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Medicare Part D Popular Plans Face Final Hurdle in CMS Part D Call Letter

  • Date: 2015/02/19
  • Pharmaceutical Care Management Association - PCMA
  • Synopsis : Saga over Medicare Part D regulations expected to end when Centers for Medicare and Medicaid Services issues Part D Call Letter for 2016.

Main Document

After an initial uproar over a proposed regulation that threatened preferred pharmacy plans for millions of Medicare beneficiaries, CMS excluded such "controversial" provisions from its 2016 Final Part C & D Rule. With this week's Part D Call Letter, CMS can finally close the book on a year in which millions of seniors feared their plans would be eliminated.

Also called the Medicare prescription drug benefit, is a United States federal-government program to subsidize the costs of prescription drugs and prescription drug insurance premiums for Medicare beneficiaries. It was enacted as part of the Medicare Modernization Act of 2003 (which also made changes to the public Part C Medicare health plan program) and went into effect on January 1, 2006.

Medicare Part D plans are offered through private insurance companies that are contracted by Medicare, so costs and availability may differ between carriers and by location. Part D plans include stand-alone Prescription Drug Plans (PDPs) and Medicare Advantage Prescription Drug (MAPD) plans.

"A few years ago lower cost preferred pharmacy plans were an innovation - today they comprise the very foundation of Medicare Part D. Over the past year, legislators and regulators have learned a lot about these popular plans and this week's CMS Part D Call Letter should assuage seniors who fear their plans might still be at risk," said PCMA President and CEO Mark Merritt.

A recent analysis of CMS Part D 2015 enrollment data by Drug Channels shows that 81 percent of seniors and disabled people chose lower-cost plans with preferred pharmacies that offer convenient access and extra discounts at certain pharmacies. According to the latest data, 15.4 million beneficiaries enrolled in prescription drug plans with preferred pharmacies.

Research and polling highlight the value of preferred pharmacies in Medicare:

  • A survey conducted by Hart Research Associates shows that nine out of 10 seniors from urban, suburban, small town and rural areas have convenient access to these preferred pharmacies in Part D.
  • In 2015, almost nine out of 10 Part D plans will provide seniors the option of using a "preferred pharmacy" to lower their out-of-pocket costs.
  • Last year, the FTC wrote a letter to CMS on "any willing pharmacy" provisions included in the agency's Medicare Part D rule and warned that: "The proposed any willing pharmacy provisions threaten the effectiveness of selective contracting with pharmacies as a tool for lowering costs. Requiring prescription drug plans to contract with any willing pharmacy would reduce the ability of plans to obtain price discounts based on the prospect of increased patient volume and thus impair the ability of prescription drug plans to negotiate the best prices with pharmacies."
  • CMS data and a study from Visante find that access to preferred pharmacies in rural areas greatly exceeds Medicare's access standards.

Currently, most national Part D pharmacy networks include nearly all drugstores - almost 67,000 nationwide - giving beneficiaries access to more pharmacy locations than the combined number of McDonald's, Burger Kings, Pizza Huts, Wendy's, Taco Bells, Kentucky Fried Chickens, Domino's Pizzas, and Dunkin' Donuts across the country.

PCMA represents the nation's pharmacy benefit managers (PBMs), which improve affordability and quality of care through the use of electronic prescribing (e-prescribing), generic alternatives, mail-service pharmacies, and other innovative tools for 216 million Americans.

Quick Facts:

By 2008, nearly 90% of seniors had drug coverage at least as generous as the standard Part D benefit. Excluding premiums, annual out-of-pocket spending in the 10 largest Part D plans was comparable to that of other private and public drug benefits, with the most prominent differences attributable to out-of-pocket spending on drugs not covered in the plan. Poorer beneficiaries have gained the most from Part D in terms of increased access to medications and reduced out-of-pocket spending.


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