Part D: Implications to Home and Community-Based Waivers

1. Part D: Implications to Home and Community-Based Waivers Charles Milligan, Executive Director Center for Health Program Development and Management University of Maryland, Baltimore County October 7, 2004

2. Areas to be Discussed • Formulary • Distribution channels • Transition period • HCBS Waiver Case Managers • Transportation • Risk of Cost Shifting/Institutionalization

3. Formulary • In FY 04, Maryland had 3,147 dual eligibles in two waivers. The top 10 Rx:

4. Formulary (con’t) • But that’s not the challenge. The challenge is that these 3,147 beneficiaries: • Received a total of 218,954 prescriptions in FY 04 (an average of 69.6 each); • Received 1,630 unduplicated medications; and • 399 separate medications were received by only ONE beneficiary each

5. Distribution Channels • Medicaid beneficiaries receive drugs from many sources;network issues will arise: • Over-reliance on mail-order for maintenance medications could cause problems

6. Transition Period • Will it be affordable, and considered not to be Medicaid fraud, for a state to dispense a 90 day supply of Rx in December 2005? • Even assuming auto-enrollment occurs, can/will Medicare plans approve all of the medications necessary, on a timely basis, for HCBS beneficiaries to remain in the community? • The number of people, and medications they take which must be transitioned, is extensive

7. Transition Period In FY 04, 68% of HCBS Dual Eligibles in Maryland Received Four or More Drugs Per Month

8. HCBS Waiver Case Managers • At present, HCBS waiver case managers generally do not need to coordinate access to Rx for HCBS beneficiaries across multiple vendors and formularies • If this role is incorporated into the job description of HCBS waiver case managers, it might change the caseload ratios and/or payment rates related to case management services

9. Transportation • Medicaid provides non-emergency transportation only to ensure access to Medicaid-covered benefits – in January 2006 this will not include Rx for dual eligibles • Thus, once Rx no longer is covered by Medicaid, HCBS waiver beneficiaries may have more difficulty simply picking up their medications

10. Risk of Cost Shifting and Institutional Care • For HCBS beneficiaries covered for Rx under Medicare, the financial incentive to spend funds on Rx to avoid institutional care will not be aligned across payors • For institutional residents covered for Rx under Medicare, the financial incentive to develop good community-based plans of care, which depend on Rx, will not be aligned across payors

11. Conclusion • The formularies AND how the Rx’s are distributed both matter • Access to medications may depend on transportation and case managers, where Medicaid will not have any formal role • Thoughtful transition planning will be difficult, and might benefit from 90 day supplies in 12/05, which might both be expensive and constitute Medicaid fraud • The financial incentives to spend money on Rx to keep people out of nursing homes are not aligned across payors