Health plan officials are still trying to determine just how the final rules for the new Medicare prescription drug benefit will affect them, because it appears that government officials tried their best to address the competing concerns of all players. The Centers for Medicare and Medicaid Services unveiled regulations on Jan. 21 that would allow insurers to end coverage for a drug or increase the copayment by giving 60 days notice to beneficiaries. On the other hand, insurers would have to provide extensive clinical and scientific reasons for those exclusions.
"We are in the process of reviewing the entire regulatory structure for both the prescription drug program and the Medicare Advantage program and commend CMS for working hard to create a sound regulatory framework...," says Karen Ignagni, CEO of America's Health Insurance Plans.
Medicare enrollees who do not currently have a prescription drug benefit may enroll in the new program in November. Coverage is expected to begin Jan. 1, 2006. On average, beneficiaries will pay about $35 a month in premiums, with a $250 annual deductible. Seventy-five percent of the next $2,000 in drug expenditures will be covered by Medicare. Then, the beneficiary will have to pay for the drugs until the expenditures reach $5,100. After that, Medicare pays for 95 percent of the costs.
The rules that determine which drugs will be covered are based on guidelines released by the United States Pharmacopeia. That organization says that there are 146 types of drugs that Medicare should cover and that beneficiaries should be offered coverage for at least two drugs in each of 41 categories.
The new CMS guidelines also outline the five possible ways beneficiaries may challenge drug exclusions. They include appeals to the health plan itself, to an outside organization serving as an arbitrator, to an administrative law judge, and to a panel under the Department of Health and Human Services — the Medicare Appeals Council. If all else fails, the beneficiary may file a federal lawsuit.
Exactly how the guidelines will work in practice remains to be seen.
"The law, the biggest expansion of Medicare since its creation in 1965, depends on private health plans to deliver the new benefit," the New York Times reports. "Insurers, eager to control costs, wanted to limit the number of drugs they must cover. Doctors, drug companies, and advocates for beneficiaries wanted to maximize the number. The government offered a compromise. It allows the use of formularies and says insurers must cover only one drug in a therapeutic category or class if only two drugs are available and one is clearly superior."