Basic Reimbursement
-Medicare Part D Specifics
60889-R8-V1
Discussion Topics
•
Medicare Part D Basics
•
Eligibility for Medicare Part D
•
Stand-alone Prescription Drug Plans (PDP) vs. Medicare
Advantage Prescription Drug Plans (MA-PD)
•
Enrollment periods
•
Navigating Part D drug utilization
•
Part D exceptions
•
Part D Low Income Subsidy (LIS)
•
Understanding State Pharmacy Assistance Programs
Inception of Medicare Part D
Medicare Prescription Drug,
Improvement, and
Modernization Act of 2003
(MMA)
1
• Benefits began January 1, 2006
Provides Medicare
beneficiaries with optional
prescription drug coverage
• Oral medications
• Self-administered
• Physician administered if not covered
under Medicare Part A or B
Offered Through Two Types of Plans
Traditional Medicare
Part A and B
Stand-Alone Part D Plan
Elect
Medicare
Advantage
(Part C)
Medicare
health plans
that include
Medicare
prescription
drug coverage
Stand-alone Prescription Drug
Plans (PDP)
Medicare Advantage Drug Plans
(MA-PD)
1. Centers for Medicare and Medicaid Services (CMS), Medicare Program; Medicare Prescription Drug Benefit.
Eligibility For Medicare Part D
1
General Medicare
Eligibility
• People Age 65+
• People under age 65 with
certain disabilities
• People of all ages diagnosed
with End-Stage Renal
Disease (ESRD)
To enroll in a PDP
• Beneficiary must have Medicare
Part A or B
To enroll in a MA-PD
• Beneficiary must have both
Medicare Part A and B
Beneficiary Enrollment Periods for Medicare
Part D
1
• The IEP occurs during the 7 months surrounding Medicare eligibility
Initial Enrollment
Period (IEP)
• Between October 15 – December 7 each year
• Coverage effective January 1 of the next calendar year
Medicare Open
Enrollment Period
• Periods outside of the usual IEP and Medicare Open Enrollment Period when
an individual may elect a plan or change his or her current plan election
• There are various types of SEPs
Special Enrollment
Periods (SEP)
• Between January 1 – February 14 each year
• Individuals can switch from Medicare Advantage plans to Original Medicare
• Those who switch to Original Medicare during this period have until February
14 to join Medicare Prescription Drug Plan to add drug coverage
Medicare
Advantage
Dis-Enrollment Period
How to Enroll in a Part D Plan
Through a Part D plan
sponsor website
• Go to plan sponsor website
• Follow instructions for
enrolling into selected plan
Through the Medicare
Part D plan Finder Tool
• www.Medicare.gov
• Select “enroll now” to be
re-directed to plan sponsor
website
Certain Low-income
beneficiaries are
auto-enrolled into a Part D
plan
2013 Part D Overview and Coverage
1
Initial coverage limit
$2,970
Coverage gap program
provides
52.5%
discount
(max of $1,975.97)
on brand
name drugs through the
coverage gap
50% of Costs
Paid
by Insurer
($2,113)
Beneficiary pays 25%
co-insurance
($661.25)
Coverage gap ends and
catastrophic coverage
begins at
$6,954.52
in total drug spend
Beneficiary pays
$325
deductible
5% cost sharing through
catastrophic coverage
(beneficiary has paid
$4,750
out-of-pocket to reach
catastrophic coverage
)
75% Paid by Insurer
($1,983.75)
Catastrophic
Coverage
Insurer & Medicare pay
95% of costs
2013
Low-income subsidy enrollees do not have
“doughnut hole” in benefit
Beneficiary pays
47.5% (max
of $1,787.79)
in Rx spending
on brand drugs through the
doughnut hole (100% counts
toward catastrophic coverage)
Insurer paid
Beneficiary paid
Manufacturer paid
Coverage
Gap
(Doughnut
Hole)
1. CMS. Advance Notice of Methodological Changes for Calendar Year 2013 for MA Capitation Rates, Part C and Part D Payment Policies and 2013 Call Letter.
Key Medicare Part D Reforms
1
Rebate to beneficiaries in coverage gap in 2010
• The federal government provided a one-time $250 rebate for all Medicare Part D beneficiaries that
had out of pocket spending in the coverage gap (“doughnut hole”)
Manufacturer discount on brand drugs in the coverage gap through
2020
• Manufacturers will provide 50% discounts (off the negotiated price) for all brand name drugs provided
to Part D beneficiaries in the coverage gap in 2013 and will provide the discount every year until 2020
Phase out of the coverage gap by 2020
• Using a phased approach, the coverage gap provision of Medicare Part D will be closed
• Manufacturers will continue to provide a discount on brand drugs
• Between now and 2020, plans will also increase their benefits for both generic and brand drugs;
ultimately, beneficiaries will be responsible for 25% coinsurance for both brand and generic drugs
(until catastrophic coverage is reached)
Indentifying Type of Part D Coverage
1
Standard Medicare Prescription
Drug ID Card
• Stand-alone PDP plans generally have an ID
format of
SXXXX-XXX
• MA-PD plans generally have an ID format of
HXXXX-XXX
Understanding Part D Exceptions
Tier Exceptions
1• Permits enrollees to obtain a non-preferred drug
in a preferred tier:
• Written and/or oral request must state why a
tier request is being requested
• Request must state why other products have
failed, or specific concern over adverse
reactions
• 24 hours (expedited requests) or 72 hours
(standard requests)
Formulary Exceptions
1• Allows enrollees to gain access to Part D drugs
not included on its formulary:
• Written and/or oral request must state why the
formulary request is being requested
• Request must state that the non-formulary
drug is necessary for treating an enrollee's
condition because all covered Part D drugs on
any tier would not be as effective or would
have adverse effects, the number of doses
under a dose restriction has been or is likely to
be ineffective, or the alternative listed on the
formulary or required to be used in accordance
with step therapy has been or is likely to be
ineffective.
• 24 hours (expedited requests) or 72 hours
(standard requests)
1.CMS, Medicare Prescription Drug Benefit Manual - Exceptions. http://www.cms.gov/Medicare/Appeals-and-Grievances/MedPrescriptDrugApplGriev/Exceptions.html. Accessed October 25, 2012.
Extra Help for Low-Income Part D
Beneficiaries
Part D Low
Income
Subsidy
(LIS)
Extra help in
paying for Part
2013 Part D Low-Income Subsidy (LIS)
1
Income
≤100% FPL
<135% FPL
<150% FPL
Standard
Asset Test
2None
$6,940 single
$10,410 couple
$11,570 single
$23,120 couple
None
Premium
3Fully subsidized
Fully subsidized
Sliding scale
$30
Deductible
Fully subsidized
Fully subsidized
$66
$325
Patient
co-pay/
coinsurance
$1.15 generic
$3.50 brand
$2.65 generic
$6.60 brand
15% up to catastrophic limit
25% up to $661.25 in drug
expense
Gap in
Coverage
None
None
None
47.5% between $2,970 and
$6,954.52 in drug expense
Catastrophic
Coverage
No cost sharing
No cost sharing
$2.65 generic
$6.60 brand copay above
limit
5% after $4,750 in OOP
1. 2013 Medicare Part D Call Letter. http://www.cms.gov/Medicare/Health-Plans/HealthPlansGenInfo/Downloads/2013-Call-Letter.pdf. Accessed October 25, 2012.
2. CMS. 2012 Resource and Cost-Sharing Limits for Low-Income Subsidy (LIS). http://www.ncoa.org/assets/files/pdf/center-for-benefits/part-d-lis-cms-memo-2012-asset-levels.pdf. Accessed October 25, 2012.
By Phone
1-800-772-1213
TTY 1-800-325-0778
Online
www.socialsecurity.gov
In-person at a Social
Security field office
Contact the state
Medicaid office
Four Ways to Apply
Understanding State Pharmaceutical
Assistance Programs (SPAP)
1
•
S
tate Pharmacy Assistance Programs (SPAP) are state-funded
programs that pay a portion of prescription costs for eligible enrollees.
SPAPs also include subsidies and discount programs for eligible seniors
Eligibility requirements include:
–
Low-income and medically needy seniors
–
Persons with disabilities who do not qualify for Medicaid
•
Discount programs generally rely on the large-volume purchasing power
of the state to negotiate a sizable discounts on a wide selection of
prescription products
•
Third party charitable organizations may also be available to assist
qualifying patients with prescription costs
1. IHS. State Pharmacy Assistance Programs MMA Final Rule Fact Sheet.
