Be Prepared to Answer Medicare Part D Questions

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) created Medicare's Part D prescription drug benefit, which goes into effect January 1, 2006. All Medicare beneficiaries will be affected by this new coverage, even if it is to decide that they don't wish to participate.

The MMA established a competitive market approach for Part D by mandating that it be managed by private prescription drug plans, or PDPs. As of mid-May more than 300 entities had applied to become participating PDPs.

Central to this arrangement is that each PDP will negotiate contracts with pharmaceutical companies for medications. By law the federal government will not be involved in setting prices or negotiating with manufacturers on prices or rebates.

For administrative purposes the country has been divided into 34 PDP regions, and each region must have at least two PDPs. Each PDP will receive a set, or capitated, payment from Medicare for each beneficiary enrolled in its plan.

Key administrative details of the program are still being worked out. Among them: how patients will be enrolled in the benefit, how continuity of care will be assured as patients make the transition into the new benefit, what medications will be included in each PDP's formulary, and what strategies will be used to manage the PDP's formulary. The extent to which potential problems are anticipated and addressed will determine whether beneficiaries continue to get the medications they need as they move into their new PDP.

Not Much Time Allotted

Enrollment is scheduled to begin November 15. All Medicare beneficiaries who choose to enroll in Part D (except for “dual eligibles”—individuals who are eligible for both Medicare and Medicaid) will be able to select the PDP in their region that they believe offers them the best coverage, given their particular medical needs. They can do this by going to the Web site of the Centers for Medicare and Medicaid Services (CMS) at<www.cms.gov> or calling CMS at (800) MEDICARE.

Thus, by November 15 CMS will need to have an easily accessible listing of all participating PDPs for each region and their formularies and monthly premiums. Because of the complexities of the formularies and their administration—for example, which drugs are preferred, which require prior authorization, and which are subject to fail-first or other pharmacy benefit management techniques—many beneficiaries will undoubtedly find the process of selecting an appropriate PDP daunting, and they will likely turn to their physicians for help.

To make an informed choice about whether to participate in the program, Medicare beneficiaries who have prescription coverage from another source need to be able to compare their current costs with potential costs under the new coverage.

Dual-eligible beneficiaries, who currently receive their medications through their state's Medicaid program, will not have to make a decision about enrollment. Beginning in late October, they will be enrolled automatically in one of the PDPs in their region with the lowest premiums.

The automatic enrollment process, however, is not designed to match beneficiaries with the PDP that gives them optimal coverage based on their individual needs. Although they have the right to switch to another plan with an equivalent premium prior to January 1, 2006, their ability to do so greatly concerns patient advocates, given the amount and complexity of information that must be considered. The question is, Who can facilitate the selection process for these patients, many of whom have a mental illness or are cognitively impaired? All concerned—including state mental health authorities, community providers, practitioners, and consumer advocates—need to be thinking ahead about how to provide accurate information to people with mental illness and their representatives and how to assist them in making the best choices.

Psychiatrists Need to Know

If the transition to the new program is to be successful, psychiatrists who are involved in the care of patients shifting to Part D coverage need to be prepared to help them analyze information about the PDPs in their area to increase the likelihood that they select the optimal plan.

These are among the questions to ask:

After patients have selected a PDP, psychiatrists will face the chore of learning to navigate new sets of rules for getting their patients access to the medications they require. Although CMS regulates the appeals process for overturning negative PDP decisions, each plan will have its own way of doing business.

As these points demonstrate, it is critical for psychiatrists to have the information and resources they need to help their patients choose the best plan.

To prepare APA members for the transition to Medicare Part D, APA's Office of Healthcare Systems and Financing is launching an educational project next month. In the meantime, if you have any questions, send them via e-mail to Karen Sanders at [email protected] or Irvin “Sam” Muszynski at [email protected] or call the APA's Managed Care Help Line at (800) 343-4671.▪