Government News
Action Needed Now to Avoid Part D Problems in 2007
Psychiatric News
Volume 41 Number 22 page 1-29

With the coming of the New Year, it may be déjà vu all over again for psychiatrists and their patients in the Part D Medicare prescription drug program.

Prescription drug plans have been revising their formularies, and exceptions and approvals for prescription drugs granted in 2006 may terminate at the end of the year. The status of prescription drug plans (PDPs) may also change: some plans will go out of existence, requiring patients to choose new plans, while other plans will no longer be affordable for the low-income beneficiaries who were enrolled in them in 2006.

In the latter case, the government will auto-enroll low-income patients into new PDPs, providing they stayed with the plan into which they were originally enrolled at the beginning of the year, said Irvin (Sam) Muszynski, J.D., director of APA's Office of Healthcare Systems and Financing.

But those low-income patients who changed plans in 2006 and whose plans are no longer low-cost plans in 2007 will learn of this only when they receive their Annual Notice of Coverage or when they get their first bill in 2007.

All of this is likely to send shivers down the spines of clinicians who recall the near chaos that ensued 11 months ago when the new prescription drug plan took effect.

Then, there was a tidal wave of complaints including reports that patients were being charged inappropriate copayments, pharmacies were unable to confirm eligibility in the program, and drug plans were failing to have mandated transition policies in effect for the 6 million "dual eligibles" who ceased having their prescription drugs paid for by state Medicaid programs and began coverage under the new Medicare program on January 1.

So severe were the problems that by February half the states and Washington, D.C., had taken emergency action to continue prescription drug coverage under state financing until problems with the new federal program could be fixed (Psychiatric News, February 3).

In January Andrea Stone, M.D., medical director of Carson Center for Human Services in Westfield, Mass., told Psychiatric News that many patients had been informed that they needed prior authorization for medications even though PDPs were supposed to have transition plans for dual eligibles to circumvent the need for prior authorization. In other cases, patients had been informed that the pharmacy could not confirm their enrollment in a plan at all.

"So far it has been stress, confusion, and pandemonium," she said at the time.

Now, Stone says many of the problems originally encountered in January have been resolved. "The kinks seem to have been worked out," she told Psychiatric News.

But not all clinicians report the same satisfaction. Muszynski said high copayments continue to be charged to low-income subsidy (LIS) patients, most of whom have income between 135 percent and 150 percent of the federal poverty level. These patients can have copayments as much as 15 percent of the drug price.

Availability of benzodiazepines and barbiturates—which are precluded from coverage by statute—also continues to be a problem. "There's some good news on that front in that several plans have indicated that they will cover those drugs," Muszynski said. "united Healthcare has made it known that under its enhanced formulary, it will cover benzodiazepines and barbiturates."


Another problem is the time physicians must spend pursuing appeals and exceptions (see box at right).

"The amount of time and level of knowledge necessary to navigate the system is beyond the scope of the average beneficiary or physician," Muszynski told Psychiatric News. "The notion of beneficiary protection is more on the illusory side than on the real side. The average psychiatrist may admit one to four people a week, but the same psychiatrist may write 10 to 20 scripts a day.

"The amount of uncompensated time spent by doctors getting prior authorizations is a significant problem," he said.

Finally, authorization for off-label use of drugs remains a major problem for clinicians, Muszynski said.

According to CMS, there were 19 major PDPs as of April that covered at least 1 percent of the covered population in Medicare; each of these parent companies may offer plans under as many as four or five different plan names.

The top five companies are UHC-Pacificare, which enrolled 27 percent of all beneficiaries; Humana, enrolling 18 percent; Wellpoint, and Member Health, each of which enrolls 7 percent; and WellCare Health Plans, which enrolls 6 percent of beneficiaries.

A total of 38 million beneficiaries received some kind of drug coverage as of June. This included 10.37 million in stand-alone PDPs; 6.04 million in Medicare Advantage plans with prescription drug coverage; 6 million dual eligibles who are automatically enrolled in drug coverage; 6.90 million receiving a Medicare retiree drug subsidy through the Medicare program; and 3.46 million receiving drug coverage through either the Federal Employee Health Benefits program for retirees, or the military's TRICARE program for retirees.

About 5.38 million people receive coverage through other programs such as the Veterans Administration or the Indian Health Service.


Now, with the approach of the New Year, the deck may be reshuffled all over again.

"There are certainly some people who have benefited from the new program and some for whom it works well," psychiatrist Elizabeth Delasante, M.D., of Baxter, Minn., told Psychiatric News. "But I really dread what January will bring because it could be a repeat of last year."

Muszynski told Psychiatric News that clinicians should prepare for three broad changes that can affect their patients: change in the status of PDPs, changes in drug formularies, and the expiration of exceptions and approvals that were granted in 2006.

"When we look ahead to the 2007 plan year, the prognosis for how much things have improved is going to be tested in the days ahead," Muszynski said. "The people who may have problems are those whose plans have changed. There will be two kinds of plan status change—one is that the plan is no longer in existence and the other is that a low-premium plan may no longer be low premium."

In that case, patients should have received a notice by this time and will be auto-enrolled into a new low-premium plan—providing they stayed in the plan into which they were originally auto-enrolled in 2006. If they changed plans, they will not receive a notice and will not be auto-enrolled; they will likely only learn that they owe a small premium when they receive their first bill in 2007.

He said that formularies are not expected to change drastically, but cautioned that experience will vary, and there may be individual cases in which substantive changes occur in available drugs. He added that CMS has improved its "formulary finder"—the government's online tool that had encountered significant problems during the program's first year.

"Another test of whether things have improved will be the success of the formulary finder and whether plan information on PDP Web sites is reliable," he said. "These are all access to information tools without which you are traveling blind."

In addition, exceptions granted by PDPs in 2006 may have to be renewed in 2007. But Muszynski said APA has been working with major insurers and reports that some of those plans may grant automatic extensions to exceptions granted this year.

Finally, Muszynski said another key test will be CMS's transition policies for patients who move into a new plan. Last year, patients moving from the Medicaid program to the new Part D program were expected to continue receiving prescribed drugs during the transition period; frequently that didn't happen, and patients sometimes left the pharmacy without their medications.

This January, that's not supposed to happen. "CMS has said that the PDPs have attested that they have met the requirement [for having a transition policy in effect]," Muszynski said. "This time if they fail, corrective action should be taken."

Muszynski urged clinicians seeking information about these and other possible changes to go to<www.mentalhealthpartd.org> for guidance (see box at left) and to contact the Office of Healthcare Systems and Financing at (866) 882-6227 with questions and problems.

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