Medicare Part D: What to look for in 2008

The cost of administering vaccines covered by Part D will be the responsibility of the Medicare drug plans.

Issue: December 15, 2007

ByWilliam D. Rogers, MD, FACEP

William D. Rogers

Next year will mark the third year that prescription drug coverage is available through the Medicare program. Although the Part D program has been challenging for some providers, it has been a success for both beneficiaries and taxpayers.

In 2007, more than 90% of people with Medicare signed up for Part D or had creditable coverage, and a recent survey found that 85% of beneficiaries were happy with the program. The program is good news for taxpayers as well: The 10-year cost of Part D has turned out to be $200 billion less than original estimates, primarily because of competition among Medicare drug plans and the increased use of generic drugs. The average national monthly premium in 2008 is expected to be $25 (40% lower than the initial estimate), and people with Medicare prescription drug coverage are saving an average of $1,200 per year.

One reason that Part D costs are lower is that Medicare drug plans are competing for beneficiaries in a price-sensitive environment. Consumers can go to Medicare’s Web site (www.medicare.gov) and use the user-friendly “plan compare” Web tools to figure out exactly which of the competing Medicare drug plans can supply them with their medications at the lowest price. Because the market is so price-sensitive, plans have had to aggressively control their costs. They have demanded lower prices from drug manufacturers and created formularies that encourage consumers to use brands that are less expensive to obtain. As a practicing physician, I know just how much of a hassle these formularies have been, but using the free Epocrates software on my PDA (which is available at www.epocrates.com/products/rx/) has allowed me to adapt my prescribing patterns to fit various plan formularies without too much trouble, thereby avoiding the need to file appeals.

Open enrollment for Medicare Part D occurs every year from Nov. 15 to Dec. 31. All Part D beneficiaries are eligible to join, switch or drop their Medicare drug coverage during this period. Once this open enrollment period ends, most Medicare patients are locked into their current plan until the end of the year. New Medicare beneficiaries who “age in” to the Medicare program will of course be able to join a Part D plan when they become eligible, and people with limited income (those receiving Medicaid or SSI or who applied and qualified for the low-income subsidy) can change plans any time during the year.

Some of your patients who have limited incomes may still qualify for the low-income subsidy, which can help them pay for Medicare Part D. Patients with annual income of less than $15,355 (individual) or $20,535 (couple) should call Social Security at 800-772-1213 or go to its Web site (www.socialsecurity.gov/prescriptionhelp/) to see if they qualify for this extra help, which covers a significant amount of the cost of the benefit.

This is what you can expect for 2008.

Vaccine coverage

Until 2006, Medicare Part B was only permitted to pay for four vaccines: pneumococcal vaccine, flu, hepatitis B for patients at increased risk and tetanus when given as a part of the treatment of a traumatic wound. Part D came along in 2005, and most vaccines became Medicare-covered. However, there was no legal basis to pay for the administration of these “Part D” vaccines. On Dec. 20, 2006, President Bush signed the Tax Relief and Health Care Act, and among its provisions was legal authority for Medicare to pay for the administration of the Part D vaccines. This new benefit will be implemented in stages. This year, physicians have been able to bill their Part B carrier for the administration fee, but next year they will no longer be able to do so. Beginning in 2008, the cost of administering vaccines covered by Part D will be the responsibility of the Medicare drug plans. Most physicians will probably elect to bill their patients for the vaccine and the administration, and patients will have to submit a claim to their Part D plan for reimbursement. Network pharmacies operating in states that allow pharmacists to administer vaccines will be able to bill the Part D plan directly if they administer a vaccine to a covered beneficiary. Both the vaccine and the administration fee for the Part B vaccines mentioned above will continue to be covered under Part B and billed to Medicare.

For patients who change plans

Table 1 lists the steps we have taken to ensure that patients who change plans continue to get their medications during the transition period. New plans must provide patients with at least a 30-day supply of any medication covered by their previous plan. The new plan must also initiate notification processes to give patients time to either get a new prescription for a comparable drug covered by the new plan or to file an exception request.

For more information:

William D. Rogers, MD, FACEP, director of the Centers for Medicare and Medicaid Services physician’s regulatory issues team, can be reached at the Office of the Administrator, CMS/HHS, Room 314-G, 200 Independence Ave. SW, Washington, D.C. 20201; 202-690-5907;e-mail: william.rogers@cms.hhs.gov.