Filling the Donut Hole
Before the new plan year starts on January 1, marking once again the beginning of the prescription drug benefit cycle, many Medicare beneficiaries will find themselves having a difficult time obtaining their medications because of the gap in coverage. This gap in coverage, commonly referred to as the “donut hole,” is the period in the Medicare Part D benefit when the beneficiaries are completely responsible for the cost of their medications. While many long-term care (LTC) residents are not subject to the donut hole, a fair number of them unfortunately are. The Kaiser Family Foundation estimates that some 4 million Medicare beneficiaries are affected by this gap in coverage. Many are just now entering the donut hole, where a gap in coverage occurs during the period after a beneficiary reaches $2250 in total medication costs until coverage resumes at $5100 (ie, the Medicare beneficiary must pay $2850 out of pocket for medications). The dually eligible, those having Medicare and Medicaid, are fortunate enough to have complete coverage with zero out-of-pocket expenditures, so they never need to pay for their Medicare Part D–covered medications. The obvious problem for those entering the donut hole is how this can affect medication adherence. The Kaiser Family Foundation demonstrated that adherence falls significantly when out-of-pocket expenditures rise.1
For LTC facilities, failure of their residents to have adequate resources to pay for medications places the responsibility on the facility for making sure that all ordered medications are available to residents who are unable to pay. This creates an added financial burden for facilities, many of whom are already experiencing financial difficulties. How can the donut hole be filled so that neither the Medicare beneficiary nor the LTC facility has to bear those expenses? The answer to that question lay in first making sure that the patient is prescribed the “right” medication, and then ensuring that it is covered in the “best” way possible.
THE RIGHT MEDICATION
The first step in providing donut hole coverage is making sure that patients don’t enter this gap in coverage unless they truly cannot avoid it. This avoidance of the donut hole can occur by ensuring that the most effective—as well as the most efficient—medications are prescribed. The “most effective” refers to those medications that deliver the highest results with the fewest side effects; the “most efficient” refers to those medications that are similar enough with regard to pharmacokinetics, but available at a lower cost. This includes suitable generic and combination medications. All prescription plans are required to offer Medication Therapy Management Programs (MTMPs), which are aimed at optimizing medication therapy, including efficient and effective use. Unfortunately, an MTMP is limited to those Medicare beneficiaries who are taking multiple medications, suffering from multiple chronic diseases, and likely to incur medication expenditures of more than $4000 per year. The threshold of $4000 for 2006 will remain the same for 2007 as determined by the Secretary of Health and Human Services. While Medicare beneficiaries entering the donut hole by definition will have met at least one of these requirements, it is possible that many do not meet all three requirements. In addition, MTMPs are directed by each individual prescription drug plan (PDP), so each process will vary. Since PDPs are not at financial risk when Medicare beneficiaries fall within the donut hole, many plans may not see the benefit in aggressively managing the expenditures of these members. As a result, this responsibility is likely to fall upon other providers. One of those providers who can play a critical role here is the consultant pharmacist in the skilled nursing facility. There is an opportunity for the consultant pharmacist during the nursing facility drug regimen review (DRR) to include medication reviews that look to optimize medication profiles to delay the entry into the donut hole. (Of course, this is not an issue for our dually eligible residents who pay nothing for Medicare Part D medications, and therefore are not subject to the donut hole.)
GETTING A MEDICATION COVERED
Once the medication profile is optimized, there are still options regarding gaining the most coverage. The first step is to enroll in the “best” plan. Each year around October 15, Medicare lists on its website at www.Medicare.gov all the PDPs and their formulary coverages. There will be even more choices for PDPs in 2007 than there have been this year, as the consolidation in the PDPs available that had been anticipated for 2007 did not occur. Every state except Alaska and Hawaii will have more than 50 free-standing drug plans in 2007 available for Medicare beneficiaries. There will be 17 national drug plans offering coverage in 2007, up from 9 this year.2 Medicare beneficiaries or their formal or informal caregivers can access the plans to determine which provides the greatest level of coverage. It is important when doing this evaluation that notation of the formulary restrictions be taken into account. Of course, residents of LTC facilities and the dually eligible do not have to wait until November 15 to enroll in a new prescription plan or wait until January 1 for that plan to become effective; instead, those who have access to the Special Enrollment Period (SEP) can change plans as needed. The SEP can be used to move to a plan that provides greater access to needed medications instead of paying a greater amount out-of-pocket or needing to go through an Appeals and Exceptions process. Being in the optimum plan is critically important. One of the most overlooked opportunities for delaying entry into the donut hole is taking advantage of the low-income subsidy (LIS). For Medicare beneficiaries with limited income and resources, a significant subsidy of both their premiums and out-of-pocket expenses is available. Instead of the major gap that exists for most Medicare beneficiaries, these individuals pay only a $50 deductible instead of $250 and a 15% copayment instead of the 100% during the donut hole.
Despite this significant benefit, a large number of Medicare beneficiaries have failed to take advantage. Primary care physicians and other healthcare professionals should know to direct patients to social workers and others who can assist in determining eligibility and can assist these patients in the enrollment process provided through either the Social Security or Medicaid programs. An additional benefit for those with limited income and resources is available through approximately two dozen states that offer to their neediest seniors the State Pharmaceutical Assistance Programs (SPAPs). These programs can provide lower out-of-pocket expenditures for medications beyond that available through Medicare Part D. The Centers for Medicare & Medicaid Services (CMS) has established a process for SPAPs to attest that their program meets the requirements to be considered a qualified SPAP under the Medicare Modernization Act. As a qualified SPAP, the program will be eligible for several benefits. Pharmaceutical company samples may be an opportunity for those Medicare beneficiaries outside of LTC facilities; but of course, that is not possible within LTC facilities. In addition, pharmaceutical company samples may provide only limited relief during the donut hole since their availability is variable. In addition to samples, pharmaceutical companies have historically made available lower-priced medications to patients with limited resources. However, with the advent of the Medicare Part D benefit, the Office of Inspector General (OIG) has called into question many of these plans. The OIG became concerned that these programs encouraged the inappropriate overuse of branded products over generic ones; as a result, this option does not currently exist for Medicare beneficiaries. Several pharmaceutical companies are working with the OIG to develop a program that would provide coverage for those Medicare beneficiaries with limited resources who do not qualify for the LIS. The OIG is pushing for these programs to provide access to all pharmaceutical products, including generic medications.
The magnitude and effect of the gap that exists in Medicare Part D coverage is directly related to the political will of the federal government. Several pieces of legislation currently exist that would fill in the donut hole gap in coverage. This is the opposite of what will currently happen under Medicare Part D, which calls for the expanding of the coverage gap to increase the cost-sharing borne by Medicare beneficiaries, reducing the federal obligation. In 2007 for example, the donut hole moves from $2250-$5100 to $2400-$5451, which is a gap of $3051—a $200 increase over last year’s gap in coverage. In addition to the governmental intervention, economic forces will likely play a key role. Medicare beneficiaries have been drawn to plans that provide additional coverage over the legislative minimum. As Medicare beneficiaries become more knowledgeable about their medication needs, the drive toward PDPs offering comprehensive benefit coverage, with coverage of the donut hole as well as MTMPs, will likely increase. Here again is an opportunity for geriatric care providers to play a critical role in not only helping their patients navigate these waters but, on a larger level, helping to provide direction to policymakers so we can ensure access to critical medications to assure that these meds are not limited because of a patient’s inability to pay. Because in the end, we all pay for a patient’s failure to take his or her medications when it results in ER utilization or hospitalization, which costs a great deal more than filling a donut hole.
Please send any questions or experiences about Medicare Part D you would like to share with readers to: BSpivack@Waveny.org