Medicare Compliance & Reimbursement

New studies reveal what worked for PDP frontrunners in 2006.

Whether they offer a standalone prescription drug plan or a Medicare Advantage plan, the steps carriers take now to attract and keep hold of their Medicare Part D enrollees will be critical to their success in 2006 and beyond.

Although Part D is still gaining its legs, it's already clear which plans are achieving success offering the benefit. The Kaiser Family Foundation commissioned two new studies that reveal who the Part D frontrunners are and what they've done to position themselves for success. Here are five tips from the experts that plans are using to catch up, pull ahead and pave new ground in the PDP market.

1. Leveraging Brand Partnerships

The discount card program that many PDPs were involved in prior to Part D appeared to position those organizations well for 2006, notes Marsha Gold, Mathematica Policy Research senior fellow and author of the studies. Nine out of 10 firms offering national PDPs either offered a prescription drug discount card in 2004-2005 or partnered with a firm that did.

Discount drug cards gave plans a customer base that was easy to convert, plus access to a sales channel to do it, Gary Donner, MMC 20/20 principal, tells Eli.

"The discount cards were really just a warm-up act for most of the players," Avalere Health's senior vice president, Bob Atlas, tells Eli. No one expected the discount card business to generate significant revenue, he says. The real return on plans' investment in a discount card program was the ability to position themselves with organizations that would help secure significant Part D enrollment and ensure a smooth transition into the new benefit.

For example, UnitedHealthcare previously collaborated with AARP to offer a Medigap product and eventually took on AARP's discount card program. Now, in its continuing relationship with AARP, UnitedHealthcare is offering a national AARP-affiliated PDP.

In addition, organizations that offered a full suite of managed care products in addition to prescription drug coverage appear to be in a better position for success, notes Atlas.

2. Expanding Plan Offerings

Plans that have historically dominated the MA program expanded their offerings in 2006, according to Gold's studies. "Humana, UnitedHealthcare, PacifiCare (which recently merged with UnitedHealthcare) and Blues' affiliates seem poised to compete most aggressively on a national scale for new Medicare business in 2006," Gold finds. "Each is offering PDP and MA plans designed to appeal to a range of beneficiaries."

The good news is that within a particular region, it's not that hard to put together an array of PDP offerings, encourages Atlas. Pharmacy benefits management firms can enable a relatively small organization to be in business on a fairly large scale, he notes. Plus, there's a lot more interest in the [...]