Tom Kaye, RPh, MBA

Initially, Part D offered so much to so many who needed help. Now the program is straining under its own weight.

Tom Kaye, RPh, MBA

Should we be surprised that a government program is more costly to run than a private entity?*

When Part D was proposed, the intention was to stimulate competitive market forces that medical care had not seen before, and to drive the cost of medications down by competitive bidding. In addition, manufacturers’ access to enrollees would be limited. This was a great concept that initially worked.

The administrative needs for prescription drug plans set up under Part D were challenging, but as the years rolled on, more administrative burdens were added. Medicare Part D continues to work, but the government has erected barriers to efficiency.

Almost three years after the launch of Part D, we have a robust prescription drug history that can serve as a source for utilization research, and side-effect monitoring that will lead to new opportunities to identify drug-to-drug interactions. Further to the point, we can look at the data to determine medication adherence and determine how much health improvement could be made.

What price?

But at what price? During Part D’s evolution, the program’s complexity has increased with formulary filings and other administrative/operational issues.

In the beginning, it had six protected drug classes, which included a substantial number of individual drugs. These were well thought through, and were based on clinical knowledge of the drug category and the need for robust choices to expand the variability for certain disease states. But step edits, prior authorizations, proxy files, and drugs selected for preferred listing, along with duplicative efforts in operations, have strained the Part D program, making it cumbersome for pharmacy benefit managers and plans to respond to formulary changes or management needs.

For example, the seemingly simple task of generating a denial letter for a medication that is not covered requires hours of resources and multiple departments. Any communications to members must be approved by the Centers for Medicare & Medicaid Services (CMS). Template letters containing approved language can be used, but without modification the letters may not be easily understood by the members. Vague or unclear letters generate phone calls to member services, adding to the resource needs for the part D program.

As the Part D program evolves, the administrative burden for sponsor plans grows. Frequent last-minute rule changes, often indecisive guidance, and the avalanche of CMS rules and guidance transmittals all nip away at the sponsors’ resources. This adversely affects the sponsors’ yearly bid.

Bureaucracy is punishing a program that has offered so much to so many who need help in accessing medications.

The aspects of unintended consequences has crept into the Part D program, which was initially designed to perform well, but now appears to be hindered by undue actions that don’t contribute to the tasks of medication supply to the Medicare recipients.

Tom Kaye, RPh, MBA, is senior pharmacy director of Passport Health Plan in Louisville, Ky., and a member of MANAGED CARE’S Editorial Advisory Board.

*See “The Formulary Files” in our May 2008 edition: /archives/2008/5/pdp-drug-costs-are-higher-employer-plans

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.