More Incentives Needed for Medicare Formulary Decisions

Researchers in a recent study found that Medicare Prescription Drug Plans (PDP) need more incentives to align with long-term outcomes and costs associated with both medical and pharmacy benefits (LTOCMP).

In traditional fee-for-service Medicare, PDPs cover Part D pharmacy benefits. Many enrollees switch plans frequently to save money and have additional options in other plans. The fragmentation of pharmacy and medical benefits while only considering short-term outcomes can potentially create reverse incentives for patient outcomes, according to a study published by the Journal of Managed Care & Specialty Pharmacy.

In the study, researchers used information from various databases to search for quality measures, payment models, and public reporting tools. The researchers found there were no quality measures directly related to formulary decisions for Medicare PDPs, but found there were 7 indirectly related, a majority of which deal with the underuse of medication.

Researchers also did not find any payment models that were related directly or indirectly to formulary decisions for Medicare PDPs. They found that Medicare Part D star ratings and the Medicare Plan Finder website were the 2 tools that are indirectly related.

However, the researchers found that URAC accreditation, which accredits various organizations such as pharmacy benefit managers (PBM), was the only quality measure that could potentially be involved in formularies. Overall, researchers found there were a small number of quality measures, standards, and tools related to the formulary decision process used as incentives for PDPs to consider LTOCMP.

The study suggests that Medicare Part D star ratings, the Medicare Plan Finder, and URAC PBM accreditation have the potential to become incentives for LTOCMP. Incentives regarding coverage, tier placement, cost sharing, and use of prior authorization, quantity limits, and step therapy are not currently in use.

More incentives could potentially lead to better healthcare and lower costs, the study concluded.