Medicare D-lemmas

Patient Perspectives

Patients, even those who benefit from Part D prescription drug coverage, encounter many of the same frustrations that face their rheumatologists. Phyllis, a retired New York teacher with RA now living in California, has worked out a plan that combines Part D coverage with her New York retirement coverage to handle the financial costs, but she is frustrated with Part D’s restrictions on self-injections and infusions and the prior authorization required for oral medications. She considers herself fortunate to be in good health except for RA, but she thinks the administration of Part D is unnecessarily complicated.

Another patient, Chuck, turned to his state—Illinois—seeking prescription drug coverage and discovered that once he proved he qualified, state coverage was more comprehensive and less confusing than signing up for Part D,so he chose not to enroll. However, Chuck manages a support group for arthritis patients and tries to help his members navigate through Part D enrollment.

He reports that his members find Part D extremely confusing. Many, for example, do not understand that Part D is renewed each year and that, therefore, the doughnut hole (the gap in coverage during which all of the expensive rheumatic medications are paid for out-of-pocket) reappears annually—knowledge gaps are as widespread as doughnut hole gaps, he notes.

One of the most commonly mentioned concerns of rheumatologists is their perception that following Part D guidelines may interfere with the practice of medicine and their ability to provide optimal patient care using the most appropriate medications (within cost-containment guidelines) for each patient.

Rheumatologists in particular use medications that don’t fall neatly into government guidelines. These drugs have more than one indication, are often expensive, and may be used on a long-term basis. Any or all of these factors may make prescribing a challenge—a drug may not be listed in a formulary or may require extra paperwork for coverage. Such problems begin with the questions of generic equivalents, cost-sharing requirements, and drug formularies in general.

Generic Drugs

Many rheumatologists say their treatment choices are compromised when the plan coverage requires automatically switching to a generic form of a medication or a less expensive treatment option. “Forcing a drug choice to be a generic equivalent may be acceptable,” says Fredrica Smith, MD, “but it should be a medical decision, not a government mandate.”

Dr. Smith, who, with the aid of a nurse practitioner, maintains a solo practice that serves the entire northern half of New Mexico, believes the “system discriminates against those with chronic disease.” Because 40% of Dr. Smith’s practice load is eligible for coverage under Part D, she is familiar with the problems of an aging population with chronic disease.

Christopher Morris, MD, objects to using generic drugs simply to meet the coverage requirement. Dr. Morris is part of a practice that includes three physicians and five physician’s assistants, working out of Kingsport, Tenn., and covering a large area of southern Appalachia. He and his colleagues serve both an urban area and a more rural community.

Dr. Morris is dismayed that so many patients are asked to switch to a generic brand even though their current treatment is quite successful. “I am shocked by the number of patients requiring prior authorization for state-of-the art medications that have been successfully treating their conditions all along,” says Dr. Morris.

John Goldman, MD, a solo practitioner in Atlanta, also takes a strong stand on the question of generic drugs. He questions the testing procedures for determining the equivalency of a generic drug. “Generic drugs are tested by normal, healthy volunteers—not patients,” claims Dr. Goldman. “The generic drug can’t automatically be assumed to be a satisfactory substitute.”

His opinion of generic equivalency can be summed up with the question in the title of his article in the ACR Practice View: “Generic Drugs: Should bioequivalence be equated with therapeutic equivalence?”¹

Cost Sharing and Drug Formularies

Rheumatologists must work with cost-sharing systems and utilization management tools daily, and working with the formularies can be a daunting task. In the first place, Medicare’s private, stand-alone plans vary significantly in regard to covered drugs, out-of-pocket co-payments for certain medications, and restrictions on the use of certain medications.

Part D is designed to encourage competition among its approved benefit plans in order to foster cost-effectiveness, and so far this outcome is being met. However, the burden of sorting through all of the choices and selecting the best plan for an individual’s needs falls on the patient—and secondarily upon the doctor who must provide optimal medical care within the limits of the chosen plan.

Not only does the clinician need to work with a formulary of pre-approved drugs, but he or she must also consider the cost-sharing requirements for the given drugs. For example, the most common cost-sharing arrangement is a three-tier system of co-payments: the lowest co-pay for generics (tier 1), a higher co-pay for preferred brands (tier 2), and the highest co-pay for non-preferred brands (tier 3).

However, many plans use a “specialty tier” for biologic or injectable drugs—some of which are successfully used to treat RA. While the CMS guidelines recommend charging beneficiaries no more than 25% of the cost of these specialty tier drugs, several plans impose a specialty tier charge between 30% and 33%.

Jack Hoadley, PhD, a research professor at the Health Policy Institute of Georgetown University in Washington, D.C., has completed an in-depth study of formularies and Medicare plans. He includes a detailed explanation and table of the TNF inhibitors in his paper, “An In-depth Examination of Formularies and Other Features of Medicare Drug Plans.”²

“Fourteen of the plans studied offered different levels of coverage so they have the flexibility to make things more or less expensive,” says Dr. Hoadley. “As one analyst put it, this plan is like a roller coaster—up and down and starting over every year.”

Further, utilization management tools—prior authorization, quantity limits, and step therapy—can also have a negative effect on drug costs for rheumatology patients. Again, in an effort to contain costs, some plans impose quantity limits and step-therapy programs (requiring patients to take a less expensive drug before receiving a more expensive alternative). These cost-containment efforts impose yet another restriction on the prescribing rheumatologist.

Prior Authorizations

By far the frustration most often mentioned by the rheumatologists seems to be the need for prior authorization to use a drug not on a plan’s formulary. Some of these problems exist because of confusion between coverage from Medicare Part B and Medicare Part D. For example, a prescription may be refused under Part D because it is an injectable or infusion or administered by a physician and therefore should be covered under Medicare Part B.

One of Dr. Morris’ patients encountered such a problem. The insurance plan refused to cover an infusion in the physician’s office and instead insisted that the patient go into the hospital in order to get the infusion covered. The patient had to find and pay for parking and then wait three hours for the procedure. The entire procedure cost three times as much in the hospital setting as it would have in Dr. Morris’ office. Dr. Morris and his patient complained to the insurance company, and the protocol changed.

Another common problem is obtaining prior authorization for drugs used in rheumatology that are also used in cancer treatment and transplantation, where they are covered by Medicare Part B. Having to obtain prior authorization is so common that a solution has been developed. Dan Fohrman, MD, of Bend Memorial Clinic in Bend, Ore., has worked as chair of a Regional Advisory Council for the ACR in conjunction with the CMS Physicians Regulatory Issues Team (PRIT) to propose a solution to this problem.

According to Dr. Fohrman’s solution, physicians are now instructed to write “Rheumatology Part D” directly on the prescription form for these particular drugs. PRIT agreed to inform insurers about this idea, but so far not all of the insurers are aware of the solution.

In March 2006, PRIT issued another directive, but the problem of disseminating the wording on the prescription form now seems to lie with the pharmacies. Neither CMS nor the insurers have told all pharmacists—particularly independent pharmacists—about PRIT’s directive. “The layers of communication are numerous, and there is not enough incentive for insurers to spread the word,” says Dr. Fohrman. “So far, there is no consequence if they don’t comply.”

Confusion about Authorization Rules

Many rheumatologists believe the need to obtain prior authorization on so many rheumatic drugs grew from a lack of knowledge about rheumatic disease on the part of those designing the individual benefit plans. Gerald Eisenberg, MD, director of rheumatology at the Illinois Bone and Joint Institute in Des Plaines, describes the prior authorization problem as having a “hassle factor,” but he is more confused about why so many commonly used drugs require prior authorization. He thinks the reason may be a lack of interest in or an emphasis on cost-effectiveness.

Yet, some Part D plans require authorization for inexpensive drugs, such as prednisone. This confusion and inconsistency led Dr. Eisenberg to a straightforward view of the pre-approval process. “This is another layer of hassle with no purpose. Patients should get what they need with less hassle factor,” he says.

Alfred Denio, MD, a rheumatologist at the Center for Arthritis and Rheumatic Diseases in Norfolk, Va., agrees. “There is usually a good reason a doctor does not use a drug on a formulary list [and instead uses] one that is already working but not on the list,” he claims. “The reason is comorbidity.”

Like most rheumatologists, Dr. Denio has patients who, because of their age, are being treated for several diseases that are often chronic. For example, a patient with RA, diabetes, asthma, heart disease, and high blood pressure needs a carefully balanced drug regimen for effective treatment and safety. The choice of medication for any one problem, therefore, may not be an easy decision—nor can it be a decision dictated by an insurance drug formulary.

Logistical Questions Remain

In addition, the prior authorization process itself causes logistics problems. A patient can appeal a drug denied by his or her plan and can also request a reconsideration (level 2) appeal on a denied Part D claim. This is the point at which the patient can appoint the physician to represent him or her in the claim, which requires a form signed by both the physician and the patient that is good for one year.

One of the early complaints is that patients in rural areas, such as those in Dr. Morris’ Appalachian areas and Dr. Smith’s remote northern New Mexico regions, have to travel long distances to sign the authorization form. In addition, the staff in the physician’s office have to complete the paperwork and follow up throughout the process—either by mail, fax, or telephone.

This erosion of staff time has become a cost factor for many practices. Herb Baraf, MD, who works in one of the largest practices in the country in the suburbs of Washington, D.C., puts it succinctly, “The ability to get through the day is degraded terribly.”

In fact, Dr. Baraf considers this problem so important to some practices that they are forced to close down for a day a week to balance costs. “This is not our motto in our practice,” ensures Dr. Baraf, “but it can be a problem for many practitioners.”

Dr. Smith in New Mexico, for example, estimates that it takes 40 minutes per patient to obtain each authorization.

Also, everyone interviewed here wonders about the potentially biggest frustration of all: Will all the prior authorizations have to be resubmitted each new year when coverage begins anew or every time a patient changes a plan? Will the authorization ever follow the patient and not the plan?

Prior authorization, staff costs, and the frustrations of dealing with new regulations are only the beginning of the challenges presented by Medicare Part D. From the patient’s point of view, selecting the most individually beneficial plan, changing medications to meet coverage requirements, and working with the physician to create the best treatment regimen under given circumstances can be demanding tasks.

Then there is the high cost of coverage during the doughnut hole. For example, Lois, an RA patient in Chicago, takes Humira. She is happy that Part D is sparing her from paying her total drug costs. Nevertheless, because of the expense of her medication, she is concerned about the doughnut hole.

These patient problems are also the rheumatologist’s problems. “We have to accommodate the regulation because our patients can’t afford to do otherwise,” says Dr. Denio.

Provides Needed Coverage

Without exception, the physicians interviewed agree that Medicare Part D, for all its flaws, provides coverage that otherwise would not be available. Dr. Denio calls it a “bargain compared to going without.” Dr. Morris sees it as a real bonus for those in his district who have never had medication coverage, and Dr. Fohrman thinks it provides a service for those who cannot afford medication at all.

On the other hand, “It can be problematic,” says Dr. Fohrman. Still, as Medicare Part D continues to be tweaked, and as clinicians and patients voice their concerns and demand changes, there are likely to be improvements. Many rheumatologists working with the plan now have ideas and, in the end, Medicare Part D may become a workable plan for the ever-aging population in the United States. (See “Meeting the Challenges of Part D,” page 23.)

Ann Kepler is a medical journalist based in Chicago.