Prescription Drug Improvement and Modernization Act

Dorothy Della Sherwood, M.D.

Presbyterian Hospital of Dallas

2/22/2006

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• 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

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• 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

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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

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• 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

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• When choosing a PDP, one should compare– Deductible – Monthly Premium– Co-pay for Rx – Formulary – Gap Coverage – Mail-in or local pharmacy

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• 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%

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• Competition has resulted in better coverage than those that have been mandated.

• WWW.CMS.GOV

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• 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)

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• 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

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• 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

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• 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

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• Specific Drug Coverage mandated by MMA– Cancer medications– HIV/AIDS treatments– Antidepresssants– Antipsychotics– Anticonvulsants– Immunosuppressants

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• Excluded Drugs– Weight Loss Drugs– Fertility Drugs– Cosmetic hair growth products– Cough suppressants– Benzodiazepines– Barbituates– Vitamins– Non-prescription drugs

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• 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

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PDP Formulary Available at

www.epocrates.com

http://formularyfinder.medicare.gov/formularyfinder/selectstate.asp

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• 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

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• 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

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• 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

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• 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

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• 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.

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• 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

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• 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