Medicare Compliance & Reimbursement

Enrollees must jump through contingency hoops to obtain non-formulary drugs.

Prescription drugs that dual eligibles could once access easily through Medicaid are now hard to find together on the same Medicare drug plan.

Only 18 percent of enrollees' Part D plans cover all of the drugs the dual eligible population used most in 2005, according to a report the HHS Office of Inspector General released Jan. 25.

The report identifies the top 200 prescription drugs that the dual eligible population used in 2005. Statutory exclusions omit 22 of those drugs from Part D plans, and less than one in five plans cover all of the remaining 178, the report finds. In addition, contingency plans the Centers for Medicare & Medicaid Services put in place to ease dual eligibles' transition from Medicaid require knowledge and initiative many enrollees lack. "Given the medical and resource challenges faced by this population, dual eligibles may need targeted assistance, in addition to the efforts CMS and state Medicaid agencies have already undertaken, to successfully navigate the transition from Medicaid to Medicare coverage," says the OIG.

Broad Distribution Among Formularies Dilutes Drugs' Availability

Only 19 percent of the 37 formularies the OIG reviewed include all of the 178 drugs dual eligibles used most in 2005. About one in five PDPs includes 151 or fewer (less than 85 percent) of the 178 drugs that dual eligibles commonly use on its formulary. In contrast, nearly one in three dual eligibles is enrolled in one of these PDPs. The lowest-ranking formulary includes only 135 (76 percent) of the drugs in the OIG's review.

Nevertheless, contingencies are in place to protect dual eligibles' access to the drugs they need. CMS has pressed PDPs to provide benes with a one-time supply of a nonformulary drug to ease the transition from Medicaid to Medicare drug coverage. In addition, at least one plan in every PDP region includes all 178 drugs on its formulary, the report shows. This affords every dual eligible the opportunity to switch to a plan with a more comprehensive formulary. Dual eligibles without access to a specific drug can also obtain a prescription for a different drug within their current PDP's formulary that treats the same condition. Or they can apply for a formulary exception if the drug they need is medically necessary.

The pervasiveness of individual drugs among PDP formularies is slightly more broad, the report shows. In relative terms, most of the drugs the OIG identified are available on most PDP formularies. On average, any one drug is available in 92 percent of the survey's formularies, and the lowest-ranking drug is available in 43 percent of the survey's formularies. More than half of the 178 drugs the OIG identified are available on all 37 formularies in the survey.

But again, there's more to the story. Some formularies omit particular drugs more than others, according to the report. Nearly 12 percent of the 178 drugs were unavailable on one-fourth of the survey's formularies. CMS asserts that it has reviewed all Part D plan formularies to verify that they comply with minimum requirements, noting that plans may opt to include only one of many similar drugs for cost containment purposes.

Statutory Exclusions Keep Some Drugs Under Medicaid

Statutes exclude 22 of the 200 drugs the OIG originally identified from Part D coverage. These drugs fall into specific drug categories that state Medicaid programs can cover for dual eligibles. All 47 states the OIG interviewed provide coverage for "at least some" excluded drugs, the report points out. But dual eligibles in 45 of these states will continue to have access to their Medicaid drugs after they've switched to the Medicare drug plan, says the OIG.

CMS Challenges OIG's Scope And Methodology

CMS criticizes the report's methodology and scope in its Jan. 23 response letter. "[The report] does not provide direct evidence on the extent to which full-benefit dual eligibles are assigned to plans that cover their drugs," says CMS Administrator Mark McClellan. CMS conducted a separate analysis that measures formulary coverage at the beneficiary level. Nevertheless, the methodology the agency used produced "remarkably similar" results, which the OIG asserts to support its findings.

To view the full OIG report, visit www.oig.hhs.gov/oei/reports/oei-05-06-00090.pdf.