Government News
Medicare Prescription Benefit Excludes Benzodiazepines
Psychiatric News
Volume 40 Number 3 page 1-50

The news is met with shock or disbelief. But, believe it or not, when the Medicare Part D drug benefit debuts in January 2006, an estimated 1.7 million dual-eligible patients taking benzodiazepines covered under Medicaid will find themselves stuck with the bill.

The problem appears to be a clause buried within the 416-page Medicare Prescription Drug Improvement and Modernization Act of 2003. That clause defines the drugs for which the Part D drug benefit will pay and the drugs that are excluded. The law states that the Part D benefit will not cover" drugs or classes of drugs, or their medical uses, which may be excluded from coverage or otherwise restricted under section 1927(d)(2), other than subparagraph (E) of such section (relating to smoking cessation agents), or under section 1927(d)(3)."

At first glance, no problem is readily apparent. It was only with the publication of the Centers for Medicare and Medicaid Services' (CMS) proposed rule in the Federal Register on August 3, 2004, implementing the new Part D drug benefit that benzodiazepines entered the picture. Herein "section 1927(d)(2)" is defined—it references Title XIX of the Social Security Act and nine specific classes of drugs that states were authorized (but not required) to exclude from their Medicaid formularies, including benzodiazepines (see box on page 50). CMS's final rule, released January 21, retains the exclusion in accord with the 2003 Medicare law.

While the exclusion applies to all Medicare beneficiaries, the impact will be felt by dual-eligible beneficiaries, who currently can obtain benzodiazepines under Medicaid. Once Part D goes into effect, they will lose that access since people who are eligible for both Medicare and Medicaid will receive prescription drug coverage under Medicare only.

CMS's final rule goes one step further than the old Medicaid statute in the Social Security Act, however. CMS regulations state, "The drugs that must be excluded from Medicare coverage are, with limited exception, drugs that may also be excluded from Medicaid coverage under section 1927(d)(2) of the Act." And so, Medicaid's "may" became Medicare's" must."

The CMS final rule includes extensive comments the agency received regarding the proposed regulations, including significant concern over the exclusion of benzodiazepines. The rule notes, however, that CMS envisions at least two potential "fixes" that would allow continued coverage." First, Medicare Part D allows [drug plans] to provide drugs that are specifically excluded from being Part D drugs if they do so as supplemental benefits through enhanced alternative coverage. We believe that some beneficiaries with chronic conditions will choose to enroll in Part D plans that offer enhanced alternative coverage. Additionally, under Medicaid, States will be able to, at their discretion, provide coverage for a drug that is an excluded Medicare Part D drug."


Many have expressed concern that without proactive mechanisms in place, Medicaid patients who have taken benzodiazepines for a long time may suddenly lose access to their medication and experience potentially severe withdrawal symptoms.

"The exclusion of benzodiazepines will have an adverse impact on patients with mental illness who may not be able to afford to pay for these medications out of pocket," noted Nicholas Meyers, director of APA's Department of Government Relations. "APA is working with other concerned organizations to identify an appropriate regulatory, or if needed, a legislative solution to the problem. We may be left with no alternative but to promote a legislative fix."

Concern quickly spread over the issue as it became more widely known last summer. The American Society of Consultant Pharmacists, who work mostly in extended-care facilities with elderly and disabled patients, many of whom take benzodiazepines, issued a special bulletin on the impending exclusion. In addition, the National Alliance for the Mentally Ill noted its concern over the exclusion in written comments submitted in response to the proposed regulations in August.

More recently, the Medicare Rights Center, a nonprofit, nonpartisan organization that has been closely monitoring the development of the Part D benefit, held a briefing on the benzodiazepine exclusion and is working on a paper that will be used to educate policymakers about the impact of the exclusion.

"As it stands today," said Robert Hayes, president of the Medicare Rights Center, "we predict the dual-eligible population will fare disastrously in this transition. There are transition problems that we believe will leave many people uncovered for a substantial period of time, there are formulary concerns, and perhaps most egregiously, the benzodiazepine problem."

Hayes said that the issues surrounding the transition of dual-eligible patients from Medicaid to Medicare "really amounts to the 6.4-million-person question right now." Of that number, 1.7 million are estimated to be taking benzodiazepines.

Research and analysis completed by the MRC suggests that there may be" an easy" administrative solution to the benzodiazepine exclusion, rather than a legislative solution involving passage of an amendment allowing coverage.

"In our view, the secretary of Health and Human Services could—without any Congressional action—correct the benzodiazepine issue," Hayes explained. The Medicaid statute referred to by the Medicare Prescription Drug Improvement and Modernization Act not only set up the original list of nine classes of medication that could be excluded, but also required the HHS secretary to review and update that list periodically to ensure that the list was clinically appropriate.

"In 20 or so years, the secretary has never reviewed the list," Hayes noted. "Based upon, among other things, the fact that 41 of the 50 states cover benzodiazepines through Medicaid, they are clearly well-accepted medications that are relatively low cost [most are available in generic formulations], we think we have a fairly strong argument to say the secretary should remove benzodiazepines from the exclusion list."

How likely that is to occur, Hayes said, is not known, yet he does believe the legal argument is solid.


Several states, such as Maine, are working with their state Medicaid programs and legislatures to find ways that the state could continue to cover benzodiazepines after January 2006. Stevan Gressitt, M.D., a psychiatrist and founder of the Maine Benzodiazepine Study Group, is working with officials in Maine to introduce legislation allowing benzodiazepines to be covered when they are prescribed according to clinical guidelines and monitored through some sort of distribution program aimed at combating misuse and diversion.

The alternatives, Gressitt said, "are grim. If these patients don't have access to benzodiazepines after January 2006, then they will most likely be switched to something that is covered—an SSRI or an atypical antipsychotic. Neither one of those would be my first choice for an elderly or disabled patient with multiple medical problems and probably [taking] several other medications."

Analysis of CMS's final rule on Medicare's new prescription drug benefit will appear in a future issue. The rule is posted online at<www.cms.hhs.gov/medicarereform/pdbma/4068-F.pdf>.

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