Urology Practice Management - July 2012 Vol 1, No 1
Kip Piper, MA, FACHE
President, Health Results Group, LLC, Washington, DC

The Medicare Part D drug benefit has important implications for urology practices. As Part D continues to evolve, so do its challenges and opportunities. This article outlines some of the basic details of Medicare Part D, some of the challenges it poses, and some of the trends associated with it.

Today, the Medicare program provides $591 billion in healthcare services to 48 million beneficiaries. In 2012, Medicare benefits include $130.7 billion worth of physician services and $69.4 billion in prescription drugs.

To understand Medicare Part D—the Medicare prescription drug benefit—it is important to understand all 4 parts of Medicare, and how care is delivered through either fee-for-service (FFS) or plans. Medicare Part A provides inpatient hospital and postacute services. Medicare Part B covers physician services, other outpatient services, and physician-administered drugs and biologics. Part B is optional, but approximately 95% of beneficiaries elect to participate. Medicare beneficiaries have the choice of receiving their Part A and Part B services through a FFS basis or through Part C. Part C is more  frequently known as Medicare Advantage. Medicare Advantage plans are like HMOs and PPOs that cover all Part A and Part B services. In 2012, approximately 27% of Medicare beneficiaries receive Part A and Part B benefits through Medicare Advantage plans.

The Medicare prescription drug benefit (ie, Medicare Part D) was established in 2006 to provide access to outpatient prescription drug  coverage for all Medicare beneficiaries. Like Part B, participation in Part D is voluntary. However, the Part D benefit is delivered through plans only. Unlike Part A and Part B, there is no FFS option for Part D drug coverage. Medicare beneficiaries must select a drug plan through which they receive Part D coverage.

Medicare Drug Plans
There are 2 Medicare prescription drug plans. If Medicare patients elect to receive Part D drug coverage and wish to receive Part A and Part B benefits through the traditional government-run FFS system, they may choose from numerous stand-alone prescription drug plans. Prescription drug plans are at risk only for Medicare-covered outpatient drugs. The average Medicare beneficiary has approximately 30 different drug plans and benefit designs to choose from.

If Medicare beneficiaries enroll in the Part D benefit but wish to receive their other Medicare benefits—Part A and Part B—through a Medicare Advantage health plan, they may sign up for the Medicare Advantage prescription drug plan of their HMO or PPO.

In 2012, approximately 32.7 Americans are enrolled in Medicare Part D. Approximately 66% of them are enrolled in stand-alone prescription drug plans, and 33% receive Part D benefits through a Medicare Advantage drug plan.

Most Medicare Part D enrollees pay a monthly premium and are subject to an annual deductible, copayments, and a coverage gap (described below). However, approximately 11 million low-income Medicare beneficiaries receive subsidies to cover most or virtually all Medicare Part D costs. Of these individuals, approximately 7 million are also enrolled in their state’s Medicaid program and thus may also receive all Medicaid- covered services. The other 3 million or so beneficiaries are enrolled in subsidy programs designed to substantially reduce costs for low-income beneficiaries who do not qualify for full Medicaid benefits.

Rules Regarding Drugs Often Used in Urology Practices
Medicare Part D is available to everyone who is eligible to enroll in Medicare—individuals aged ≥ 65 years, those with permanent disabilities, and those with end-stage renal disease. This also includes all individuals who already are enrolled in Medicare Part A or Part B.

Urologists and urology practice administrators should remain particularly aware of the availability of drugs frequently taken by patients in the practice, because each Part D plan can have different coverage and cost-sharing requirements.
 

Table 1. Enrollment Considerations for Urology Patients

Patients should be instructed to:

  • Make a list of all prescription medications they are taking, including chemotherapy agents
  • Examine the plan options carefully, because the plan premiums, drug coverage, and patient cost-sharing can vary substantially
  • Check the Medicare plan finder for health, prescription drug, and Medigap plans (www.medicare.gov/find-a-plan/) to see which of the patient’s prescription drugs are on the formulary of the plan of their choice. If patients do not have access to a computer, conducting the search for them will facilitate their being able to afford a necessary drug later and will help ensure compliance
  • Speak with their urology practice administrator, especially if they are unsure whether a drug they are taking is covered by a specific plan
  • Obtain the prescribed drug from a pharmacy that participates in the network of the patient’s Medicare Part D plan. Often, Part D enrollees may also use a mail-order pharmacy service offered by their drug plan

 

Part D formularies are devised with an eye toward the appropriate use of pharmacologic agents and cost. Stand-alone Part D plans may be particularly sensitive to drug cost, because they are at risk for pharmacy expenses alone. Unlike stand-alone Part D plans, Medicare Advantage plans also provide medical benefits, and therefore are potentially able to realize hospital-related and other net medical savings from improved medication therapy.

Urologists and urology practice administrators can provide additional value to their patients by keeping abreast of approved drugs on health plan formularies in their coverage area. Drugs such as oxybutynin or tamsulosin, for example, are likely to be covered in most plans, because they are inexpensive and available in generic formulations; however, there may be more effective agents available. If solifenacin, a branded agent, is available under a patient’s Part D plan, it may require prior authorization or step therapy, because of a higher unit cost. In addition, quantity limitations might apply, based on how much can be dispensed to patients during a specific amount of time (eg, 30 days). Thus, it is important to be aware of the availability on health plan formularies of drugs commonly prescribed by your practice and of limitations imposed on drugs by specific plans, such as prior authorization, step therapy, and quantity limitations.

Before your patients enroll in a Medicare prescription drug plan, encourage them to first determine whether they are eligible for the plan and whether the plan is suitable for their needs (Table 1). Urge them to secure a list of prescription drugs covered by the plan and to determine the cost of the prescription drugs that they take in the plan.

Patients receiving medication for a chronic condition should be urged to find a plan that will offer them continued use of a necessary drug at a reasonable cost and without undue restrictions on quantity. If monthly quantity limitations become an issue (usually with mail-order pharmacies), it may be necessary to prescribe smaller quantities of a drug that could be filled at a local retail pharmacy. To ensure adherence to therapy, practice managers should have a system in place to provide timely prescriptions when necessary to prevent patients from going without their medications.

Medicare prescription drug coverage is also available to patients who have joined or remain in a Medicare Advantage plan that provides all Medicare benefits, including outpatient drug coverage.

Be aware that if a patient is enrolled in a Medicare plan that provides prescription drug coverage and then enrolls in a stand-alone (ie, drug only) prescription drug plan, the patient will be disenrolled from their Medicare Ad­vantage plan and returned to Medicare FFS for Part A and Part B services. This may have consequences for the patient, because many Medicare Advantage plans offer lower premiums or other cost-sharing features—sometimes with added benefits—than traditional FFS Medicare.

Medicare prescription drug plan enrollees must choose a specific benefit option (offered by private insurers) to help pay for their prescription drugs. The annual open enrollment period occurs between November 15 and December 31. Joining or changing a current plan can be done only during the open enrollment period. The plan a patient chooses will become effective on January 1. For further information on Medicare enrollment periods, urology practice administrators should direct patients to www.medicare.org/medicare-basics/  23-medicare-basics/287-medicare-enrollment-periods.html.

Encourage your patients to read their plan coverage carefully on annual renewal or to bring questions about drug coverage to your attention, because changes can occur that may affect their coverage or choice of drugs, such as formulary changes or changes related to plan premiums, deductibles, copayments, and member pharmacies where prescriptions can be filled. All of these issues can affect your patients’ ability to pay for medications, and, ultimately, their adherence to the treatment plan.

Educate Patients on How Medicare Part D Works
Some of your patients may have questions about the Medicare prescription drug benefit. By answering patient questions and serving as a knowledgeable source of information, you have an opportunity to improve patient satisfaction and retention.
A potential customer should first review the prescription drug formulary that lists which drugs a plan covers to be sure his/her current drugs are on that insurer’s formulary.

Educate patients about what to look for in a plan, such as:

  • The formulary (the list of prescription drugs covered by the insurer)
  • The premium (monthly fee for the plan)
  • The deductible (amount you must pay before your plan begins to pay for drugs); no plan may have a deductible higher than $320 (in 2012); some plans have no deductible
  • The copay (amount you must pay toward the cost of each prescription you fill)
  • The member pharmacies that can fill the patient’s prescriptions
  • The coverage gap, the amount of extra coverage provided during the “doughnut hole.”

Explain How a Formulary Works
The formulary lists drugs that are covered by a Part D plan. Plans are often flexible with regard to benefits with cost-sharing. Levels of cost-sharing tend to vary for generic, preferred drugs, and nonpreferred drugs.

Each Medicare drug plan—whether a stand-alone or a Medi­care Advantage plan—is re­quired to cover at least 2 outpatient drugs in every therapeutic class. In addition, these plans are required to cover all drugs in the following 6 drug classes when they are prescribed ac­cording to their approved indication:

  1. Anticonvulsants
  2. Antidepressants
  3. Antineoplastics
  4. Antipsychotics
  5. Antiretrovirals
  6. Immunosuppressants for the treatment of transplant rejection.

Patients should be alerted to check not only the formulary but also the formulary tiers of each plan they are considering, because this affects the cost of each drug. Remind patients that drugs in a lower tier will cost less than drugs in a higher tier. However, if the urologist prescribes a drug in a higher tier, your patient may be able to ask the drug plan for an exception or arrange for a lower copayment.

A formulary finder (available at www.medicare.gov) can help pa­tients determine whether the drugs they need are on a plan’s formulary.

The Epocrates website (www.epo crates.com) provides current tier and step therapy information.

Table 2. Drugs Not Covered by Medicare Part D
  • OTC drugs (however, some Medicare Advantage plans offer limited OTC coverage)
  • Prescription vitamins and minerals
  • Certain antiseizure and antianxiety drugs (barbiturates and benzo-diazepines will be covered in 2014)
  • Fertility drugs
  • Erectile dysfunction drugs (when used to treat sexual or erectile
  • dysfunction)
  • Drugs for weight loss, weight gain, or anorexia
  • Cosmetic and hair growth drugs
  • Cough and cold medications
  • Drugs covered under Medicare Part A or Part B

OTC indicates over the counter.

Alert patients when they are already taking drugs that are not covered by Part D (Table 2). Some of these drugs may be covered for individuals with Medicaid. For Medicaid and Medicare/Medicaid dual-eligibles, direct patients to their state Medicaid program to see which drugs are covered. Again, be sure patients have checked online for drugs covered specifically in their state (www.medicare.gov).

Patients or prescribers must contact the drug plan before certain prescriptions can be filled. All drugs must be medically necessary, and quantity limits on how much medication can be purchased at one time will apply. Quantity limits usually apply for self-administered drugs. Part D covers all commercially available vaccines and all drugs deemed necessary to prevent illness; how-ever, each plan varies regarding which drugs are considered preventive.

Chemotherapeutic Agents
Chemotherapeutic agents require special attention from a coverage perspective. Infused agents are typically covered under Medicare Part B, not Part D. Medicare Part B covers 80% of the cost, and patients pay 20% for the duration of infused chemotherapy. If the Medicare patient is also enrolled in Medicaid, the state Medicaid program will cover the 20% copay. As noted, other low-income Medicare beneficiaries may apply through their Social Security office for special programs, under which Medi­caid pays for some or all of Medicare Part A and Part B cost-sharing on a sliding scale, based on income.

However, Medicare Part D, not Part B, typically covers oral chemo­therapies that have no infusion equivalent. There may be substantial patient cost-sharing associated with oral agents, which may quickly bring patients to the coverage gap, when the patient must pay 100% of the drug cost, as discussed below.

What Is the Coverage Gap?
Under Medicare law, Part D plans have a temporary limit on coverage for prescription drugs. This limit is called a “coverage gap,” also known as the “doughnut hole.” The coverage gap begins after a plan has spent a certain amount of money for drugs covered in the plan on a beneficiary. Because each Part D plan varies, urology practice administrators should instruct their patients to call their plan to get information about the coverage gap.

Accessing Dedicated Help

Physicians
Physicians can access dedicated help for Medicare drug benefit questions at PRIT@ cms.hhs.gov. A regular conference call has been established at 2 pm (ET) on Tuesdays at 1-800-619-2457. Use the pass-code RBDML.

Patients
Call 1-800-MEDICARE or visit www. medicare.gov/find-a-plan/questions/ home.aspx to access the plan finder. Physicians can get information about local organizations and personally direct their patients by visiting www.eldercare.gov.

Low-Income Patients or Patients with No Computer Access
Patients requiring financial help should be directed to call the Social Security Administration at 1-800-772-1213 or to visit www.socialsecurity.gov/prescription help to fill out an application.

In general, when the patient and the insurer pay a combined total of $2930 in 2012 drug spend, the coverage gap comes into play. After spending an additional $4700 out of pocket (OOP), or $6658 in total drug costs under the standard benefit, the plan once again pays a share of the drug cost. These amounts are updated annually.

Closing the Coverage Gap
Under the Affordable Care Act, the Part D coverage gap will be gradually reduced until total beneficiary cost-sharing for brand-name and generic drugs purchased during the coverage gap reaches 25% by 2020. This is funded through a combination of a new, mandatory 50% discount provided by branded drug manufacturers and increased federal government subsidies for both branded and generic drugs. 

For beneficiaries in the coverage gap, branded drugs are discounted by 50% in 2012. Starting in 2013, the federal government will begin to further subsidize the cost of brand-name drugs. Specifically, Medicare will provide an additional 2.5% discount in 2013 and 2014. This added discount—in addition to the 50% discount provided by drugmakers—will increase until it reaches 25% in 2020 and after.

By 2020, the combined discounts from manufacturers and the government will amount to 75%. Medicare Part D beneficiaries will be responsible for the remaining 25%, which is the same amount of cost-sharing as in the initial coverage phase. As with brand-name drugs, the beneficiary will be responsible for the remaining 25% of the cost of a generic drug plus the dispensing fee.

Although the patient in the coverage gap pays only 50% of the cost of a branded drug in 2012, the entire pharmacy price of the drug will count as an OOP expense. This helps to remove patients from the coverage gap faster. However, patients must continue to pay any applicable pharmacy dispensing fee.

While in the coverage gap, Medicare Part D patients receive a 14% discount on the cost of generic drugs in 2012. Medicare will cover an additional 7% in subsidies annually until, in 2020 and thereafter, the subsidy reaches 75% of the cost of generic drugs in the coverage gap.

When requirements and cost thresholds of the coverage gap are met, “catastrophic coverage” begins, meaning that patients will pay only a small coinsurance or copayment for covered drugs for the remainder of the year (5% or $2.60 for generic or preferred multisource drugs and the greater of 5% or $6.50 for all other drugs in 2012).

Medicare Part D enrollees who are also enrolled in Medicaid (ie, dual-eligible) are exempt from Part D premiums, deductibles, and the cov­erage gap, and they have lower copayments. They are also exempt from all other Medicare cost-sharing, including Part B premiums and the deductible, and the 20% copayments for physician services and physician-administered drugs.

How Your Patients Can Save Money during  the Coverage Gap
Patients have several options to help them manage prescription drug costs during the coverage gap:

  1. Switching to generic or lower-cost drugs where possible

  2. Using a mail-order pharmacy

  3. Applying for Medicaid—Medi-care Part D enrollees who are also enrolled in Medicaid are exempt from Part D premiums, deductibles, and the coverage gap, and they have lower copayments

  4. Checking out pharmaceutical assistance programs: many leading drug manufacturers offer such programs for people enrolled in Medicare Plan D; to determine whether this program is offered by the manufacturers of the drugs your patients take, suggest that they visit www.medicare.gov/pharmaceutical-assistance-program/index.aspx

  5. Seeking assistance from a possible state pharmaceutical assistance program (www.medicare.gov/pharma­ ceutical-assistance-program/state-programs.aspx)

  6. Continuing to use the Medicare drug plan each time they fill a prescription to ensure they are getting the correct coverage and manufacturer discounts; this will count toward OOP costs

  7. Exploring national and community-based charitable programs that might offer financial help with drug costs (www.benefitscheckup.org)

  8. Contacting Social Security about qualifying for the Extra Help program to help pay for prescription drugs.

OOP costs that contribute to the maximum threshold and therefore help patients move out of the coverage gap include:

  • The annual deductible
  • Costs of drugs
  • Coinsurance or copayments
  • Manufacturers’ discounts
  • Any fees paid during the coverage gap.

(For more information, see “Bridg ing the Coverage Gap,” www.cms.gov/ Medicare/Prescription-Drug-Cov erage/PrescriptionDrugCovGenIn/ bridgingthegap.html, or call 1-800-MEDICARE.)

Are Your Patients Qualified for Extra Help?
Patients who are unable to continue taking necessary medications because of cost may qualify for a government-sponsored Extra Help program. Individuals earning less than $16,335 (single) or less than $22,065 (married, with no other dependents) in 2012 may qualify for the prescription drug low-income subsidy. Rules vary from state to state, and there also may be restrictions based on a person’s cash resources in savings or checking accounts.

Individuals who are already enrolled in state Med­icaid programs or Supplemental Security Income benefits will automatically qualify for the Extra Help program and need not apply for the benefit.

Extra Help will subsidize the individual’s Part D premium as well as his/her copayments, coinsurance, and deductibles and will be required to pay anywhere from $1 to $6 for each drug. Patients who qualify for Extra Help will not experience a coverage gap.

Individuals can apply for the Extra Help program online (www.ssa.gov/ prescriptionhelp/) or by calling 1-800-772-1213. The National Patient Advocate Foundation (www.npaf. org) or the National Organization for Rare Disorders (www.raredis eases.org) might also help patients in need of assistance with drug costs.

Specialty Tier for High-Cost Drugs
Some higher-cost drugs are in­cluded in what is called a “specialty tier.” Although enrollees can request an exception when a plan designates a drug as nonpreferred, exceptions cannot be made for drugs in the specialty tier. Cost-sharing for drugs listed in the specialty tier typically is approximately 25% coinsurance but may be as high as 50%.

As of 2007, all drugs that cost >$500 per month were eligible for the specialty tier. Today, some drugs on the specialty tier cost >$1000 per month. The objective of the specialty tier is to limit the liability of plans to pay for expensive drugs, because these drugs are not eligible for exceptions requests from enrollees.

Although the use of the specialty tier has increased annually, there are concerns that the specialty tier may limit patient access to prescription drugs. As a result, in 2010, New York became the first state to prohibit the use of specialty drug tiers. Several states are in the process of following suit. Specialty drugs are used by 2% of Americans, but these drugs are expected to account for 40% of total drug spending by 2014.

Controlling Drug Costs: Medication Therapy Management Strategies
Your patients are likely to have significant OOP costs for their medications. Fortunately, using medication therapy management (MTM) programs can help control drug costs. MTM services can improve patients’ quality of life and ensure cost-effectiveness and appropriate utilization of drugs by enrollees.

In early 2007, the Agency for Healthcare Research and Quality published the results of a survey of 70 health insurance plans, covering 12.1 million Medi­care enrollees. The survey findings show that among the most frequently offered plan services are patient education programs (75%);  patient adherence (70%); and medication review (60%) by a pharmacist or by a physician.

Where tiered benefits apply, some services may only apply to a subgroup of enrollees. These services include information provided by mail (used by 75% of plans surveyed), telephone (used by 90.4% of plans with in-house telephone services), or face-to-face interactions with clinicians (used by 19% of plans). The last method proved the most effective. The MTM can be provided by a pharmacist—as they are in 95% of the cases—in cooperation with physicians and directed to beneficiaries; however, 47.6% of programs employ nurses, and 14.3% use physicians.

Patients taking several prescription medications for >1 chronic condition should contact their drug plan to see if they are eligible for an MTM. Part D requires that healthcare providers or pharmacists provide counseling to enrollees with chronic conditions who must use multiple medications. Part of this initiative works to ensure that your patients choose plans that will provide them with continued access to necessary prescription drugs and help them take their medications properly to reduce adverse events.

Trends in Medicare Part D
In 2012, there are fewer stand-alone prescription drug plans than there were in 2006, because of mergers and a federal effort to simplify beneficiary choices by narrowing the number of complex benefit designs offered by each insurer.

Nonetheless, Medicare beneficiaries have an average of 31 stand-alone  prescription drug plans to choose from, in addition to multiple Medicare Advan­tage plans that offer all Medicare services, including Part D coverage.

The marketplace for Medicare health plans and drug plans is highly competitive. To increase enrollment, Part D plans have changed their benefit structures and premium design. Most drug plans now offer a no-deductible option and have replaced coinsurance with a tiered copayment for covered drugs. By 2020, the “doughnut hole” will be substantially reduced.

Although it is a generous drug benefit, Medicare Part D remains extraordinarily complex for all of those concerned—patients, physicians, pharmacies, plans, and manufacturers. Patients will require continued guidance through the Part D maze. In addition, like the rest of Medicare, Part D will likely see frequent legislative and regulatory changes in the future.

Urology practice administrators can play an important and valuable role in the Medicare Part D process by helping patients navigate the system and identify plans that will cover necessary drugs, prioritizing the drugs on their patients’ regimens, and being proactive during the appeals process.

Acknowledgment
Sandra Paton contributed to the development of this article.

Patient Resources
Epocrates. www.epocrates.com.

Medicare.gov. Understanding Medi­­care enrollment periods. www.medicare.gov/publications/ Pubs/pdf/11219.pdf.

Medicare Part D prescription drug plan and Medicare Advan­tage plan finder tutorial. www.q1 medicare.com/PartD-Medicare_ PartDPlanFinderTutorial.php. 

Medicare Prescription Drug Cov­erage (Part D). www.medicare. gov/navigation/medicare-basics/ medicare-benefits/part-d.aspx#CoverageGap.
My Medicare Matters. www.my medicarematters.org/.

Social Security. Extra help with pre­scription drug plan costs. www.socialsecurity.gov/prescriptionhelp.

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