Beginning January 1, 2006, additional prescription drug coverage will be available to all Americans with Medicare. Every person with Medicare, no matter how they get their health care today or whether the have existing drug coverage, may obtain drug coverage under a Medicare prescription drug plan or a Medicare Advantage plan that offers drug coverage in addition to health insurance coverage. This program is known as Medicare Part D. Insurance companies and other private companies must be approved by Medicare to offer these drug plans. Medicare prescription drug plans will be available throughout the country, and plans may cover both brand name and generic drugs. Individuals currently receiving Medicare Part A (Hospital Insurance) and/or Medicare Part B (Medical Insurance) benefits have been sent information on the new prescription drug plan and the enrollment period has begun. In addition, individuals dually eligible for Medicare and Medicaid will be automatically enrolled in a Part D plan and will have drug coverage exclusively through Medicare Part D beginning January 1, 2006. This article will breakdown the key components of Part D, as well as the impact on the current coverage of plasma-derived and recombinant therapies under the Medicare program.

Background

Medicare (Part A and Part B) historically has covered certain drugs and biologicals, including therapies such as anti-hemophilic blood clotting factors, intravenous immune globulin (IVIG), and alpha1-proteinase inhibitors (A1PI). These therapies are covered under Medicare depending on the sight of service for which they are administered and other factors.

Coincident with other significant changes to the Medicare program, in 2003, Congress passed legislation, which expanded Medicare prescription drug coverage by creating Part D to meet the individual needs of the beneficiary. Current Medicare beneficiaries can enroll in a Medicare prescription drug plan between November 15, 2005 and May 15, 2006. If they join by December 31, 2005, their prescription drug plan coverage will begin on January 1, 2006. If they join after that, their coverage will become effective the first day of the month after the month they join. For example, if someone joins on April 15th, his or her coverage will begin May 1. Current beneficiaries that enroll after May 15, 2006, may be subject to premium penalties. In general, beneficiaries can join or change plans once each year between November 15 and December 31.

Medicare’s prescription drug coverage will offer financial assistance to beneficiaries with the cost of prescription drugs that are not paid under Medicare Part A or Part B. On average, Medicare estimates it will provide about $1300 in financial support to a beneficiary, although the benefit to a particular person will vary. Individuals who currently have Medicare coverage and or prescription drug coverage through an employer sponsored plan must be sure to evaluate their current coverage and costs versus the new prescription drug plans now being offered. Individuals must also determine if the drugs they currently receive are already covered under existing Medicare programs. For example, anti-hemophilic blood clotting therapies have been covered under the Medicare Part B program since 1984. Statutorily, blood-clotting factors will remain under Medicare Part B, and WILL NOT be covered under the new prescription drug plans.

Plasma-Derived and Recombinant Therapies

Drugs and biological therapies currently covered under existing Medicare programs, such as Part B, will continue to be covered under Part B, although some may also be offered by Part D plans. Blood-clotting factors, IVIG, and Alpha1 therapies are all covered under the Medicare Part B program. Blood-clotting factor therapies are covered exclusively under Medicare Part B without conditions. Since they will remain covered under existing Medicare coverage policy, they will not be covered under any of the new Medicare prescription drug plans. IVIG has been covered under Medicare Part B when the infusion is provided in a physician’s office or in the hospital outpatient department, provided that certain requirements are met (e.g., that the physician or hospital incurs the cost of the product). Beginning on January 1, 2004, Medicare began covering IVIG for home infusion, only for the diagnosis of primary immune deficiencies (PID). Alpha1 therapies continue to be covered under Medicare Part B in most circumstances when provided in a physician’s office and in the hospital outpatient setting. While these therapies are already covered under existing Medicare programs and would remain so, the new Medicare prescription drug plans may offer these therapies as well.

For example, since IVIG (other than for patients with PID) and Alpha1 are not covered when administered in the home, the Medicare Part D prescription drug program can provide a means for assisting in the cost of these products. It’s important to note that supplies, equipment and services involved in delivering home infusion are not covered under Medicare Part D. To ensure proper coverage of plasma-derived and recombinant therapies under Medicare Part D, beneficiaries should carefully review the coverage policy of each prescription drug plan being offered in their geographic area, paying attention to the applicable cost-sharing and out-of-pocket obligations, whether prior authorization is required, or other formulary limits apply.

Stimate® Coverage under Medicare Part D

For those individuals who require Stimate® nasal spray, coverage may be offered by prescription drug plans under Medicare Part D. Stimate® nasal spray is indicated for patients with mild hemophilia A, and for those patients with mild to moderate classic von Willebrand’s disease (Type I). Stimate® has never previously been a covered drug under Medicare Part A or Part B. However, it may be covered now under Medicare Part D, although whether it will be available depends upon its inclusion on each plan’s formulary. Since coverage for Stimate® will vary between prescription drug plans, it’s important to verify coverage with each plan, and to assess any cost-sharing and formulary limitations applicable to the product. Prescribing information for Stimate® can be obtained by clicking on the following link: Prescribing Information for U.S. Products.

Medicare Part D Basics

The Centers for Medicare and Medicaid Services (CMS) will make sure that all lists of drugs, known as formularies, include a broad range of medically appropriate drugs to treat all diseases and do not substantially discourage enrollment by certain individuals with Medicare

All plans will have an appeals and exceptions process if a non-formulary drug needs to be provided.

Formularies must include at least two drugs from each category and therapeutic class (if two drugs exist). Individual formulary classification structures have been compared to the United States Pharmacopeia (USP) Model Guidelines and other commonly used classification systems to ensure that plan formularies for 2006 include drugs from a sufficient breadth of categories and classes. Similar comparisons will be made each year as CMS approves Part D plans each year.

Individuals who have an existing Medigap policy with drug coverage will get a detailed notice from their insurance company explaining whether their prescription drug coverage is, on average, at least as good as standard Medicare prescription coverage. If their Medigap coverage is at least as good as Medicare’s coverage, and the individual decides to keep their current drug coverage, they may be able to buy a Medicare prescription drug plan later without having to pay a penalty.

Individuals who have prescription coverage from an employer or union will get notice from their employer or union that explains if their coverage is, on average, at least as good as standard Medicare prescription coverage:

If the employer or union plan covers as much as or more than a Medicare prescription drug plan, the individual with Medicare can; 1) keep the current drug plan and later enroll in a Medicare prescription drug plan later without paying a premium penalty, or 2) drop the current drug plan and join a Medicare prescription drug plan, but he or she may not be able to get the employer or union drug plan back.
If the employer or union plan covers less than a Medicare prescription drug plan, the individual with Medicare can; 1) keep the current drug plan and join a Medicare prescription drug plan for more complete prescription drug coverage, or 2) keep the current drug plan, although if the individual joins a Medicare prescription drug plan after May 15, 2006, he or she will have to pay at least 1% more in premiums for every month they waited to join after May 15, 2006, or 3) drop the current plan and join a Medicare prescription drug plan, but he or she may not be able to get the employer or union drug plan back.

Conclusions

The additional Medicare prescription drug coverage is to begin on January 1, 2006. This will be the first time since the inception of Medicare that beneficiaries will have an option to choose more complete prescription drug coverage through a variety of private insurance companies. Medicare eligible individuals must make sure prior to enrollment into any new Medicare prescription drug plan that their drug coverage needs are going to be met. Drug coverage and financial responsibilities should be carefully reviewed when choosing to enroll in a prescription drug plan. It’s also imperative that individuals weigh their options of current prescription drug coverage versus the new drug plans being offered by Medicare. Individuals should seek guidance from their healthcare providers, as well as reviewing their options available through Medicare’s website at www.medicare.gov, or by calling Medicare’s Toll-Free customer assistance line at 1-800-633-4227 for answers to any questions they may have.

ZLB Behring’s Reimbursement Answerline is available for further information regarding how the new Medicare Part D program will impact coverage for plasma-derived and recombinant therapies. Our Toll-Free Reimbursement Answerline can be reach by calling 1-800-676-4266.

REFERENCES

H.R. 1. One Hundred Eighth Congress of the United States of America. An Act (To amend title XVIII of the Social Security Act to provide for a voluntary program for prescription drug coverage under the Medicare Program, to modernize the Medicare Program, to amend the Internal Revenue Code of 1986 to allow a deduction to individuals for amounts contributed to health savings security accounts and health savings accounts, to provide for the disposition of unused health benefits in cafeteria plans and flexible spending arrangements, and for other purposes.

www.cms.hhs.gov/home/medicare.asp

ZLB Behring assumes no responsibility for the individual interpretation of any material, facts, or references provided within the context of its publication of Reimbursement alert.

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Reimbursement Alert December 2005

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