Medicare Part D Drug Plans: Counseling With a Moving Target

Patients are likely to be confused by the various Medicare prescription drug plans available to them as well as the year-to-year coverage changes, but the basics are reasonably straightforward.

Medicare Part D: Just when you thought you knew the ins-and-outs of this program, along came the Affordable Care Act (ACA) to usher in some subtle changes!

Created in 2003, Medicare Part D was designed to help the ever-growing number of Medicare beneficiaries deal with prescription drug costs. The basics, if you take the time to understand them, are reasonably straightforward:

• Patients covered by the standard Part D coverage pay for prescriptions out of pocket until they reach the initial $325 deductible amount.
• After they reach the deductible, patients pay 25% of prescription drug costs, and Medicare part D pays the remainder until the patient and the patient’s prescription drug plan have contributed a combined $2970.
• At this point, the patient enters the Medicare Part D coverage gap. In this gap, commonly called the “donut hole,” patients pay a larger portion of costs out of pocket until they reach a total of $4750 in costs. When patients are in the “donut hole,” manufacturers discount their brand-name drugs 50%, but patients get credit for paying their full cost.
• Once patients exceed $4750 in out-of-pocket costs, patients enter catastrophic coverage and are responsible for only 5% of prescription drug costs, with Medicare paying for the rest.
• As people become eligible for Medicare, they can choose a prescription drug plan to supplement their standard Part A and Part B coverage. Or, they can choose Medicare Advantage coverage, also called Medicare Part C, combining all their health care coverage in a single policy.

Simple, yes? The situation only gets more complicated if the Medicare beneficiary is a dual eligible (covered by Medicare and Medicaid), has been approved for Special Help from Medicare, is in a retiree plan, or falls into any other category of exception. To navigate Medicare and Medicaid reimbursement processes for prescription medications as a pharmacist, you need an excellent software vendor who has a flexible program, updates software often, and provides exemplary customer service. More information is available at http://www.cms.gov/Outreach-and-Education/Outreach/Partnerships/downloads/11522-P.pdf.

Since we’ve passed the mid-year point, we—and our technology vendors—need to be looking forward to 2014, when some changes will go into effect. The deductible will fall to $310. Beneficiaries will enter the coverage gap when their spending combined with that of their prescription drug plan reaches $2850. This entry point is $120 lower than the 2013 threshold, so patients will hit the “donut hole” sooner. Many seniors will be surprised or confused, especially since the ACA is gradually closing the coverage gap so it disappears in 2020.

The coverage gap entry point is unrelated to the ACA. CMS determines it using a formula tied to per-capita total Part D drug expenses, which declined 4% last year. The ACA, however, determines the out-of-pocket maximum. It will decrease by $200 in 2014 to $4550. In sum, the coverage gap will shrink by $80.

But let’s return to a key concern for community pharmacists: Patients find Medicare Part D confusing. Recent well-publicized reports from CMS indicate that “prices are sometimes higher in certain preferred networks,” compared with traditional plans that offer patients greater choice, and because enrollment in such plans has increased, “the impact of higher preferred network prices on the program as a whole is likely to become increasingly significant.” Patients, understandably, may be confused by the choices they need to make and may turn to their pharmacists for help.

A patient’s choice of Medicare Part D plans depends on their location, and a suitable plan must be chosen based on the patient’s individual drug regimen. Medicare's official website features an online service called the Prescription Drug Plan Finder to help patients choose a plan. Despite the tool’s simplicity, many beneficiaries have trouble using it. Patients who are not computer savvy can also call Medicare at 1-800-MEDICARE (800-633-4227).

When beneficiaries ask for help, pharmacists should keep the following points in mind:

• Beneficiaries may change drug plans once every 12 months for any reason.
• CMS allows open enrollment from October to December.
• As of 2014, CMS will not allow automatic refills for its beneficiaries.
• Work with and understand your software vendor’s approach to Medicare Part D and the vendor’s capabilities. Be familiar with which plans your pharmacy can handle so you’ll be able to answer immediately when beneficiaries ask if they can use your pharmacy with specific plans.
• Do not focus solely on cost. Make sure patients look beyond drug coverage to be sure all of their health concerns will be taken care of. Remind patients who travel or winter-over in warm climates that a national plan is a better choice and encourage those who dislike mail-order restrictions to find a plan that offers the option of using community pharmacies, even if it costs more.
• Do not recommend a specific prescription drug plan to a Medicare beneficiary—it’s against the law! Instead, provide as much accurate, unbiased information as possible and help patients apply their selection criteria to the plans available to them.
• Be prepared to supplement Plan Finder results with information about how the prescription drug plans operate and printed information about specific plans from the Internet. You can also discuss other beneficiaries’ experiences with specific plans if you are aware of them.

Consider joining CMS’s Pharmaceutical, Pharmacy, and Device Manufacturers Open Door Forums, which address practicing pharmacists’ concerns regarding serving Medicare and Medicaid beneficiaries. In addition, CMS’s Medicare Learning Network provides online training, education, and information for health care professionals.

Ms. Wick is a visiting professor at the University of Connecticut School of Pharmacy and a freelance writer from Virginia.