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Reproduced with permission from BNA's Medicare Report, Vol. 17, No. 10, pp. 332-333 (March 10, 2006).
Copyright 2006 by The Bureau of National Affairs, Inc.
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Part D Drug Benefit

Drugmaker Patient Assistance Programs Seen Remaining Important for Low-Income Groups

While the Medicare Part D drug program is a great benefit for certain types of beneficiaries, "for people with limited incomes, this benefit is not affordable," leaving a large role for pharmaceutical manufacturers to continue to provide help through patient assistance programs (PAPs), a health care strategist said March 6.

Many drug manufacturers are adjusting their PAP models to help financially needy Medicare beneficiaries who do not qualify for a low-income subsidy and who cannot afford Medicare Part D's cost-sharing benefit, Tracy Foster, senior vice president of policy strategies for Lash Group, a health care reimbursement consulting firm, said.

Manufacturer PAPs are helping to facilitate beneficiary enrollment in the Part D low-income subsidy, Foster told attendees at the Center for Business Intelligence's annual Patient Assistance Programs conference in Baltimore.

Foster highlighted four critical access issues for drug manufacturers: the low-income subsidy (LIS) for Medicare Part D drug coverage, low levels of enrollment in the drug benefit, drug plan utilization management policies, and affordability of the benefit.

Low Enrollment.

Enrollment in the LIS lags because of poor outreach, Foster said. As of Jan. 27, only 1.4 million applicants were approved for the LIS by the Social Security Administration, or less than 20 percent of the total number eligible.

Although the complexity and number of Part D plan options share some of the blame for the low enrollment, "intensive case management and enrollment assistance" is needed to achieve the highest enrollment in LIS, she said.

Manufacturer PAPs are "critical pathways" to LIS access, according to Foster. She said manufacturer programs facilitated LIS enrollment for 73 percent of beneficiaries targeted, much higher than the SSA's enrollment rate.

Manufacturers also can help educate providers and patients about drug plan utilization controls such as step therapy or prior authorization. With more than 380 approved Part D formularies, many beneficiaries do not fully understand or have access to information regarding a drug plan's utilization management practices, Foster said.

'Doughnut Hole.'

Modeling a beneficiary's true out of pocket expenses (TrOOP) is key to understanding the issues of access and affordability, Foster said. TrOOP reflects the amount a beneficiary must spend on covered Part D drugs to reach catastrophic coverage, including the initial deductible, copayments during the initial coverage period, and payments during the coverage gap known as the "doughnut hole" ($2,250 to $5,100 of drug costs).

Foster said a recent model conducted by her company to simulate TrOOP scenarios for Alzheimer's patients under 12 common drug plans showed that patients would enter the doughnut hole after about six months, and remain in the coverage gap for at least four months. In other words, the Alzheimer's patient would be fully responsible for their prescription drug costs for at least four months before they were eligible for catastrophic coverage under Part D.

Many financially needy beneficiaries look to manufacturer programs to address the issue of affordability, she said. Manufacturers are helping through updating PAP applications and completing LIS applications on behalf of patients.

Needed Assistance.

Drug manufacturers are adjusting their PAPs to provide needed assistance in the new Part D environment, Foster added.

The current structure of many manufacturer PAPs likely will run afoul of fraud and abuse statutes, according to Vanessa Duran, a Centers for Medicare & Medicaid Services official in the agency's Division of Drug Plan Policy, Medicare Plan Policy Group.

However, PAPs may continue to provide assistance to Part D beneficiaries, provided they follow recent guidance from the Department of Health and Human Services Office of Inspector General (17 MCR 98, 1/20/06).

The OIG guidance provides for coordinated assistance with the Part D model, allowing manufacturers to provide financial assistance to independent charity organizations, Duran said. Drug producers also may provide direct assistance to enrollees that is completely separate from their Part D benefit.

More information is at http://www.cbinet.com/show_conference.cfm?confcode=HB627.