Understanding the effects of Medicare Part D from key stakeholders' perspectives: Important progress, but abundant research opportunities remain
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Research in Social and
Administrative Pharmacy 6 (2010) 85–89
Editorial
Understanding the effects of Medicare Part D from key
stakeholders’ perspectives: Important progress,
but abundant research opportunities remain
The Medicare Prescription Drug, Improve- pocket costs and increased drug use for individuals
ment, and Modernization Act of 2003 added in the highest pre-Part D spending group, relative
prescription drug coverage to Medicare beginning to individuals in the moderate and lowest pre-Part
in January 2006. The prescription drug coverage is D spending groups. This finding suggests that
voluntary, although beneficiaries face a significant Part D helped the beneficiaries who most needed
penalty for delaying enrollment. The drug cover- help, the beneficiaries with high pre-Part D costs.
age is provided through private drug plans; Goedken et al2 compared prescription drug cost
beneficiaries have a choice of staying in the sharing for Part D plans and employer-based
original Medicare program and receiving separate PDPs; they also examined effects of that cost shar-
prescription drug coverage from a Medicare pre- ing on prescription drug use. They found that brand
scription drug plan (PDP) or receiving all their name drug copayments were higher for beneficia-
Medicare benefits though a private Medicare ries in Part D plans than for beneficiaries in
Advantage plan with prescription drug coverage employer-based plans, but copayment level did
(MA-PD). The Centers for Medicare and Medic- not significantly predict the number of prescrip-
aid Services (CMS) is responsible for administer- tions used by beneficiaries. An important compo-
ing this very complex program. Medicare Part D nent of prescription drug cost control is use of
has dramatically reshaped the prescription drug generic drugs. Goedken et al2 also examined how
insurance market and has had significant effects generic drug utilization rates differed before and
on insurers, beneficiaries, and providers. For after Medicare Part D and across insurance type
researchers, it has provided a rich source of post-Medicare Part D. They found that generic
research questions to examine. This themed issue utilization was lowest among beneficiaries in
includes 7 articles in which researchers examine employer-based plans both before and after Part
aspects of Medicare Part D from a variety of key D. Post-Medicare Part D, generic utilization
stakeholder perspectives. rates among Part D beneficiaries were higher than
One important outcome of Medicare Part D is beneficiaries in employer-based plans and not sig-
its effects on prescription costs, addressed in this nificantly different from beneficiaries with no pre-
themed issue by Mott et al1 and Goedken et al.2 By scription drug insurance coverage.
expanding access to prescription drug insurance, Medicare Part D has presented both challenges
Medicare Part D was expected to increase prescrip- and opportunities for pharmacies and pharmacists.
tion drug utilization and overall expenditures but One opportunity is that it provided prescription
decrease beneficiary out of pocket costs. Mott et insurance to some previously uninsured Medicare
al1 examined whether these effects differed by levels beneficiaries, potentially increasing access to pre-
of pre-Part D drug spending. They concluded that scription drugs and the volume of prescriptions
Part D significantly reduced beneficiary out-of- dispensed by community pharmacists. A challenge
has been the increased workload for pharmacists;
*Correspondence author. S519 Pharmacy Building, partially because of not only the increased pre-
University of Iowa, Iowa City, IA 52242, USA. Tel.: scription volume but also the time spent helping
þ319 335 8616; fax: þ319 353 5646. beneficiaries navigate the Part D enrollment pro-
E-mail address: julie-urmie@uiowa.edu cess and manage Part D plan benefit structures,
1551-7411/$ - see front matter Ó 2010 Elsevier Inc. All rights reserved.
doi:10.1016/j.sapharm.2010.04.00486 Editorial/Research in Social and Administrative Pharmacy 6 (2010) 85–89
such as tiered copayments and utilization manage- their contracts by including a generic dispensing
ment requirements. The article by Bono and rate bonus or payment for MTM services.
Crawford3 in this issue compared similarities and Beneficiary experiences with Medicare Part D
differences in chain pharmacist and independent are another important aspect to consider. Medicare
pharmacist experiences during the Medicare Part Part D improved access to prescription medications
D implementation. They found that both chain for beneficiaries who were previously uninsured,
and independent pharmacists strongly criticized and it gave some beneficiaries access to MTM
the implementation process, but thought that Part services. However, beneficiaries face critical and
D benefited beneficiaries who previously lacked potentially challenging decisions related to Part D.
prescription drug coverage. There were some differ- Because Part D is a voluntary benefit, the first
ences between chain and independent pharmacist decision beneficiaries face is whether to enroll in
experiences; specifically that independent pharma- Part D. If they decide to enroll, they must decide
cists expressed more concern about their future whether they want a PDP or an MA-PD and choose
viability, whereas the chain pharmacists felt that from the large number of both types of plans that
their corporate support gave them a competitive are available. In this issue, Cline et al10 examined
advantage and a better long-term financial picture. factors associated with Medicare beneficiaries’ de-
Another challenge for pharmacies has been the cision to enroll in any Part D plan and factors asso-
reimbursement from the Part D plans. Since the ciated with the choice of an MA-PD plan given
drug benefit’s implementation, pharmacies have a choice to enroll in Part D. They surveyed adults
been complaining about ‘‘low and slow’’ reim- age 65 and older residing in the CMS region 25;
bursement from the Part D plans.4-6 Part D caused the 7-state region that includes Minnesota, Iowa,
some cash patients and all patients who were dually North Dakota, South Dakota, Nebraska, Mon-
eligible for Medicare and Medicaid to transition to tana, and Wyoming. Factors affecting the decision
Part D. This resulted in loss of margin because to enroll in Part D were rurality, plan price, per-
Medicare Part D prescription margins have been ceived future need for medications, and prefer-
reported to be the lowest among the third-party ences. They found that respondents were more
payers.7,8 Another challenge for pharmacists is than 3 times as likely to choose PDPs compared
the length of time to receive payment from Part D with MA-PDs; selection of MA-PD plan was re-
plans,4 although this complaint theoretically has lated to rurality, state of residence, and number of
been addressed by the Medicare Improvements diagnosed medical conditions.
for Patients and Providers Act (MIPPA) of 2008. The MTM services mandated for targeted
This law took effect in 2010 and requires Part D beneficiaries as part of Medicare Part D has
plans to pay clean claims with 14 days. In this issue, been a new benefit for many Part D enrollees
Zhang et al9 describe independent pharmacists’ sat- and an opportunity for pharmacists. Targeted
isfaction with third-party contracts. The authors beneficiaries are those beneficiaries who are ex-
surveyed independent pharmacy owners in six pected to incur high drug costs. Determination of
Medicare regions to identify influences on satisfac- targeted beneficiaries is made by the individual
tion with their most and least favorable Part D con- plans but is subject to rules published by CMS.
tracts. Overall levels of satisfaction with Part D Sometimes the MTM services are provided by
contracts were low; with the most common com- pharmacists or other health care providers em-
plaints being too low reimbursement rates and ployed by the Part D plans, while other times they
‘‘take it or leave it’’ contracts. They found a differ- are provided by community pharmacists. The
ent set of significant influences on satisfaction with method for MTM delivery also has varied con-
the most and least favorable contracts. For the siderably, from educational mailings, to telephone
most favorable contracts, contending (use of coer- consultations, to face-to-face consultations. MTM
cive tactics) and equity (fairness) were significant. services typically are new to beneficiaries, so it is
For the least favorable contracts, negotiation, important to measure their satisfaction with the
equity, generic rate bonus, and payment for medi- different MTM programs. In this issue, Moczy-
cation therapy management (MTM) services were gemba et al11 describes patient satisfaction with
significant. The authors concluded that over the a pharmacist-provided MTM program. The au-
long-term, this low level of satisfaction with Part thors surveyed enrollees in one Part D plan who
D plans could result in increased contract rejections had received MTM services from pharmacists
by independent pharmacists. They also concluded via the telephone. They found that beneficiaries
that Part D plans could improve satisfaction with were generally satisfied with their MTM services,Editorial/Research in Social and Administrative Pharmacy 6 (2010) 85–89 87
especially with their access to a pharmacist likely because of adverse selection. The health care
through the MTM program. reform laws passed in 2010 phase in coverage of
It is useful to study Medicare Part D from drugs during the coverage gap and will close the
a variety of perspectives, including CMS, Part D gap by 2020. Beginning in 2011, pharmaceutical
plans, providers, and beneficiaries. This themed manufacturers will pay 50% of brand name drug
issue adds to our understanding of issues facing costs. It will be interesting to examine whether
these stakeholders, but more research is needed. this subsidy encourages Part D plans to offer ad-
One important aspect of Part D from many ditional gap coverage until the full gap coverage
perspectives is cost. Although Part D has cost is phased in. Researchers also can examine the
less than projected, premiums costs have been point at which the phased-in benefits are success-
rising each year with an average increase of 50% ful at eliminating the identified adherence and ac-
since 2006.12 The release of Part D with detailed cess problems associated with the coverage gap.
information on benefit design should allow re- Low-income beneficiaries are an important
searchers to examine more closely what aspects population to study. Drug coverage for beneficia-
of plan benefit design are most effective at control- ries who are dually eligible for Medicare and
ling costs and improving patient outcomes. Medi- Medicaid was transitioned from Medicaid to
care Part D has a standard benefit structure, but Medicare Part D when Medicare Part D was
plans are allowed to deviate from this structure implemented. Dually eligible beneficiaries and
as long as the value of their plan is actuarially some other low-income beneficiaries have gener-
equivalent to standard benefit. Only about 10% ous subsidies and much lower cost sharing than
of plans use the standard benefit structure so there other beneficiaries, but they still have faced some
is wide variation in the amount of patient cost challenges with the benefit. Dual eligibles pay no
sharing.13 Formularies and use of utilization man- premiums as long as they choose one of the
agement strategies like prior authorization, step, ‘‘benchmark’’ plans with $0 premiums for low-
therapy, and quantity limitations also vary widely income beneficiaries. However, the number of
across plans.14 This variation lends itself to re- benchmarks plans has been decreasing.6 Also,
search on the effect of benefit structure on cost dual eligibles who do not choose a plan are ran-
and patient outcomes, such as adherence and clin- domly assigned to one of the benchmark plans
ical outcomes. The variation also has the potential in their region. This may result in their being in
to cause adverse selection across plans, where ben- a less than optimal plan. Another issue with
eficiaries who have higher (or lower) drug costs low-income beneficiaries is that some beneficiaries
than average disproportionally enroll in certain who are not dual eligible, but who qualify for
types of plans. This adverse selection is of concern other low-income subsidies, have not enrolled in
to plans, who fear attracting large numbers of Part D. Because the low-income subsidies are
high-cost beneficiaries. Although risk adjustment quite generous, it is important to better under-
and risk sharing by CMS may mitigate the costs stand why they are not enrolled.
of adverse selection to the plans, it still is of con- To date, there have been large numbers of Part
cern and needs further study. D available in all regions, typically 40-55 different
A unique feature of Medicare Part D is the plans per region.12 A benefit of the large numbers
coverage gap, or ‘‘doughnut hole,’’ where benefi- of plans is that beneficiaries have the opportunity
ciaries who do not qualify for low-income assis- to choose the plan that best meets their needs.
tance must pay the full cost of their medications However, a significant challenge is that it makes
after they exceed the initial coverage limit. Part D the process of choosing a plan confusing and la-
plans are allowed to offer enhanced plans with bor intensive. There is some evidence that benefi-
coverage of drugs in the gap, but the cost of these ciaries have been reluctant to change plans.19 The
extra benefits is not subsidized except for benefi- decision to have Part D benefits provided by pri-
ciaries who qualify for low-income assistance. The vate plans that compete in the market was made
coverage gap has had documented effects on in part to harness the power of a competitive mar-
patient adherence and costs,15-17 but more re- ket to lower prices. If beneficiaries choose to stay
search is needed to understand fully the impact in plans with large premium increases when they
of the coverage gap on patient outcomes. Adverse could switch to a less expensive plan, the ability
selection has been a significant problem for these of the competitive market to control costs may
enhanced plans. Coverage of brand name drugs be compromised. It is critically important to bet-
during the coverage gap has almost disappeared,18 ter understand how beneficiaries choose a plan,88 Editorial/Research in Social and Administrative Pharmacy 6 (2010) 85–89
to design strategies to help beneficiaries select the Julie M. Urmie, Ph.D.*
plan the best meets their needs and not fear William R. Doucette, Ph.D.
switching. This would help the beneficiaries and Department of Pharmacy Practice and Science
make the market perform better. The Cline et University of Iowa College of Pharmacy
al10 article in this issue helps understand choices Iowa City, IA, USA
between PDP and MA-PD plans; the next step is
to determine how beneficiaries choose among dif-
ferent PDPs or MA-PDs. As part of this process, References
researchers must determine the level of beneficiary
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