Health Reform WK-EDGE Rate of Part D plan drug inclusion for dual eligible remains high
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Wednesday, July 18, 2018

Rate of Part D plan drug inclusion for dual eligible remains high

By Jeffrey H. Brochin, J.D.

An OIG review of Part D prescription drug plans has determined that the rate of Part D plan formularies’ inclusion of the drugs commonly used by dual eligibles is high, but with some variation. Due to the fact that some variation exists in formularies’ inclusion and utilization management of these drugs, some dual eligibles may need to make additional efforts to access the drugs they take (OIG Report, No. OEI-05-18-00240, June 21, 2018).

MMA and prescription drug coverage. Pursuant to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), comprehensive prescription drug coverage under Medicare Part D became available to all Medicare beneficiaries through prescription drug plans (PDPs) and Medicare Advantage prescription drug plans (MA-PDs). For beneficiaries who are eligible for both Medicare and Medicaid ("dual eligible"), Medicare covers Part D plan premiums, deductibles, and other cost-sharing up to a determined premium benchmark that varies by region.

Part D plan formularies. To control costs and ensure the safe use of drugs, the 3,476 Part D plans operating in 2018 are allowed to establish formularies from which they may omit drugs from prescription coverage, and they are allowed to control drug utilization through utilization management tools which include prior authorization, quantity limits, and step therapy. As mandated by the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), CMS annually reviews Part D plan formularies to ensure that they include a range of drugs in a broad distribution of therapeutic categories or classes, and CMS assesses the utilization management tools present in each formulary.

Why the OIG conducted the review. The ACA requires the OIG to conduct a study of the extent to which formularies used by Medicare Part D plans include drugs commonly used by full-benefit dual-eligible individuals. The ACA also require the OIG to issue an annual report with recommendations as appropriate. This is the eighth report the OIG has produced in order to comply with this mandate.

How the OIG conducted the review. The OIG examined whether the 386 unique formularies used by the 3,476 Part D plans operating in 2018 cover the 200 drugs most commonly used by dual eligibles. The OIG also determined the extent to which formularies applied utilization management tools to those commonly used drugs. To create the list of the 200 drugs most commonly used by dual eligibles, the OIG used data from the 2013 Medicare Current Beneficiary Survey—the most recent data available at the time of the latest study. Of the top 200 drugs, 197 are eligible for Part D prescription drug coverage, two are excluded from coverage, and one is a Part D covered medical supply item.

Review findings. The OIG review found that inclusion rates for the 197 drugs commonly used by dual eligible are largely unchanged compared with the inclusion rates listed in previous reports. Part D formularies include roughly the same high percentage of these commonly used drugs in 2018 as they did in 2017, and the results are also basically unchanged from the findings reached from 2011 through 2016.

Review Recommendations. Due to variations which exist among formularies’ as to inclusion and utilization management of these drugs, some dual eligibles may need to make additional efforts to access the drugs they take, by, for example, choosing to appeal prescription drug coverage decisions, switching prescription drugs, or switching Part D plans. The OIG will continue to monitor and produce annual reports on the extent to which Part D plan formularies cover drugs that dual eligibles commonly use. In addition, the OIG will continue to monitor Part D plan formularies’ application of utilization management tools to these drugs. Aside from this, the OIG has no recommendations at this time.

ReportsLetters: OIGReports AccessNews AgencyNews DrugNews DualEligibleNews EnrollmentNews MedicarePartCNews MedicarePartDNews ProgramIntegrityNews

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