Medicare Prescription Drug Coverage

Todd Stankewicz, RPh, MPH, MBAActing Associate Regional AdministratorCMS - Chicago

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This session will help you to Describe how Health Care Reform will impact Medicare

beneficiaries in 2014 Recognize Medicare prescription drug coverage

• Under Medicare Part A (Hospital Insurance), Part B (Medical Insurance), and Part D

Summarize eligibility and enrollment Compare and choose plans Describe the Medication Therapy Management

program

Session Objectives

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Affordable Care Act TimelineAffordable Care Act Timeline

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Insurance companies could turn away the 129 million Americans with pre-existing conditions

Premiums had more than doubled over the last decade, while insurance company profits were soaring

Tens of millions were underinsured, and many who had coverage were afraid of losing it

50 million Americans had no insurance at all

Before the Affordable Care Act…Before the Affordable Care Act…

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In March 2010, President Obama signed the Affordable Care Act into law

The Health Care LawThe Health Care Law

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New Survey of Young Adults: 7.8 Million Gained New or Better Coverage Through Affordable Care Act

7.3 million seniors and people with disabilities who reached the donut hole in their Medicare Part D (Medicare Prescription Drug Coverage) plans have saved $8.9 billion on their prescription drugs

16.5 million people with traditional Medicare took advantage of at least one free preventive service in the first six months of 2013.

71 million privately insured people gained improved coverage for preventive services

Affordable Care Act – Coverage Accomplishments

Affordable Care Act – Coverage Accomplishments

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Slowest sustained national health spending growth in 50 years• Low growth continuing in 2013 for Medicare and Medicaid

Rate increases fell from 75% in 2010 to 14% so far in 2013

$500 million was returned to consumers this summer and $1 billion was returned last summer• Plans now must spend 80% on healthcare

$4.2 billion recovered in 2012 from anti-fraud efforts – a record high – for a total of nearly $15 billion over the last 4 years, double that of the previous 4 years

Affordable Care Act – Cost Savings

Affordable Care Act – Cost Savings

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January 1, 2014 Coverage through Health Insurance Marketplace begins (as early as) Discrimination due to pre-existing conditions or gender is prohibited Annual Limits on Insurance Coverage will be eliminated Advanced Premium Tax Credits will be available The Small Business Tax Credit will increase More people will be eligible for Medicaid (in some states)

August 2013 October 1, 2013 Expect training to begin for

consumer assisters like Navigators, as well as for agents and brokers

SHOP (Employer) Call Center live

Open enrollment in the Health Insurance Marketplace begins

A Look AheadA Look Ahead

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Medicare isn’t part of the Marketplace• In most cases it will be to your advantage to sign up for or

keep Medicare You may pay more for coverage in the Marketplace You may have to pay a penalty for Medicare Parts A, B, and D

if you choose to sign up for Medicare later You won’t be eligible for lower costs to help pay your

premiums or cost-sharing in the Marketplace If you’re in the Marketplace when you become eligible for

Medicare, you lose any tax credit/cost-sharing reduction you may have had

People with MedicarePeople with Medicare

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Medicare overview Medicare prescription drug coverage under

• Part A (Hospital Insurance) • Part B (Medical Insurance)

Medicare Prescription Drug Coverage Basics

The Four Parts of Medicare

Part A Hospital

Insurance

Part B Medical

Insurance

Part C Medicare

Advantage Plans (like

HMOs/PPOs) Includes Part A,

Part B and sometimes Part

D coverage

Part D Medicare

Prescription Drug

Coverage

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Medicare Prescription Drug Coverage

Prescription drug coverage under Part A, B, or D depends on• Medical necessity • Health care setting• Medical indication• Any special drug coverage requirements

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Part A Prescription Drug Coverage

Part A generally pays for all drugs during a covered inpatient stay• In hospital or skilled nursing facility (SNF)

Drugs received as part of treatment • Hospice

Drugs for symptom control and pain relief only

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Part B Prescription Drug Coverage

Part B covers limited outpatient drugs • Injectable and infusible drugs that are

Not usually self-administered, and Administered as part of a physician service

• Administered through Part B-covered Durable Medicare Equipment (DME)

Such as nebulizers and infusion pumps Only when used with DME in your home

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Part B Prescription Drug Coverage

Part B covers limited outpatient drugs • Some oral drugs with special coverage requirements

Anti-cancer drugs Anti-emetic drugs Immunosuppressive drugs, under certain

circumstances • Certain immunizations

Flu shot Pneumococcal pneumonia vaccine

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Part B Prescription Drug Coverage

Generally doesn’t cover self-administered drugs in hospital outpatient setting • Unless required for hospital services you’re

receiving If enrolled in Part D, drugs may be covered

• If not admitted to hospital• May have to pay and submit for reimbursement

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Medicare prescription drug coverage Medicare drug plan benefits and costs

Medicare Part D Benefits and Costs

Medicare Prescription Drug Coverage

Also called Medicare Part D Prescription drug plans approved by Medicare Run by private companies Available to everyone with Medicare Must be enrolled in a plan to get coverage Two sources of coverage

• Medicare Prescription Drug Plans (PDPs)• Medicare Advantage Plans with Rx coverage (MA-PDs)

And other Medicare health plans with Rx coverage 18

Medicare Drug Plans

Can be flexible in benefit design Must offer at least a standard level of coverage May offer different or enhanced benefits

• Lower deductible• Different tier and/or copayment levels• Coverage for drugs not typically covered by Part D

Benefits and costs may change each year

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Medicare Drug Plan Costs

Costs vary by plan In 2014, most people will pay

• A monthly premium• A yearly deductible• Copayments or coinsurance• 47.5% for covered brand-name drugs in coverage gap • 72% for covered generic drugs in coverage gap • Very little after spending $4,550 out-of-pocket

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Standard Structure in 2014

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Ms. Smith joins the ABC Prescription Drug Plan. Her coverage begins on January 1, 2014. She doesn’t get Extra Help and uses her Medicare drug plan membership card when she buys prescriptions.

Monthly Premium – Ms. Smith pays a monthly premium throughout the year.

1. Yearly deductible

2. Copayment or coinsurance (what you pay at the pharmacy)

3. Coverage gap

4. Catastrophic coverage

Ms. Smith pays the first $310 of her drug costs before her plan starts to pay its share.

Ms. Smith pays a copayment, and her plan pays its share for each covered drug until their combined amount (plus the deductible) reaches $2,850.

Once Ms. Smith and her plan have spent $2,850 for covered drugs, she’s in the coverage gap. In 2014, she pays 47.5% of the plan’s cost for her covered brand-name prescription drugs and 72% of the plan’s cost for covered generic drugs. What she pays (and the discount paid by the drug company) counts as out-of-pocket spending, and helps her get out of the coverage gap.

Once Ms. Smith has spent $4,550 out-of-pocket for the year, her coverage gap ends. Now she only pays a small coinsurance or copayment for each covered drug until the end of the year.

Brand-Name Prescription Drug Savings in the Coverage Gap

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Brand-Name Prescription Drug Savings in the Coverage Gap

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

100

50 50 47.5 47.5 45 4540

3530

25

50 50 50 50 50 50 50 50 50 50

2.5 2.5 5 510

1520

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Manufacturer Discount Plan Pays Beneficiary Pays

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Generic Drug Cost Sharing: 2010-2020

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2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Generic Drug Savings in the Coverage Gap

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

07

1421

2835

4249

5663

75

10093

8679

7265

5851

4437

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Plan Pays Beneficiary Pays

True Out-of-Pocket (TrOOP) Costs

Expenses that count toward your out-of-pocket threshold• $4,550 in 2014

After threshold you get catastrophic coverage• Pay only small copayment or coinsurance for

covered drugs Explanation of Benefits (EOB) shows TrOOP

costs to date TrOOP transfers if you switch plans mid-year

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Which Payment Sources Count Toward TrOOP?

Sources That Count Sources That Don’t Count Payments made by you, your

family members, or friends Qualified State Pharmacy

Assistance Programs (SPAPs) Medicare’s Extra Help Most charities (not if established

or run by employer/union) Indian Health Services AIDS Drug Assistance Programs The discount you get on covered

brand-name drugs in the coverage gap

Your monthly plan premium Share of the drug cost paid by your

Medicare drug plan Group Health Plans (including

employer/union retiree coverage) Government-funded programs

(including Medicaid, TRICARE, VA) Patient Assistance Programs (PAPs) Other third-party payment

arrangements Other types of insurance The discount you get on covered

generic drugs in the coverage gap

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Covered and non-covered drugs Access to covered drugs

Medicare Part D Drug Coverage

Part D-Covered Drugs

Prescription brand-name and generic drugs• Approved by Food and Drug Administration (FDA)• Used and sold in United States• Used for medically-accepted indications

Includes drugs, biological products, and insulin• Supplies associated with injection of insulin

Plans must cover range of drugs in each category Coverage and rules vary by plan

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Required Coverage

All drugs in 6 protected categories• Cancer medications• HIV/AIDS treatments• Antidepressants• Antipsychotic medications• Anticonvulsive treatments• Immunosuppressants

All commercially-available vaccines• Except those covered under Part B (e.g., flu shot)

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Drugs Excluded by Law Under Part D

Drugs for Anorexia, weight loss, or weight gain Erectile dysfunction drugs when used for the

treatment of sexual or erectile dysfunction Fertility drugs Drugs for cosmetic or lifestyle purposes Drugs for symptomatic relief of coughs and colds Prescription vitamin and mineral products Non-prescription drugs

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Formulary

A list of prescription drugs covered by the plan May have tiers that cost different amounts

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Tier Structure Example

Tier You PayPrescription

Drugs Covered

1 Lowest copayment Most generics

2 Medium copayment Preferred, brand-name

3 High copayment Non-preferred, brand-name

Specialty Highest copayment or coinsurance

Unique, very high-cost

Formulary Changes

Plans may change categories and classes • Only at beginning of each plan year • May make maintenance changes during year

e.g., replacing brand-name drug with new generic Plan usually must notify you 60 days before changes

• May be able to use drug until end of calendar year• May ask for exception if other drugs don’t work

Plans may remove drugs withdrawn from market without 60-day notification

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Rules Plans Use to Manage Access to DrugsPrior Authorization

Doctor must contact plan for prior approval before drug will be covered• Must show medical necessity for drug

Step Therapy Type of prior authorization Must first try similar, less expensive drug Doctor may request an exception if

• Similar, less expensive drug didn’t work, or• Step therapy drug is medically necessary

Quantity Limits Plan may limit drug quantities over a period of time for safety and/or cost

Doctor may request an exception if additional amount is medically necessary

If Your Prescription Changes

Get up-to-date formulary information from plan • By phone or on plan’s website

Give doctor copy of plan’s formulary If the new drug isn’t on plan’s formulary

• Can request a coverage determination from plan• May have to pay full price if plan still won’t cover

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Things to consider Steps to choosing a Medicare drug plan What to expect

Comparing and Choosing Plans

Things to Consider Before Joining a Plan

Important questions to ask• Do you have other current health insurance coverage?• What about current prescription drug coverage?

Is any prescription drug coverage you might have as good as Medicare drug coverage?

• How does your current coverage work with Medicare? Could joining a plan affect your current coverage?

Or affect a family member’s coverage?

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Step 1: Prepare

Prepare by gathering together information• Current prescription drug coverage• Prescription drugs, dosages, and quantities• Preferred pharmacies• Medicare card• ZIP code

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Step 2: Compare Using Medicare Plan Finder

Search for drug and health plans

Personalize your search to find plans that meet your needs

Compare plans based on star ratings, benefits,

costs, and more Enroll in a plan

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Step 3: Decide and Join

Decide which plan is best for you and enroll• Online enrollment

www.medicare.gov Plan’s website

• Enroll by phone 1-800-MEDICARE (1-800-633-4227)

TTY users should call 1-877-486-2048 Call plan

• Mail or fax paper application to plan

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What New Members Can Expect

• Your plan will send you• An enrollment letter• Membership materials, including card• Customer service contact information

If your current drug isn’t covered by plan• You can get a transition supply (generally 30 days)• Work with prescriber to find a drug that’s covered• Request exception if no acceptable alternative

drug is on the list

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Annual Notice of Change (ANOC)

All Medicare drug plans must send ANOC to members by September 30th • May be sent with Evidence of Coverage

Will include information for upcoming year• Summary of Benefits• Formulary• Changes to monthly premium and/or cost sharing

Read ANOC carefully and compare your plan with other plan options

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5-Star Special Enrollment Period (SEP)

Can enroll in 5-Star Medicare Advantage (MA), Prescription Drug Plan (PDP), MA-PD, or Cost Plan

Enroll at any point during the year• Once per year

New plan starts first day of month after enrolled Star ratings given once a year

• Ratings assigned in October of the past year• Use Medicare Plan Finder to see star ratings

Look at Overall Plan Rating to find eligible plans

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Results: Many More Medicare Advantage Enrollees in 4- and 5-Star Plans

2-star6%

3-star58%

4-star28%

5-star9%

2-star14%

3-star70%

4-star17%

2009 2012

Source: Percentages based on 2009 and 2012 MA enrollment statistics, compared using 2013 star rating methodology.

2009 2012

2-3 star plans 84% 63%

4-5 star plans 16% 37%

Medicare Advantage Enrollment

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Qualifying for a MTM program Services provided to beneficiaries enrolled in

MTM programs

Medicare Part D Medication Therapy Management

MTM: 2013 Dollar Cost Threshold

• “Sponsors must target beneficiaries who meet the other two criteria and who are likely to incur annual costs for Part D drugs of at least $3,017.”

• The cost threshold is adjusted each year by an annual percentage based on data from the previous year’s expenditures.

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Provider of MTM Services

Percent of plans utilizing each provider type

• “May be furnished by a pharmacist or other qualified provider;”

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MTM Services 2013

• Must target beneficiaries AND prescribers• Offer a Comprehensive Medication Review

(CMR) by a pharmacist or other qualified provider at least annually to all targeted beneficiaries enrolled in the MTM program (including LTC beneficiaries)

• Interactive, person-to-person or telehealth consultations

• Quarterly targeted medication reviews (TMRs) with follow-up interventions when necessary

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Written Summary of CMR

• An individualized, written summary using CMS’ standardized format must be provided to the beneficiary, or to the beneficiary’s prescriber, caregiver, or other authorized representative• Includes three components:

•Cover Letter•Medication Action Plan•Personal Medication List

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• Almost 95% of programs provide the CMR summary in CMS’ standardized format by mail. Over 22% also provide the summary in person after the CMR

Required MTM ServicesCMR Summary Delivery Method

Required MTM ServicesCMR Summary Delivery Method

• 92.4% of programs offer the interactive, person-to-person CMR consultation via the phone.

• Over 40% (42.4%) of programs also offer face-to-face consultations (up from 28.4% in 2012)

• 16% of programs offer CMRs through telehealth technologies (up from 1% in 2012).

Required MTM ServicesCMR Delivery Method

Required MTM ServicesCMR Delivery Method

Outcomes Measurement

• “Sponsors are expected to have a process in place to:– measure, analyze, and report the outcomes of their MTM

programs, – determine whether or not goals of therapy have been

reached;– capture drug therapy recommendations and resolutions

made as a result of the MTM recommendations; and– capture beneficiary satisfaction with MTM services,

providers, and outcomes.”

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Medicare Prescription Drug Coverage Resource GuideResources Medicare Products

www.medicare.gov1-800-MEDICARE (1-800-633-4227)(TTY users should call 1-877-466-2048)

Prescription Drug Benefit Manualhttp://www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovContra/PartDManuals.html

PDP Enrollment and Disenrollment Guidancehttp://www.cms.gov/Medicare/Eligibility-and-Enrollment/MedicarePresDrugEligEnrol/index.html

Local State Health Insurance Programswww.medicare.gov/contacts

Centers for Medicare & Medicaid Serviceswww.cms.gov

Social Security 1-800-772-1213www.socialsecurity.gov

Medicare’s Limited Income NET Program1-800-783-1307 or 1-877-801-0369 (TTY)e-mail : MedicareLINET@cms.hhs.gov

Affordable Care Act www.healthcare.gov/law/full/index.html

RxAssistA directory of Patient Assistance Programs (PAPs) www.rxassist.org

Medicare Part D Appeals www.medicarepartdappeals.com

Determining the Part B income- related premium SSA publication 10161 available at http://www.socialsecurity.gov/pubs/10536.pdf

Medicare & You HandbookCMS (Product No. 10050)

Your Guide to Medicare Prescription Drug Coverage(CMS Product No. 11109)

Your Medicare Benefits(CMS Product No. 10116)

To get these products:View and order single copies: www.medicare.gov Order multiple copies (partners only):productordering.cms.hhs.gov(You must register your organization)

This training module is provided by the

CMS National Training Program

For questions about training products e-mail training@cms.hhs.gov

To view all available CMS National Training Program materials,or to subscribe to our e-mail list, visit

http://cms.gov/Outreach-and-Education/Training/CMSNationalTrainingProgram

Appendix A: Part B-Covered Oral Anticancer Drugs*

Busulfan Capecitabine Cyclophosphamide Etoposide Melphalan Methotrexate Temozolomide

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*List is subject to change

Appendix B: Part B-Covered Oral Anti-Emetics for Use Within 48 Hours of Chemotherapy*

3 oral drug combination of• Aprepitant• A 5-HT3 Antagonist• Dexamethasone

Chlorpromazine Hydrochloride Diphenhydramine Hydrochloride Dolasetron Mesylate

(within 24 hours) Dronabinol

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Granisetron Hydrochloride (within 24 hours)

Hydroxyzine Pamoate Ondansetron Hydrochloride Nabilone Perphenazine Prochlorperazine Maleate Promethazine Hydrochloride Trimethobenzamide

Hydrochloride

*List is subject to change

Appendix C: Part B-Covered Immunosuppressive Drugs*

Azathioprine-oral Azathioprine-parenteral Cyclophosphamide-oral Cyclosporine-oral Cyclosporine-parenteral Daclizumab-parenteral Lymphocyte Immune Globulin,

Antithymocyte Globulin-parenteral Methotrexate-oral Methylprednisolone-oral

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Methylprednisolone Sodium Succinate Injection

Muromonab-Cd3-parenteral Mycophenolate Acid-oral Mycophenolate Mofetil-oral Prednisolone-oral Prednisone-oral Sirolimus-oral Tacrolimus-oral Tacrolimus-parenteral

*List is subject to change

Appendix D: 2013 Standard Drug Benefit

Benefit Parameters 2013 2014Deductible $325 $310

Initial Coverage Limit $2,970.00 $2,850.00

Out-of-Pocket Threshold $4,750.00 $4,550.00

Total Covered Drug Spending at OOP Threshold $6,954.52 $6,690.77

Minimum Cost-Sharing in Catastrophic Coverage $2.65/$6.60 $2.55/$6.35

Extra Help Copayments 2013 2014Institutionalized $0 $0

Receiving Home and Community-Based Services $0 $0

Up to or at 100% Federal Poverty Level (FPL) $1.15/$3.50 $1.20/$3.60

Full Extra Help $2.65/$6.60 $2.55/$6.35

Partial Extra Help (Deductible/Cost-Sharing) $66/15% $63/15%

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Appendix E: Medicare Drug Plan Costs if You Automatically Qualify for Extra Help

If you have Medicare and…Your monthly premium

Your yearly deductible

Your cost per prescription at the pharmacy (until $4,750*)

Your cost per prescription at the pharmacy (after $4,750*)

Full Medicaid coverage for each full month you live in an institution, like a nursing home

$0 $0 $0 $0

Full Medicaid coverage and have a yearly income at or below $11,490 (single) $15,510 (married)

$0 $0 Generic and certain preferred drugs: no more than $1.15 Brand-name drugs: no more than $3.50

$0

Full Medicaid coverage and have a yearly income above $11,490 (single) $15,510 (married)

$0 $0 Generic and certain preferred drugs: no more than $2.65 Brand-name drugs: no more than $6.60

$0

Help from Medicaid paying your Medicare Part B premiums

$0 $0 Generic and certain preferred drugs: no more than $2.65 Brand-name drugs: no more than $6.60

$0

Supplemental Security Income (SSI) $0 $0 Generic and certain preferred drugs: no more than $2.65 Brand-name drugs: no more than $6.60

$0

Note: There are plans you can join and pay no premium. There are other plans where you will have to pay part of the premium even when you automatically qualify for Extra Help. Tell you plan you qualify for Extra Help and ask how much you will pay for your monthly premium. **Your cost per prescription generally decreases once the amount you pay and Medicare pays as the Extra Help reach $4,750 per year. The cost sharing, income levels, and resources listed are for 2013 and can increase each year. Income levels are higher if you live in Alaska or Hawaii, or you or your spouse pays at least half of the living expenses of dependent family members who live with you, or you work.

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Appendix E: Medicare Drug Plan Costs if You Apply and Qualify for Extra Help

If you have Medicare and…Your

monthly premium

Your yearly

deductible

Your cost per prescription

at the pharmacy (until $4,750*)

Your cost per prescription

at the pharmacy (after $4,750*)

A yearly income below $15,511.50 (single) $20,938.50 (married) with resources of no more than $8,580 (single) $13,620 (married)

$0 $0 Generic and certain preferred drugs: no more than $2.65 Brand-name drugs: no more than $6.60

$0

A yearly income below $15,511.50 (single) $20,938.50 (married) with resources between $8,580 and $13,330 (single) $13,620 and $26,580 (married)

$0 $66 up to 15% of the cost of each prescription

Generic and certain preferred drugs: no more than $2.65 Brand-name drugs: no more than $6.60

A yearly income between $15,511.50 and $16,086 (single) $20,938.50 and $21,714 (married) with resources up to $13,330 (single) $26,580 (married)

25% $66 up to 15% of the cost of each prescription

Generic and certain preferred drugs: no more than $2.65 Brand-name drugs: no more than $6.60

A yearly income between $15,638 and $16,660.50 (single) $21,182 and $22,489.50 (married) with resources up to $13,330 (single) $26,580 (married)

50% $66 up to 15% of the cost of each prescription

Generic and certain preferred drugs: no more than $2.65 Brand-name drugs: no more than $6.60

A yearly income between $16,660.50 and $17,235 (single) $21,938.50 and $23,265 (married) with resources up to $13,330 (single) $26,580 (married)

75% $66 up to 15% of the cost of each prescription

Generic and certain preferred drugs: no more than $2.65 Brand-name drugs: no more than $6.60

Appendix F: Guide to Consumer Mailings

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Appendix F: Guide to Consumer Mailings

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Appendix F: Guide to Consumer Mailings

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Appendix F: Guide to Consumer Mailings

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Appendix F: Guide to Consumer Mailings

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Appendix G: How Do You Access Medicare’s Limited Income NET Program?

• CMS auto-enrolls you if you have Medicare and get either full Medicaid coverage or SSI benefits Auto-Enrollment

by CMS

• You may use Medicare’s Limited Income NET Program at the pharmacy counter (point-of-sale) Point of Sale

(POS) Use

• You may submit pharmacy receipts (not just a cashier’s receipt) for prescriptions you already paid for out-of-pocket during periods you’re eligible Submit a Receipt

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Appendix G: Medicare’s Limited Income Newly Eligible Transition (NET) Program

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Resources to help pharmacists submit claims • Program Help Desk: 1-800-783-1307• Address: The Medicare Limited Income NET Program

P.O. Box 14310Lexington, KY 40512-4310

• Websites http://www.cms.gov/Medicare/Eligibility-and-Enro

llment/LowIncSubMedicarePresCov/MedicareLimitedIncomeNET.html

http://www.humana.com/pharmacists/pharmacy_resources/information.aspx

• CMS Mailbox: MedicareLINET@cms.hhs.gov

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Appendix H: Levels of Appeal