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State Responses to Medicare Part D. Presented by: Kimberley Fox, Senior Policy Analyst, Institute for Health Policy Academy Health Annual Research Meeting Seattle, WA June 2006. Survey Methods. Funded by the National Pharmaceutical Council Literature and document review

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State Responses to Medicare Part D

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State responses to medicare part d

State Responses to Medicare Part D

Presented by:

Kimberley Fox,

Senior Policy Analyst,

Institute for Health Policy

Academy Health Annual Research Meeting

Seattle, WA

June 2006


Survey methods

Survey Methods

  • Funded by the National Pharmaceutical Council

  • Literature and document review

  • Fall 2005 survey w/ telephone follow-up

    • Snapshot of states’ plans for adapting programs to MMA

    • 24 existing SPAP programs

    • 14 Medicaid agencies (representing 66% of Medicaid drug spend), 11 in states with SPAPs.

    • Response rate: @96%

    • Findings reflect responses at time of survey completion.

Muskie School of Public Service


State responsibilities options under part d

State Responsibilities/Options Under Part D

Medicaid

  • Assist w/ transitioning duals

  • Clawback payments

  • LIS application and MSP screening responsibilities.

  • May fill Part D gaps with state-only dollars

    State Pharmacy Assistance Programs (SPAP)

  • May fill Part D gaps

  • Qualified SPAP expenditures count toward TROOP

  • Part D plans must coordinate

  • Transitional grant funding available

Muskie School of Public Service


Key differences between part d and state pharmacy coverage

Key Differences between Part D and State Pharmacy Coverage

Medicaid

  • May face higher copayments

  • Loss of guaranteed access if they can’t afford copayments

  • No coverage of excluded drugs under Part D

  • Formularies may not include drugs covered under Medicaid

  • Loss of coverage of denied drugs during appeal

  • More limited pharmacy networks.

    State Pharmacy Assistance Programs (SPAPs)

  • Tighter formularies/ more limited pharmacy networks

  • LIS eligible – potentially lower cost-sharing

  • Non-LIS eligible –

    • Up-front costs such as premiums and deductibles previously not required in many programs

    • Higher cost-sharing before and in the donut hole (varies by state).

Muskie School of Public Service


Part d transitional enrollment issues for spap enrollees and duals

Part D Transitional Enrollment Issues for SPAP Enrollees and Duals

  • Duals

    • Medicaid drug coverage ends Jan 2006

    • All duals ‘deemed eligible’ for low income subsidies

    • Randomly assigned to below benchmark PDPs by CMS – Nov 2005

    • State Medicaid agencies can conduct formulary matches to recommend more appropriate plans.

  • SPAP Enrollees

    • Most not deemed eligible for LIS, must apply (exc. MSPs)

    • All enrollees must voluntarily enroll in PDP/MA-PD

    • Qualified SPAPs cannot auto-enroll enrollees into a preferred plan

    • Various options to ‘facilitate’ LIS application/Part D enrollment

Muskie School of Public Service


Spap and medicaid part d gap filling options

SPAP and Medicaid Part D Gap-filling Options

  • Medicaid

    • Premium assistance above LIS benchmark

    • Copayments

    • Off-formulary/PDP denied drugs or during appeals

    • Non-Part D covered drugs (eligible for FFP)

  • SPAP

    • Premium assistance (LIS or full premium)

    • Wrap around full/partial LIS or non-LIS out-of-pocket costs

      • Deductibles, copayments, donut hole,

      • Off-formulary/PDP denied drugs or out-of-network pharmacies

      • Non-Part D covered drugs

Muskie School of Public Service


Filling part d gaps for duals selected medicaid plans 2006

Filling Part D Gaps for Duals: Selected Medicaid Plans 2006

NY

NY

NJ

NJ

NY,NJ

NY,NJ

NJ

NJ

Source: Part D Survey of SPAP and Medicaid Directors, Fall 2005.

Muskie School of Public Service


Medicaid transition plans for part d enrollment 2005

Medicaid Transition Plans for Part D Enrollment, 2005

Source: Part D Survey of SPAP and Medicaid Directors, Fall 2005.

Muskie School of Public Service


Spap plans once part d begins 2006

SPAP Plans Once Part D Begins, 2006

Muskie School of Public Service


Specific part d gaps filled by spaps 2006

Specific Part D Gaps Filled by SPAPs, 2006

Source: Part D Survey of SPAP and Medicaid Directors, Fall 2005.

Muskie School of Public Service


More than half of spap enrollees will not qualify for full lis n 26 programs 23 states

More than Half of SPAP Enrollees Will Not Qualify for Full LIS*N=26 programs/23 states

*Percentages based on estimates by state officials from income data, generally do not include assets.

Source: Part D Survey of SPAP and Medicaid Directors, Fall 2005.

Muskie School of Public Service


Spap efforts to enroll members in lis 2005

SPAP Efforts to Enroll Members in LIS, 2005

N=17

*For LIS and/or Part D Enrollment

Source: Part D Survey of SPAP and Medicaid Directors, Fall 2005.

Muskie School of Public Service


Spap efforts to enroll members in part d plans 2005

SPAP Efforts to Enroll Members in Part D Plans, 2005

N=17

*For LIS and/or Part D Enrollment

Source: Part D Survey of SPAP and Medicaid Directors, Fall 2005.

Muskie School of Public Service


Few states expanding spaps to new groups

Few States Expanding SPAPs to New Groups

Source: Part D Survey of SPAP and Medicaid Directors, Fall 2005.

Muskie School of Public Service


Summary of state actions

Summary of State Actions

  • Short-term emergency coverage (Medicaid/ some SPAPs)

  • Medicaid largely not filling Part D gaps for duals over time, except Part D excluded drugs.

  • SPAPs holding existing enrollees harmless, but not expanding benefits/eligibility

    • Only a few states starting new SPAPs

  • States generally exercising caution… wait and see approach.

Muskie School of Public Service


Policy implications discussion

Policy Implications/ Discussion

  • Differences in State D-Gap plans for duals and SPAP enrollees

    • Larger cost-sharing differences for non-LIS SPAP enrollees relative to prior coverage than for duals.

    • Large potential savings to SPAP as secondary payer; little savings and potential short-term losses from the clawback for Medicaid.

  • Formularies – to wrap or not to wrap.

    • Don’t want to encourage Part D plans to limit formularies to narrowest possible standard

    • Adverse effects from reduced drug coverage as a result of restricted formularies may result in more cost to the state if that leads to use of more expensive medical services.

    • States may want to reserve the right to cover in limited circumstances where likelihood of adverse events is higher. At minimum, could help duals appeal.

    • Reconsideration of federal match (?)

  • SPAPs Can Do More to Maximize SPAP Savings allowing them to potentially fill more gaps or expand eligibility.

  • Monitor state coverage decisions on duals and SPAP enrollees.

Muskie School of Public Service


Further information

Further Information

  • For copies of this presentation:

    • kfox@usm.maine.edu

  • Full report of survey findings available at:

    http://muskie.usm.maine.edu/m_view_publication.jsp?id=3409

Muskie School of Public Service


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