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Medicare Part D. Elena Chan PharmD candidate, UCSF Tiffany Jew PharmD, MBA candidate, USC. Overview. Background on Medicare The MMA Medicare Part D Enrollment/Eligibility Coverage Benefit Design Formulary Coordination of Care Medication Therapy Management. Background on Medicare.

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medicare part d

Medicare Part D

Elena Chan PharmD candidate, UCSF

Tiffany Jew PharmD, MBA candidate, USC

  • Background on Medicare
  • The MMA
  • Medicare Part D
    • Enrollment/Eligibility
    • Coverage
    • Benefit Design
    • Formulary
    • Coordination of Care
  • Medication Therapy Management
background on medicare
Background on Medicare
  • Medicare is health insurance for Americans:
    • 65 years or older
    • Younger than 65 with disabilities or end-stage renal disease
  • 2 types of Medicare Coverage:
    • Original Medicare Plan
    • Medicare Advantage
original medicare plan
Original Medicare Plan

Medicare Part D

Prescription Drug Plan



  • Automatically enrolled in original plan unless you enroll in Medicare Advantage
  • Fee for service plan -- just present your Medicare card
  • Monthly premiums for Part A+B depends on income and if you paid Medicare taxes:
    • Part A premium usually $0
    • Part B premium no more than $161/month
medicare advantage
Medicare Advantage

Medicare Part D

Prescription Drug Plan


  • Provide the same Part A and Part B coverage but may have extra benefits like dental, eye, or prescription drug plans
  • Premiums differ by plan
  • Have to stay “in network” as determined by HMO or PPO
medicare modernization act mma
Medicare Modernization Act (MMA)
  • Signed into law Dec 2003
  • “Medicare Part D” was added
    • Voluntary out-patient prescription drug plan to begin Jan 2006
    • Can be added to Medicare (original and Advantage)
part a coverage
Part A Coverage
  • Inpatient/hospital charges
  • “Medically necessary” - anything needed to diagnose or treat a condition
  • Critical care
  • SNF’s, but not LTC
  • Home health
  • Hospice
  • Blood
part b coverage
Part B Coverage
  • Ambulatory/Outpatient Care
  • Medically necessary
  • Ambulance, blood, am care surg, lab tests, MD services, DME, ER, dialysis, mental health
  • Medicare-covered preventatives: lab tests, screenings, vaccinations to help diagnose or prevent disease
  • Some drugs covered: immunosuppressants, clotting factors for hemophilia, some vaccines, erythropoetin…
part c coverage
Part C Coverage
  • Also known as Medicare Advantage
  • Combines the coverage of part A and B, but like an HMO or PPO
part d coverage
Part D Coverage
  • Adding Rx Drug Benefit to Original Medicare
  • Adding Rx Drug Benefit to Medicare Advantage (MA):
    • May already be included in MA
  • Administered by private plans that are reimbursed by CMS
  • Formularies are 1st reviewed by CMS
    • Covers drugs in the most commonly used therapeutic classes
    • Most generics covered
    • Doesn’t cover drugs already paid by Part A and B
part d eligibility and enrollment
Part D Eligibility and Enrollment
  • Anyone who qualifies for Medicare can get part D
  • Optional to enroll, but if you do not enroll when you are first eligible you pay a penalty if you sign up later
  • 2 ways to get Part D:
    • Join Medicare Prescription Drug Plan
    • Join Medicare Advantage that includes a drug plan
part d benefit design
Part D Benefit Design

Total out of pocket costs before catastrophic coverage = $4150

medicare part d requirements
Medicare Part D Requirements
  • Since Part D benefits administered by private companies, CMS requires the following for reimbursement:
    • Formulary must cover 146 therapeutic categories commonly used by this population as determined by CMS
    • Formulary must cover at least 2 drugs in each of these 146 therapeutic classes
      • Except: must cover all or almost all antidepressants, antipsychotics, anticonvulsants, anticancer, immunosuppressants, and HIV/AIDS meds
    • If generic available, it must be on formulary
    • All rebates must go back to the payer
    • Prior authorizations, step-therapy, generic sub, preferred brands OK
    • CMS must review and approve all formularies in advance
some common formulary restrictions
Some Common Formulary Restrictions
  • Prior Authorization: doctor must show that the medication is medically necessary before it is covered
  • Quantity limits: limits how many pills you can get at a time
  • Step therapy: one or more lower cost drugs must be tried before step-up therapy drug is covered
  • Non-Formulary Drugs: BZD’s, barbiturates, weight loss/gain drugs, erectile dysfunction meds, cough/cold meds, OTC’s, fertility drugs…
coordination of care
Coordination of Care
  • What if a person has coverage other than Medicare?
  • Medicaid: state benefit
    • Dual eligibility- Medicare beneficiary currently receiving Medicaid benefits
    • Medicaid drug coverage for Medicare eligibles terminated December 31, 2005
    • Auto-enrolled into qualifying plans October 2005
coordination of care18
Coordination of Care
  • Third Party Insurance
    • Any other insurance will kick in before Medicare is charged

Other insurers:

-FEHBP (Federal Employee Health Benefits Program), VA, TRICARE (active duty service, retirees, family), Medigap

  • In original medicare plan, fills in gaps in coverage for part A and B
  • Can’t have drug coverage from both MediGap and Medicare Part D coverage- one must be removed
  • MediGap coverage is not as good as Medicare Part D for drug coverage
  • Under Medicare Advantage, MediGap won’t work- doesn’t pay deductibles, copays/coinsurance
medication therapy management
Medication Therapy Management
  • MMA requires that Part D plans have an MTM program
    • Clinician (pharmacist) reviews patients’ medication therapy
    • Focus on patients with chronic diseases or on a multitude of Part D medications
  • CMS allows for MTM reimbursement
  • Benefits include optimization of therapy, improved outcomes, and close monitoring of side effects
  • Enroll in Medicare Part D if:
    • You have Medicare but do not have prescription drug benefits
    • You qualify for limited income assistance
    • You spend a lot on prescription drugs
  • Enroll by Dec 8th for coverage beginning Jan 1st; there are late enrollment penalties
  • Research the different options available to you
  • Part D as well as most drug benefits are subject to change year to year
additional resources
Additional Resources