Medicare Part D for Professionals Overview and Updates for 2014

1. Medicare Part D for ProfessionalsOverview and Updates for 2014 Sarah Pitsoulakis sarah.pitsoulakis@drwi.org Kate Schilling kate.schilling@gwaar.org Pamela Franke pjf@legalaction.org Ginger Rogers ginger.rogers@drwi.org September 25 & 26, 2013

2. Agenda Part 1 • What is Part D • Medicare Part D Costs • What Part D Plans Cover • Enrollment Periods • Plan Selection • Annual Plan Transitions • SeniorCare

3. Based on work history and age or Disability (SSDI, Title II) Not comprehensive coverage Federal program. Some parts are administered by the Social Security Administration, some by Medicare. What is Medicare?

4. What is Part D? • Part D is Medicare’s prescription drug program. • Part D is offered solely through private insurance companies who have approved contracts with Medicare. • Medicare requires that all plans follow basic cost-sharing structures and include a certain level of coverage in their formularies.

5. Part D For 2014, 28 plans will be available in WI • All plans cover Wisconsin residents, statewide • The only way to choose a plan: www.medicare.gov • Plans change each year. Costs, drugs covered on formulary, utilization management, etc.

6. 2014 New Plans • Symphonix Value Rx • Transamerica Medicare Rx Classic • Transamerica Medicare Rx Choice • Cigna Medicare Rx Secure-Max • Cigna Medicare Rx Secure-Xtra • Humana Walmart Rx Plan

7. Plan Name Changes • Healthspring • Cigna Healthspring-Reg. 16 • First Health Part D Premier • First Health Part D Essentials • Reader’s Digest Value Rx • HealthMarkets Value Rx • Humana Walmart-Preferred Rx Plan • Humana Preferred Rx Plan

8. Medicare Part D: Eligibility • Eligibility is simple: • Entitled to Part A and/or enrolled in Part B • Must live in the service area of the prescription drug plan • Must enroll in a plan

9. Part D Types • Stand alone prescription drug plans • Prescription drug coverage included as a part of a Medicare Advantage plan or a special needs plan. • The basic concepts of cost-sharing are the same whether the plan is a Part D plan or within a Medicare Advantage plan.

10. Medicare Part D costsMedicare-only

11. Premiums • All plans have a monthly premium • In 2014, range from $12.10 to $137 • All plans may have a deductible • All plans have a coverage gap • All plans have catastrophic coverage

12. Part D Income-Based Premiums • Individuals with an income over $85,000 for an individual or $170,000 for a couple will have a higher Part D premium. • Only approximately 5% of all Medicare Part D beneficiaries are subject to this premium increase. • Click here for more information.

13. 2014 Medicare Part D Costs Medicare Only: Standard Benefit Deductible can be no more than $310 Initial coverage limit $2,850 OOP threshold $4,550 Catastrophic Minimum cost sharing $2.55 $6.35

14. Medicare Part D costsStandard Benefit Total OOP costs = $4,550 TOTAL drug cost @ $2,850 Deductible $310 or less Catastrophic Period D Initial Coverage Period CoverageGap Costs 47.5% of brand name drugs + 72% of generic drugs. Costs either 75% plan/ 25% member or actuarially equivalent tier structure. Minimum cost Brand Name: $6.35 Generics: $2.55 From January 1, 2014 (or at start date for those who begin Med D after January 1, 2014)

15. Closing the Coverage Gap • 2014: federal subsidy for brand name medications reduces beneficiary cost to 47.5% of the total drug cost, and the federal subsidy for generic medications reduces beneficiary cost to 72% of the drug cost • Each year until 2020, the federal subsidies will increase until the maximum beneficiary cost is 25% for both brand name and generic medications

16. Discount on Brand Name Drugs in the Coverage Gap • Although this is a discount to the consumer from the drug manufacturer, the beneficiary won’t have to do any paperwork. • The savings will be seen right at the pharmacy. • If the plan already offers coverage during coverage gap, the discount will apply to the cost the beneficiary would pay under the plan’s gap coverage. • Discounts only apply to portions of “straddle claims” in the coverage gap.

17. Generic Drug Subsidies in the Coverage Gap • In 2014, beneficiaries will pay 72% of the costs of generics in the coverage gap. • Only that 72% will count toward TROOP • Example: A beneficiary paid $7.20 for a generic drug. The drug cost was $10.00. Because this drug was a generic, only $7.20 will count towards TROOP and getting out of the coverage gap.

18. Note: Dispensing fees are not discounted.

19. Costs: Plans can vary from the Standard Plan • Actuarially Equivalent Model: • Plans can shift costs in a number of ways as long as the coverage is actuarially equivalent to the standard benefit. • “Actuarially Equivalent” means that the plans can shift costs around using deductibles, formulary restrictions, and co-pays as long as the coverage, added up for a calendar year, is ON AVERAGE equivalent to the standard benefit.

20. Medicare Part D: Benefits and Cost Sharing • Enhanced Coverage • Plans can offer enhanced benefits which are a part of the plan but not a part of the Medicare Prescription drug benefit. • Enhanced plans can offer coverage that includes Part D excluded drugs, vitamins, or other benefits that are not a part of the Medicare Part D prescription drug benefit. • Costs associated with enhanced benefits do not count towards Part D out-of-pocket cost-sharing that is used to determine when someone meets their deductible, coverage gap, and catastrophic coverage. • Enhanced plans are not always cheaper than just buying the “enhanced” options at cost.

21. What Part D Plans Cover

22. Drug Plan Cost-Controls • Formulary 2. “Utilization management” techniques • Prior authorization • Quantity limits • Step therapy • Medication Therapy Management (MTM) 3. Tiered cost-sharing

23. “Part D Formulary Drugs” are… Retail pharmacy prescription drugs

24. Except for: • Medicare Part B drugs: Outpatient drugs that require durable medical equipment • “Off label” prescriptions • Drugs not approved by FDA • Prescription vitamins, weight control, over-the-counter drugs, “cosmetic” purposes (hair loss), erectile dysfunction drugs

25. Benzodiazepines and Barbiturates • The ACA removed the exclusion of coverage for benzodiazepines and Barbiturates. • As of 1/1/2014, all will be covered Here is the link to information on coverage of benzodiazepines and barbiturates

26. Part B vs. Part D The same medication can be Part B or D depending on circumstances of the patient. The following are Part B drugs: • Anti-cancer: • Oral anti-cancer • Immunosuppressants if transplant covered by Medicare • Durable medical equipment supply drugs (DME) e.g. nebulizer • When used in patient’s home • If the DME was covered by Medicare • Parenteral nutrition for individual with non-functioning digestive tract • Infusion/injectable drugs if administered by a physician Other Part B covered items: • DME: test strips, lancets, ostomy, etc. Part B vs. D link Part B Coverage link

27. Utilization Management • Prior Authorization (PA) • Plan will require a prior authorization before coverage of certain medications. The plan will approve by a coverage determination. • Quantity limits • Excess amounts from the most common dosage level. This will require a coverage determination. • Step Therapy • Try another drug before covering the prescribed medication. Coverage determination is needed to override this requirement.

28. Medication Therapy Management • Medication therapy management is designed to ensure that beneficiaries with complex medication needs understand their medications and their usage, possible adverse effects, and drug interactions. • Medication Therapy Management has been around since 2006. Part D plans MUST offer an annual comprehensive medication review to all eligible beneficiaries as a part of MTM. • You may see more beneficiaries with questions about MTM as a result. • Beneficiaries can opt-out. • Planfinder will now have information on each plans MTM eligibility criteria.

29. Tiering • How medications are grouped • Usually 1 - 4 • Lowest tier may have the lowest cost • usually a copay • Higher tiers, such as specialty drugs will have higher cost • usually a co insurance amount.

30. Enrollment Periods

31. Part D Enrollment Not automatic Must choose and enroll in a plan during an enrollment period.

32. Enrollment Periods • Initial Enrollment Period (when first eligible for Medicare) 2. Annual Enrollment Period or Open Enrollment Period 3. Special Enrollment Periods

33. Initial enrollment period (when first eligible for Medicare) • 7 month window • 3 months before • The month first eligible (age 65 or 25th SSDI payment month) • 3 months after • Retroactive Medicare • Month notice received • 3 months after

34. 2. Annual Enrollment period (AEP) aka open enrollment period or annual coordinated enrollment period • October 15 to December 7 • EVERYONE • should check their plan

35. What You Can Do During AEP • You can sign up for a new PDP. • You can switch PDPs. • If you have a MAPD, you can switch to another MAPD. • If you have a MAPD, you can go to Medicare Advantage and a stand alone PDP (remember to check that the Part c plan is not a MAPD) • If you have a MAPD, you can go back to original Medicare and a stand alone prescription drug benefit. • You can disenroll from a PDP (for example if you want to take SeniorCare and drop PDP).

36. What is a SEP? Special Enrollment Period: In general, a special enrollment period gives the ability to make one election or choice within a period of time. • Disenrollment is an election • Enrollment is an election Enrolling in a plan automatically disenrollsyou from your previous plan!

37. Special Enrollment Periods • Low Income Subsidy (LIS): ongoing 1X/month SEP • Change in residence • Enter/leave long term care facility • Loss of creditable coverage • Enroll in Part B during annual enrollment (Jan–Mar): Part D SEP (April-June) • Those enrolled in an SPAP(state pharmaceutical assistance program) have one SEP per calendar year (Chronic Renal Disease and Cystic Fibrosis Program, Hemophilia Home Care, SeniorCare if >200% FPL or levels 2&3)

38. SEPs (cont’d) • Plan terminated/ non-renewed (latter have until last day of February) • Other SEPs coordinate with Medicare Advantage (Part C) enrollment periods • Loss of LIS at end of year: enrollment period between January 1 – March 31st • Others on case-by-case basis

39. 5-star SEP • Part D eligibles can enroll into a Medicare Advantage or PDP plan with a 5-star rating once a year. • Ratings come out in October, and are good January-December of the following year. • The SEP starts on December 8 and runs through November 30 • Effective first calendar day of month following enrollment.

40. 5-star SEP (cont’d) • Can use this to go from any type of plan to any 5-star plan (Medicare Advantage, Medicare Advantage w/ PDP, PDP). • If you go from Medicare Advantage w/ PDP and switch to a PDP, you will go back to original Medicare for basic medical coverage (A&B). • Even if you are in a 5-star plan, you can use this to switch to a different one. • Here is a link to a good overview by CMS

41. SEP for Medicare Advantage-Original Medicare Conversions during Medicare Advantage Disenrollment Period • From January 1, 2014 through February 14, 2014, individuals who disenroll from a Medicare Advantage plan (even one without drug coverage) to go back to original Medicare will have an SEP allowing a one-time enrollment into a stand alone PDP. • This can be used to either enroll in a PDP which will automatically disenroll the beneficiary from the Medicare Advantage or MAPD or after the individual has disenrolled from the Medicare Advantage Plan. • New PDP enrollments will be effective on the first day of the calendar month following enrollment.

42. 2014 Plan Non-Renewals • Each year, some plans fail to renew and some are terminated. • By October 2 those whose plans are not renewing will receive notice from their plan. • These individuals need to choose a new plan for 2014.

43. Non-Renewals • Silverscript Basic, Choice and Plus • Reader’s Digest • Humana Complete • Envision Gold

44. SEP for Non-Renewals • Beneficiaries in non-renewed plans can sign up for a plan during the open enrollment period. • If beneficiaries have not signed up for a new plan by December 7, they can sign up for a new plan until the end of February. • Their new plan is effective the first calendar day of the month following enrollment. • Plan termination SEPs are handled differently.

45. Medicare Advantage Plan Non-Renewals • Individuals in Medicare Advantage PD plans that were non-renewed have a couple of additional options. These options must be weighed with an understanding of the related Medigap rights. • Please attend the Medicare Advantage training this afternoon to understand these options.

46. Plan Selection

47. Plan Selection • The only way to effectively choose a plan for most people is by using the computer. • 1-800-MEDICARE will help people over the phone. • Use the plan finder on Medicare.gov to help individuals identify plan options.

48. Pharmacy Selection • You can’t do a plan finder without entering a pharmacy. • Enter up to 2 pharmacies.

49. Preferred Pharmacies • Plans have preferred pharmacies in their network • If you expand the list of pharmacies in the plan finder to the maximum allowable miles, it will tell you which pharmacies in that area have a preferred pharmacy.

50. Preferred Pharmacies • Always check the pricing of the medication on the plan finder. • Discrepancies have been found between preferred network pharmacies and network pharmacies. • Remember, all pricing except for LIS is estimated.