The Medicare Prescription Drug Benefit Program Medicare Part D P & T Committee Meeting Virginia Department of Medical Assistance Services August 31, 2005

Medicare Prescription Drug Benefit Help with premiums or deductibles for those with limited means Choice of at least two drug plans in each region Available to those living in nursing facilities Required for those who have both full Medicaid and Medicare benefits

Medicare Prescription Drug Coverage Available for all people with Medicare Coverage begins January 1, 2006 Provided through: –Prescription drug plans (PDPs) –Medicare Advantage Plans (MA-PDs) –Some employers and unions to retirees Most enrollees will have cost sharing obligations; subsidies available for low- income individuals

PDP and PPO Regional Plans RegionPDPPPO FiveDE, DC, MDDE, DC, MD SixPA, WVPA, WV SevenVAVA, NC

Medicare Prescription Drug Plans Must offer basic drug benefit May offer supplemental benefits Can be flexible in benefit design Must follow marketing guidelines

Standard Prescription Drug Coverage under Part D $32 average monthly premium $250 deductible Up to $2,250: Beneficiary pays 25% drug costs and Medicare pays 75% drug costs Between $2,250 and $5,100: Beneficiary pays 100% drug costs (coverage gap) After $3,600 in out-of-pocket spending: Medicare pays approximately 95% and beneficiary pays greater of $2/$5 copay or 5% coinsurance

What Payments Count Towards True Out of Pocket (TrOOP) In addition to the beneficiary, payments counting towards TrOOP may be made by: –Another individual (e.g., a family member of friend) –A bona fide charity, or –A Personal Health Savings Vehicle, Flexible Spending Account, Health Savings Accounts, and Medical Savings Accounts

Eligibility and Enrollment Entitled to Part A and/or enrolled in Part B Reside in plan’s service area Must enroll in a Medicare prescription drug plan to get Medicare prescription drug coverage

Enrollment Periods In general, the enrollment periods for PDPs and MA-PDs are similar There are three enrollment periods for PDPs –Initial Enrollment Period (IEP) 11/15/05 – 5/15/06; then similar to Part B IEP –Annual Coordinated Election Period (AEP) 11/15 – 12/31 each year thereafter –Special Enrollment Period (SEP)

Postponing Enrollment Higher premiums for people who wait to enroll –Exception for those with prescription drug coverage at least as good as a Medicare prescription drug plan Assessed 1% of base premium for every month –Eligible to enroll in a Medicare prescription drug plan but not enrolled –No drug coverage as good as a Medicare prescription drug coverage for 63 consecutive days or longer

Possible Examples of Coverage at Least as Good as Medicare Part D * Coverage under a PDP or MA-PD Some Group Health Plans (GHP) VA coverage Military coverage including TRICARE *The source of the current drug coverage is required to send a notice advising if coverage is at least as good as Medicare Part D.

Enrolling in a Plan Medicare & You 2006 handbook –Prescription drug plans available in the area Contact the plan to enroll Help choosing a plan: –Visit and get personalized informationwww.medicare.gov –Call MEDICARE TTY users should call –Call the local AAA/VICAP

Auto-Enrollment Medicaid prescription drug coverage for full-benefit dual eligibles ends 12/31/005 Full-benefit dual eligibles who do not enroll in a plan by 12/31/05 –CMS will enroll them in a prescription drug plan with a premium covered by the low-income premium assistance –Their Medicare prescription drug coverage will begin 1/1/06 Full-benefit dual eligibles can change plans any time

Facilitated Enrollment CMS is facilitating the enrollment –Of additional people with Medicare if they do not choose a plan by May 15, 2006 –These include people who are QMBs, SLMBs, QIs, SSI-only, and those who apply and are determined eligible for the extra help –Coverage effective June 1, 2006

Extra Help for Beneficiaries < 150% FPL Group 1 –Full-benefit dual eligibles with incomes at or below 100% of Federal poverty level (FPL) Group 2 –Full-benefit dual eligibles above 100% of FPL; QMB, SLMB, QI, SSI-only, or non-dual eligible beneficiaries with incomes below 135% FPL and limited resources ($6,000 per individual and $9,000 married couple) Group 3 –Beneficiaries with incomes below 150% FPL and limited resources ($10,000 individual and $20,000 married couple)

Extra Help Group 1Group 2Group 3 Premium $32/month $0 Sliding scale based on income Deductible $250/year $0 $50 Coinsurance up to $3,600 out of pocket $1/$3 copay $2/$5 copay 15% coinsurance Catastrophic 5% or $2/$5 copay $0 $2/$5 copay

How Can Persons Find Out If They Qualify For “Extra Help?” Medicare beneficiaries apply to the Social Security Administration (SSA) –Scannable application (mail or in-person) –Calling SSA toll-free ( ) –Over the internet ( “Qualifier Tool” Local DSS assist with application and will determine eligibility if the applicant insists

Medicare Prescription Drug Coverage Available only by prescription Prescription drugs, biologicals, insulin Medical supplies associated with injection of insulin Brand name and generic drugs will be in each formulary Drugs not covered: –Drugs excluded by MMA law –Non-prescription drugs –Drugs that are covered for a person under Medicare Part A or Part B

Excluded Drugs Drugs for –Anorexia, weight loss, or weight gain –Fertility –Cosmetic purposes or hair growth –Symptomatic relief of cough and colds Prescription vitamins and mineral products –Except prenatal vitamins and fluoride preparations Over the Counter Barbiturates Benzodiazepines

Formulary PDPs and MA-PDs may have a formulary Tiered Formularies - Preferred Drug Levels CMS will ensure formularies do not discourage enrollment among certain groups of people CMS will approve formularies and the therapeutic categories upon which the formulary is based in advance for plans to complete their bid

Formulary Requirements Provide 60 day notice to enrollees when drug is removed or cost-sharing changes Include multiple drugs in each class (at least two – more in certain circumstances) Be developed and reviewed by Pharmacy and therapeutic (P&T) committee consistent with widely used industry best practices –Majority of committee members must be practicing physicians and/or practicing pharmacists

Formulary Requirements Must include all or substantially all drugs in six categories: –Antipsychotic –Antidepressant –Anticonvulsant –Anticancer –Immunosuppressant –HIV/AIDS Issues: –Extended release and varied dosages –Exclude either escitalopram or citalopram

Retail Pharmacy Access Home Infusion Pharmacy Access Long-Term Care Pharmacy Access Any Willing Pharmacy Requirements Preferred and Non-Preferred Pharmacies Network Pharmacy Access

Other Pharmacy Requirements Plans must allow enrollees to receive 90-day supply of covered Part D drugs at retail pharmacy Enrollee is responsible for any higher cost- sharing that applies at a retail pharmacy vs. a mail-order pharmacy Plans must ensure access to out of network pharmacies Beneficiary will pay out-of-network pharmacy U&C price

For More Information Visit Visit Visit or or SSA-1213www.ssa.gov Publications such as: –Medicare & You 2006 handbook –Facts About Medicare Prescription Drug Plans MEDICARE VICAP–

Administrative/Operational Implications for Virginia Local Departments of Social Services (LDSSs) have significant new responsibilities related to “Extra Help” program There are also implications for DMAS: –Assist transition of “dual eligibles” to Part D –Provide monthly data to federal government –Handle increased telephone inquiries from “duals” –Provide “coordination of benefits” information –Conduct additional appeal hearings related to “extra help” determinations

States Must Pay A Significant Portion of The Part D Drug Benefit Phased-Down State Contribution “Clawback” –States are required to help finance Medicare Part D by paying the federal government the state share of the cost of prescription drug coverage for “dual eligibles” –State share is set at 90% of costs for 2006 and decreases to 75% by 2015