. Available at: http://www.aoa.gov/ medicare/news/media/ Final_Enrollment_Numbers.pdf. Accessed September 24, 2007.
4. The Senior Citizens League. Largest increase ever forecast for Medicare Part B premiums in 2008. February 17, 2007. Available at: http://www.seniors league.org/index.php?option=co_content&task=view&id=45&Itemid=49. Accessed September 24, 2007.
5. Centers for Medicare & Medicaid Services. Medicare Part D Plan premiums for 2008 show continued impact of strong competition. August 13, 2007. Available at: http://www.cms.hhs.gov/apps/media/press/release.asp?Counter=2401. Accessed September 20, 2007.
6. Centers for Medicare & Medicaid Services. Qualifying for Extra Help and Joining a Medicare Drug Plan. February 2007. CMS Pub. No. 11236-P. Available at: http://www.cms.hhs.gov/partnerships/downloads/11236P.pdf. Accessed September 24, 2007.
7. Centers for Medicare & Medicaid Services. Quick Facts about Medicare Coverage for Prescription Drugs for People Who Have Prescription Drug Coverage from an Employer or Union. August 2007. CMS Pub. No. 11107. Available at: http://www.medicare.gov/ Publications/Pubs/pdf/11107.pdf. Accessed September 24, 2007.
8. Center for Medicare Advocacy, Inc. 2007 poverty levels will affect eligibility for many federal health care programs. Available at: http://www.medicareadvocacy. org/MedSavProgs_07_ 01.25.2007FPLs.htm. Accessed September 24, 2007.
9. CMS Low Income Subsidy Toolkit: Medicare Outreach Strategy to Target Low Income Individuals. July 2007. Available at: http://www.cms.hhs.gov/partnerships/ downloads/LISOutreachOverview.pdf. Accessed September 20, 2007.
10. WellPoint Letter to Pharmacy Providers from J. David Goodson, Regional Vice President, Facilitated Enrollment and Low Income Dual Eligible Business. August 15, 2007.
11. Statement of Leslie V. Norwalk, Acting Administrator, Centers for Medicare and Medicaid Services. Testimony Before the Subcommittee on Health of the House Committee on Ways and Means. June 21, 2007. Available at: http://waysandmeans. house.gov/hearings.asp?formmode=view&id=6162. Accessed September 24, 2007.
12. CMS predicts $25 standard Part D benefit, more reassignments in ’08. August 23, 2007. Available at: http://healthpolicynewsstand.com/hns_newsletters.asp? NLN=CMS&start=41545. Accessed September 20, 2007.
13. Centers for Medicare & Medicaid Services. Medicare Part D benefit parameters for standard benefit: annual adjustments for 2007. April 5, 2006. Available at: http://www.ascp.com/medicarerx/upload/ParameterUpdate07.pdf. Accessed September 24, 2007.
14. Centers for Medicare & Medicaid Services. Notification of changes in Medicare Part D payment for calendar year 2008 (Part D payment notification). April 2, 2007. Available at: http://www.medicarerxguide.com/MDRG/2007/Payment_Memo.pdf. Accessed September 24, 2007.
15. Neuman P, Kitchman Strollo M, Guterman S, et al. Medicare prescription drug benefit progress report: findings from a 2006 national survey of seniors. Health Affairs [serial online]. August 21, 2007. Available at: http://content.healthaffairs. org/cgi/reprint/hlthaff.26.5.w630v1?ijkey=wpOorB7zwSX6c&keytype=ref&siteid=h ealthaff. Accessed September 20, 2007.
16. IMS Special Report. Medicare Part D: The First Year. Plymouth Meeting, PA: IMS Health; 2007. Available at: http://imshealth.com/vgn/images/portal/CIT_ 40000873/25/19/81829004MedicarePartD-TheFirstYear.pdf. Accessed September 20, 2007.
17. Long D. Pharmaceutical trends, issues and forecasts. Presented at: NACDS Pharmacy and Technology Conference; August 14, 2007; Boston, MA.
18. Medicare Prospective Payment Commission (MEDPAC). A Data Book: Healthcare Spending and the Medicare Program. Section 11: Drugs. June 2007. Available at: http://www.medpac.gov/chapters/Jun07DataBookSec11.pdf. Accessed September 24, 2007.
19. Oates V. Status of MTM programs in Medicare Part D plans. Presented at: NACDS Pharmacy and Technology Conference; August 14, 2007; Boston, MA.
20. Centers for Medicare & Medicaid Services. Increasing Part D vaccine access. May 8, 2006. Available at: http://www.cms.hhs.gov/PrescriptionDrugCovContra/ downloads/MemoVaccineAccess_05.08.06.pdf. Accessed September 24, 2007.
21. Centers for Medicare & Medicaid Services. Payment by DME MACs and DMERCs for the administration of Part D vaccines. Effective January 1, 2007. Available at: http://www.ascp.com/medicarerx/upload/VaccinesCRPartB.pdf. Accessed September 24, 2007.
    
    

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