Insight Matters
Summer 2005

Analyzing Medicare Part D - Many Questions to be Answered
Alice Hale, M.D. and Mark Munetz, M.D.

The article that follows is an excellent summary prepared by the American Psychiatric Association about the new Medicare prescription drug benefit that will begin in January 2006. This is a complex benefit, voluntary for Medicare recipients but mandatory for those with both Medicaid and Medicare (so called "dual eligibles"). As the APA document indicates there are important questions yet to be answered. OPA has been working hard to keep up with the key issues around this unfolding benefit package in order to keep our membership informed. As the answers to our remaining questions unfold, we will keep members informed in the OPA e-Insight Updates (electronic newsletter - if you're not already signed up contact the OPA office). We also intend to publish a substantial update and overview in our Fall issue of Insight Matters.

For now, there are some clear questions awaiting answers. " The biggest unanswered question relates to the formulary. CMS has instructed potential PDPs to have what they call "special formulary inclusions" for 6 classes of medications including antidepressants, antipsychotics, and anticonvulsants". (The others are anti-neoplastic, immunosuppresants and HIV/AIDS drugs.) The message from CMS is that "all or substantially all" of the medications in these categories must be in the formularies. How the PDPs interpret "substantially all" remains to be seen. Indications from CMS are inconsistent and there is concern that PDPs may be permitted to require prior authorization or step therapy ("fail first") to limit access to some of the newer agents. Whether all formulations of a given agent are required, e.g., quick dissolve or depot formulations is also not clear.

" Federal law prohibits coverage under Medicare of any benzodiazepines. Ohio Medicaid can choose to continue covering benzodiazepines for the Dual Eligibles. Whether ODJFS decides to do so remains unknown at this time.
" For the Dual Eligibles and others below the poverty level, while the co-pays are small ($1 for generic/$3 for brand name), for some they may be large enough to limit their ability or willingness to access their medication. It is not known as we write this whether a pharmacy can or must waive collecting the co-pay in order to fill one or more prescriptions.

Stay tuned as the answers emerge and look for a comprehensive update in the next issue of Insight Matters.

Medicare Part D
The Medicare Prescription Drug Benefit

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) created Medicare Part D, Medicare's outpatient prescription drug benefit, which goes into effect on January 1, 2006. All Medicare beneficiaries will be affected by this new coverage, even if it is only to decide they don't wish to participate.

The MMA established a competitive market approach for Part D by mandating that it be managed by private prescription drug plans, or PDPs. Central to this arrangement is that each PDP will negotiate contracts with pharmaceutical companies for medications. By law the federal government will not be involved in the setting of prices or negotiations with manufacturers for pricing or rebates. The PDP will receive a set, or capitated, payment from Medicare for each patient enrolled in its plan. For administrative purposes the country has been divided into 34 PDP regions, and within each region there must be at least two PDPs for beneficiaries to choose from. As of mid-May over 300 entities had applied to serve as PDPs.

There are several key administrative elements of the benefit that have the potential for being problematic: how patients will be enrolled in the benefit, how the transition to the new benefit will ensure continuity of care, what medications will be contained in the formulary a plan will offer, and what strategies will be used to manage the selected formulary.

Enrollment
Enrollment is set to begin on November 15, 2005. All Medicare beneficiaries who choose to enroll in Part D (other than those who are dually eligible for Medicaid as well as Medicare) will be able to select the PDP in their region they deem best able to provide the medications they will need by going to the CMS Website or phoning CMS. For this to work, by November 15, CMS will have an easily accessible listing of all participating PDPs for each region, the details of the formularies they are offering, and the monthly premiums they will charge. CMS is promising to have all of this information posted in October 2005. Because of the complexities of formularies and how they will be administered, i.e., which drugs will be preferred and which will require prior authorization or be subject to fail-first or other pharmacy benefit management techniques, the process of selecting an appropriate PDP may prove very daunting, and patients will undoubtedly turn to their physicians for assistance in interpreting the information made available to them. To make an intelligent choice about whether to participate in the program at all, Medicare beneficiaries who currently have prescription coverage from another source are supposed to receive a notice from their insurance provider that informs them whether their current policy covers as much or more than the Medicare prescription drug plan. It is unclear how this comparison will be made since there are so many factors, including the specific drugs the beneficiary takes or may take in the future and the drugs' status under the various plans.

Dual eligible beneficiaries will not have to make a decision about enrolling in the new program. These patients, who currently receive their medications through their state's Medicaid program, will be automatically enrolled in one of the PDPs with the lowest premiums in their region beginning in late October 2005. Although they have the right to switch from the plan to which they've been assigned to another plan with an equivalent premium prior to January 1, 2006, many patient advocates have expressed grave concerns about the complexity of the enrollment process and the problems they see arising from the transition to Medicare coverage.

The automatic enrollment process is not designed to march beneficiaries with the optimal coverage for them as individuals, and these patients will not have the resources available to them to access other plans that would provide better coverage. The problem is who could actually facilitate this selection process for a class of patients who are cognitively impaired. It is unclear how an informed selection of a plan (i.e., in the best interests of the patient) can be made prior to the cessation of Medicaid coverage. All concerned (e.g., state mental health authorities, community providers, individual practitioners, and consumer advocates) need to be thinking ahead about how to effectively communicate accurate information to people with mental illness and their representatives and how to assist them in making the best choices.

Administrative Burden
There can be no question that the implementation of Part D will present new challenges to psychiatrists and other mental health practitioners and that the administrative burden created will be large. The model established by law to deliver the Medicare prescription drug benefit is extremely complex and will be implemented over a very short span of time - less than two months. If the transition to this program is to be successful, it is vital that all the providers involved in the care of the patients who will be shifting to Part D coverage must be actively involved in helping their patients analyze the information available to them so they can make the right decisions.

After patients have completed the process of selecting a PDP, psychiatrists will face the chore of learning to navigate new sets of rules for getting their patients access to the medications they require. Although the appeals process for overturning negative PDP decisions is regulated by CMS, each plan will not doubt have its own way of doing business that will have to be accommodated

Among the questions practitioners will need to answer are:

• What drugs are on the formulary?
• What are the relevant drug utilization management (DUM) issues for particular drugs?
• How can drugs not on the formulary be accessed?
• What kind of documentation is necessary for off-label use of drugs?

As a community, it will be critical for us to have the information and resources to ensure that every patient who will be receiving the new benefit will understand the implications and make an appropriate choice of plan. In any case, the complexities of the law and the challenges of transition will require an unprecedented sophistication of response from the advocacy community.

The following websites provide information for beneficiaries of Part D: www.medicare.gov, www.cms.hhs.gov/partnerships/calendar/BeneficiaryCalendar.pdf (this CMS site has a timeline) and www.nmha.org/federal/MedicarePrescriptionDrugBenefit.cfm (the National Mental Health Association). Starting in July 2005, the APA's Office of Healthcare Systems and Financing will be undertaking an educational project specifically directed toward preparing APA members for the transition to Medicare Part D. If you have questions you would like answered, please contact Karen Sanders or Irvin "Sam" Muszynski or call the APA's Managed Care Help Line at 800-343-4671.

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