Medicare Part D Prompts Formulary Concerns

April 1, 2006
Laura Newman, MA

When Medicare enrollees became entitled to the first-ever outpatient prescription drug benefit in January, the program was introduced with great fanfare and with the mission of Medicare Part D programs to make drugs more affordable for the elderly and disabled. The Medicare drug benefit issue, however, has been mired in controversy since Congress took it up years ago.

When Medicare enrollees became entitled to the first-ever outpatient prescription drug benefit in January, the program was introduced with great fanfare and with the mission of Medicare Part D programs to make drugs more affordable for the elderly and disabled. The Medicare drug benefit issue, however, has been mired in controversy since Congress took it up years ago.Now, as the program goes forward, press accounts have described the transition as nothing short of bedlam. Reports that "dual eligibles" (those assigned to Part D plans that are both on Medicaid and Medicare) are unable to get their drugs and coverage squared away have appeared in newspapers around the country. The federal government and states have stepped in to ensure coverage until the mess is resolved.Deciding on a plan that people will be locked into for a year has created fear and anxiety. In the end, will drugs be more affordable for patients with multiple sclerosis, Parkinson disease, Alzheimer disease, or epilepsy? Will appropriate access be an issue? Some neurologists say it will take a while to answer those questions.FINDING A PLANAccording to Peter B. Bach, MD, senior adviser, and Mark B. McClellan, MD, the administrator of the Centers for Medicare & Medicaid Services (CMS), a lot of resource material is available to help patients and physicians make the transition to finding a Part D plan.1Materials for physician offices can be printed from the CMS Web site, www.medicare.gov, and from several others, such as the Health and Human Services Elder Care Service Web site, www.eldercare.gov. These materials can be made available in physician waiting rooms. Regional CMS offices and partners have organized more than 40,000 training sessions and presentations, creating 140 coalition networks with 10,000 volunteer counselors. Information is also available by phone (800-MEDICARE). Physicians can participate in a continuing medical education course for credit offered by the University of Kansas.Before selecting a plan, patients should review their medications and dosages, according to Deane Beebe, communications director at the Medicare Rights Center in New York City. In general, monthly costs are estimated based on a standard 30-day dosage set by Medicare. This limit is intended to prevent overuse and contain costs.CMS has set up interactive tools on the Medicare Web site2 for comparing plans and pharmacies in different geographic areas. There, patients can compare their total yearly costs by plan in their zip code. Cost calculations include monthly drug premium, monthly cost share, the annual deductible, and information on mail order and local pharmacies.When Elaine Jones, MD, neurologist at Southern New England Neurology, Barrington, RI, plugged in 5 drugs for a typical patient with dementia and looked for plans in the Bristol/Providence, RI area, her search pulled up 45 Part D plans for prospective enrollees to sort through."The premiums and copays are all over the map," she said. "They've got plans I have never heard of, who have had no visibility in Rhode Island. If I can hardly understand it and you can't understand it, how do you think my patients and their families are going to do it?" In Bristol, the total estimated annual cost based on use of the 5 drugs ranged from $1880 to $4298. Monthly drug premiums ranged from $7.32 to $65.58. (Monthly costs columns show costs after the deductible; costs during the gap in coverage, and costs once catastrophic coverage benefits begin.)Jones has taken a lot of time with her patients to help them make informed decisions, but the endeavor has proved to be very time-consuming. Moreover, she said that some of the information on the Medicare site was downright wrong. For example, in another search, she found that interferon beta-1a (Rebif, Serono and Pfizer) was calculated at 1 injection per month, rather than 3 per week.WHAT'S IN THE FORMULARY?Adding to the complexity are the formularies of the various private insurance plans available through Medicare Part D. The Medicare Web site offers a way to search plans based on specific drugs in each state. The formularies are required to be out in the open, but getting to the desired information on some plans' Web sites has proved difficult. However, Gregory Barkley, MD, a neurologist at the Henry Ford Health Center in Detroit, noted that it is a "tremendous victory for everything to be finally out in the open."One rule that could prove especially worrisome is that a plan can pull any drug from its formulary with 30 days' notice; physicians and patients will have 60 days to switch medications. Lawrence S. Honig, MD, PhD, associate professor of clinical neurology at Columbia University's Taub Institute for Research on Alzheimer's Disease and the Aging Brain, noted: "It remains to be seen how much of an issue this will be. Will plans change their benefits when they wish-bait-and-switch covered drugs?"Advocacy groups, such as the Medicare Rights Center (www.medicarerights.org), are recommending that patients discuss their current medications with their clinicians and compare that with what the formularies allow. For example, patients might ask neurologists if an alternative, cheaper medication on the formulary could be substituted. The Medicare Rights Organization provides the most exhaustive information on the new prescription benefit.3When Jones was asked whether she would consider moving a patient to a lower-cost generic, she replied: "I'd have to carefully take a look at the situation. If I can help patients save money without impacting on efficacy, I'd consider it."Barkley has been working with the Epilepsy Foundation to get many newer epilepsy drugs on the Part D formularies. "Some of the newer anticonvulsants have fewer side effects, whereas the older drugs have been associated with damage to the developing fetus and other side effects," he explained. "Some drugs are most appropriate for genetic forms of epilepsy; others are not."Barkley pointed out that efforts to get some of the newer medications on the formularies have been paying off. "For example, many formularies now list Lamictal, Zonegran, Topamax, and Keppra," he said. "The most important battle is getting drugs on the formulary. However, just because a drug is on the formulary doesn't mean patients have access to it."Many hurdles could mitigate getting the best medications. Some plans require prior approvals before some drugs are dispensed; plans can require that patients try less expensive, similar alternatives ("step therapy"), and they can establish quantity limits. Medications are placed into tiers in the same manner as private managed care plans. When patients move from tier 1 (typically generics), to tier 2 (preferred brand), to tier 3 (nonpreferred brand-name medications), their copayments will rise exponentially. Patients and neurologists might have to file appeals to get drugs approved.A Part D plan is required to put at least 2 drugs in each class on its formulary. Eric Kelts, MD, a neurologist at Black Hills Neurology, Rapid City, SD, said, "The primary problem with this is that some patients respond idiosyncratically to the members of a drug class. For example, a patient with migraine may find Relpax much more efficacious than Amerge, although both are within the same class. Most plans allow more drugs in a class, so in the long run, this may not turn out to be a big concern."Honig questioned whether plans might lump together medications that neurologists view as distinct. For example, he explained: "It was originally suggested that acetylcholinesterase and glutamatergic Alzheimer's drugs be lumped together - similarly for the various anti-Parkinson's agents of different types." These drug classes are now divided into distinct categories.Another concern is whether, in specific cases, assigning drugs to tier 1, will be unfair. A case in point is placing ergoloid mesylates for Alzheimer disease in tier 1, with the lowest copayments. "These are not appropriate drugs," commented Honig. "They are simply not efficacious. Nobody uses them anymore. It's ridiculous for them to be on there."Medicare has excluded benzodiazepines from the formularies. The American Psychiatric Association and the American Neurological Association are working with the AMA to reverse this decision, according to Mark Nuwer, MD, a neurologist and chief of clinical neurophysiology at the University of California at Los Angeles, who said the benzodiazepines are prescribed for seizure prevention in children. Although the category is one that readily could be overused, Kelts observed: "These are widely used in the treatment of breakthrough seizure activity and as a pre-medication for potentially anxiety-inducing procedures. No medication class with legitimate medical uses should be arbitrarily excluded from the plans."OUT-OF-POCKET SPENDING PROJECTIONSAccording to a Congressional Budget Office cost estimate, on average, Part D enrollees will spend $792 out of pocket for prescription drugs (excluding premiums), or approximately 37% less than the $1257 they would have paid before the drug coverage went into effect. But the average is misleading, suggests an analysis by the Actuarial Research Corporation and the Henry J. Kaiser Family Foundation.4The Kaiser report, downloadable from the Kaiser Web site (www.kff.org/ medicare/7201.cfm), projected the following:-Patients with low-income subsidies stand to gain the most from Part D plans, with projected declines of 83% in out-of-pocket drug spending.-The 2.3 million low-income beneficiaries who did not have Medicaid before 2006 are most likely to gain from Part D. In dollar terms, that translates into out-of-pocket savings of $1400 per year.-Medicare participants who were on both Medicare and Medicaid before 2006 (dual eligibles) are projected to spend just $263 less under the plan. However, those without low-income subsidies are projected to spend, on average, just 28% less.-One in 4 beneficiaries is projected to have spending in the coverage gap. This gap requires participants to pay 100% of their total costs between $2250 and $5100 before receiving catastrophic benefits.-Nearly half of Part D participants spending in the coverage gap (44%, or 3.1 million) are projected to receive catastrophic benefits, defined as incurring at least $3600 in out-of-pocket costs.-Among those who hit the catastrophic threshold, 1 in 10 are estimated to see a 37% reduction in out-of-pocket spending-from $5980 before the plan to $3784 with the plan.-One in 4 beneficiaries are expected to spend more with the drug plans, to some extent because they have either low drug spending, good prescription drug coverage, or because they are projected to lose access to more comprehensive drug coverage, such as an employer-sponsored retiree plan.-Three million Part D participants (10%) are expected to have no changes in drug spending in 2006."WAIT AND SEE"Although the plans have gotten off to a rocky start in some parts of the country, Nuwer said that he hasn't seen many of the problems described in the newspapers. "It is not that I doubt that these events have happened, but I just haven't seen them." Nuwer is inclined to give the program the next several months to a year to see how well it is working.Medicare beneficiaries have been told that they will face penalties of 1% of premium per month for failing to sign up for Part D by the May 15 deadline. Although the vast majority of the elderly and disabled currently have limited or no coverage, in November 2005, health plans were required by law to notify patients by letter about whether their current coverage is deemed "creditable" (ie, "as good as or better than" the Medicare drug benefit). If insured patients have not received a letter, they should request one from their insurer and hold onto it. Signing up for a plan now is not advised.Bruce Stuart, PhD, professor and executive director of the Peter Lamy Center on Drug Therapy and Aging at the University of Maryland School of Pharmacy, has stated repeatedly that CMS was handed "an impossible task and rose to the occasion." Despite the continuing difficulties in getting the program off the ground and hindsight that better strategies might have served the dual eligibles, Stuart gave CMS an A+ in moving the program forward.Yet, a lot of uncertainties lie ahead. "Right now, it is just 'wait and see,'" Nuwer said. "It will be interesting to follow up on this in 3 to 6 months."Honig raised these questions: "How many of these multitudinous plans will survive? Will plans change their benefits? How much money will the plan cost the government and will there be changes in premiums, cut points, or benefits as the drug plan goes forward?"REFERENCES1. Bach PB, McClellan MB. Perspective. A prescription for a modern Medicare program. N Engl J Med. 2005;353:2733-2735.2. Medicare. Available at: www.medicare.gov. Accessed February 5, 2006.3. Medicare Rights Center. Available at: www.medicarerights.org. Accessed February 12, 2006.4. Actuarial Research Corporation and Henry J. Kaiser Family Foundation. Estimates of Medicare Beneficiaries Out-of-pocket Drug Spending in 2006. Modeling the Impact of the MMA. Executive summary. November 2004.Laura Newman, MA, is a freelance writer in New York City.http://www.appneurology.com/