The transition to Part D: What you need to know now

The media, seniors and the entire healthcare industry seem to be holding their collective breath in anticipation of the Medicare prescription drug benefit. But despite the fact that January 1 is fast approaching, many details of the program and exactly how it will affect providers, patients and representatives remain sketchy. Now is the time to educate yourself and your customers on the benefit and its implications for your products; otherwise, you may miss out on an unprecedented opportunity to serve as a true partner in healthcare during a potentially confusing transition.

Pharmaceutical Representative recently spoke with Richard Stefanacci -- founding executive director for the Health Policy Institute at the University of the Sciences in Philadelphia, a Centers for Medicare & Medicaid Services Health Policy Scholar for 2003-2004, and a practicing geriatrician -- to get the facts reps need to prepare themselves and their customers as the countdown begins.

Enrollment

How many seniors are expected to participate in the new benefit program?

The 6.5 million Medicare beneficiaries that are classified as dually eligible (having both Medicare and Medicaid) have to enroll in Medicare Part D, so at the very least that group. And then there are about 6 million seniors enrolled in the Medicare managed care plan, and they'll be covered under the Part D benefit, so that's a total of 12.5 million. And then we get into the gray areas. A third of seniors currently have no drug coverage. The Centers for Medicare and Medicaid Services believes that the majority will enroll in a Medicare Part D plan. The Kaiser Family Foundation and others believe the proportion enrolling will be much smaller. I think it's going to be a slow ramp-up because of how confusing the benefit is. So by May 15, we'll probably just have about 15 million enrolled in Medicare Part D. The wild card is how well prescription drug plans and others are able to attract Medicare beneficiaries to Medicare prescription plans.

What will the enrollment process look like?

Medicare has made available a "Compare" Web site [at www.medicare.gov under the "Search Tools" option] where seniors can put in their zip code and some information about their drugs and preferred pharmacy and get a list of plans that are available to them. And in addition to the list, it gives them a link to each site so that they can enroll electronically. Beneficiaries can also enroll directly with the plans themselves or by calling 1 (800) MEDICARE.

What issues should healthcare providers and patients be aware of regarding the timing of enrollment?

The enrollment period starts November 15, and most years it will go until December 31. But for the first year, it's extended until May 15, 2006. Sixty-two days after that date is when the late enrollment penalty starts -- that's [a 1% increase in the premium] for every month a Medicare beneficiary is without Part D coverage or coverage that is actuarially equivalent (that provides at least as good a benefit as the Medicare Part D coverage). If they delay enrolling -- say they find it confusing or aren't using a lot of medication -- and they wait two years, their premium will have gone up by 24%.

Do you foresee any problems for the dually eligible patients who are transitioning from Medicaid to Medicare drug benefits?

The problem with the dually eligible is going to be, one, that CMS has set up an auto-enrollment process whereby they're randomly assigned to a prescription drug plan so they're not without coverage on January 1. And that random assignment doesn't necessarily place them in the plan that's best for them. So the problem in that case could be that, if the dually eligible aren't proactive, they may wind up in a plan that their preferred pharmacy isn't in and their medications aren't available in, so that could be an access problem. All Medicare beneficiaries need to work with their healthcare providers to identify the best plan for them to join. This is especially critical for dual eligibles because their Medicaid drug coverage ends at midnight on December 31, so they need to join the optimum plan by that date.

The other problem would be that with 6.5 million dually eligibles, probably some 10% are going to fall through the cracks. So, if they aren't actively participating, they could be without any coverage on January 1. To point out a recent incident, all the dually eligibles who were displaced from New Orleans aren't going to get this information anytime soon, because it's mailed to their legal address. So there's a real possibility that those dually eligibles could be assigned to a prescription plan that they are not aware of with networked pharmacies that are not available where they have relocated.

What do doctors and seniors need to know about enrollment before January 1?

I think seniors need to first be aware that there is a Medicare Part D benefit, whether they're eligible, and what medicines they're taking as well as those they are likely to be taking so they can assess the plans. Doctors need to be aware of what prescription drug plans are going to be available for their patients so they can encourage their patients to enroll in the plans that are most appropriate. And one of the ways they can do this is on that "Compare" Web site, which will allow not only beneficiaries but physicians, too, to put in their zip code and the 25 most prescribed medications in their practice to figure out exactly what plans are going to be best for the patients they serve -- which I think would be a big step for physician practices.

Prescription drug plans

What regional and state variations in the program should reps be aware of?

There are ten plans that are national, each with its own formulary. Then, CMS has broken the country down into 34 prescription drug plan regions and 26 Medicare managed care regions, and each region will have its own unique set of plans with their own formularies, premiums and pharmacy networks. And within each region, there are going to be certain plans that are dominant. So reps need to be familiar with the plans that are specific to their region. This information is available now at www.cms.hhs.gov -- there is a map of the United States, and you can click on a state for the list of PDPs and Medicare Advantage PDPs.

What should representatives know about prescription drug plan formularies under Part D?

I think what's going to be vitally important is that pharmaceutical representatives quickly identify how well their product is positioned on a formulary. Because if it's in a favored position, representatives should let physicians know that so they can direct patients to the appropriate plan. If it's not in a favored position, representatives should identify the appeals process that's going to be needed to gain access to those meds. In addition to the appeals process, plans are likely to require prior authorization for certain drugs, so pharmaceutical representatives will need to be aware of that so they can eliminate whatever barriers exist to gaining access to their products. The public can view formularies by plan through www.medicare.gov and through each plan's Web site.

Two other things that are important to know: One, not all prescription drugs are covered under Medicare Part D; the two big ones for reps are weight-related medications and benzodiazepines. Also, plans do not have to cover off-label use, so medications that are used off-label to a large degree, like atypical antipsychotics, could present a problem in gaining access for beneficiaries.

How much will benefits vary among the different prescription drug plans?

The benefit will vary considerably. Think of a bell-shaped curve from plans that have wide-open formularies to those that have fairly open formularies that are tiered with prior authorization to fairly restrictive plans at the end of the bell curve.

What influence will pharmaceutical companies have on formulary status?

The position of their drug within a formulary is going to be based on their contracting with the PDP, so pharmaceutical companies will have a large degree of ability to position their drug based on their rebates and pricing.

Will reps be able to play any role in this process?

It depends on the pharmaceutical company. Some allow the reps at different levels to have an influence on that process, especially with smaller regional plans. However, more and more are moving toward centralized contracting, so reps will have less of a direct influence.

What kinds of strategies should representatives use to optimize access to their products?

The formularies are going to play a large part, and obviously, if your drug is not on a formulary, it's going to be difficult to access that medication through an appeals process. So the first thing is to know your drug's status. And secondly, depending on policies regarding prior authorization and step therapy, figure out what the barriers are, if any, and develop tools so physicians know how to reduce these barriers when they want access to the medication -- such as chart work sheets that walk physicians through gathering all the information for a successful appeal, presented in a form that could be used as a chart note and faxed to a plan for approval. Reps are going to have an even larger part than they do today in pull-through strategy, but these strategies must be developed on a regional rather than a national basis.

The transition

Is there anything reps can do to help doctors deal with the transition?

Two things: One is providing information to the physicians that they can provide to their office staff and patients to encourage enrollment. Obviously, the pharmaceutical companies will benefit through enrollment, because when seniors are able to reduce their out-of-pocket expenditures, there tends to be higher utilization of medication. And two, helping physicians identify the prescription drug plans that offer the greatest access to their specific drug products.

Also, representatives should provide information to assist physicians in accessing their company's medications for patients. This includes knowing which plans provide open access and how physicians can provide clinical information [to the PDP] in an easy and concise manner to access these meds if they are not on the formulary.

What changes will pharmacists be seeing, and what support should representatives provide?

Some pharmacists will be able to participate in medication therapy management services, and that will be dependent on the prescription drug plans and the pharmacists contracting together. Pharmaceutical companies can certainly play a role in providing tools that assist in optimizing outcomes through appropriate utilization of medications. These can include such programs as disease state management and medication use instructions. Additionally, assistance to pharmacists can be similar to the support [representatives would] provide to a physician -- one, around general enrollment, and two, around reducing the barriers to accessing specific medications.

What about nurses?

Nurses within a physician's practice will probably wind up providing the bulk of the face-to-face counseling with patients, so they probably need even more detailed information and resources that help them sit down with patients to make sure they enroll in the plan that's best for them. There's no question that nurses and nurses' aides are going to be the primary group within physicians' practices providing that level of education.

What will be the biggest change for reps?

I think the biggest change for reps is that historically, access to medications for seniors and Medicaid beneficiaries has been pretty open, but recently, states have been moving more and more toward being much more restrictive. Now, instead of those two groups, representatives are going to deal with Medicare prescription drug plans. So reps are going to need to be knowledgeable about these new players. It's not going to be the Medicaid preferred list anymore; it's going to be Medicare prescription drug plan formularies that dictate access.

Are there any facts about Medicare Part D that aren't widely known and will become important during this transition?

One common misbelief is that it's only for low-income seniors. Anybody who's entitled to Medicare Part A or enrolled in Part B can get Medicare Part D, which is about 42 million Americans. A second misbelief is that there's really no benefit for seniors to enroll, and that's clearly not the case. Low-income seniors benefit the most, with a savings of anywhere from 100% to 83%, and even those seniors not eligible for the low-income subsidy can reduce their out-of-pocket expenditure by almost a third. So there are significant savings. Third, I think a lot of seniors and their physicians aren't aware of the late enrollment penalty. The fourth fact is that patients are going to ask their physicians which plans are best, and physicians can really benefit not only their patients but also their practice by being proactive and, again, identifying which plans allow the greatest access to medications. Otherwise, later on they're going to be dealing with prescriptions that are denied.

What are the best ways reps can react to changes they'll see during the transition to Medicare Part D?

I think the best way to react is to be proactive -- to be knowledgeable about the benefit, to provide resources for physicians and practices to encourage enrollment, and to reduce barriers for their specific products.

About the Author

Susan Vargas