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Medicare Compliance & Reimbursement

PHARMACEUTICALS:

New Medicare PDPs Get Final Approval

Published on Sun Sep 18, 2005

MA plans also get go-ahead.

Medicare took a major step toward its new prescription drug coverage on Sept. 23 by formally approving prescription drug plans and Medicare Advantage plans that will offer coverage starting Jan. 1, 2006, Health and Human Services Secretary Mike Leavitt announced.

The prescription drug plans--which work with traditional Medicare, and the Medicare Advantage plans that offer drug coverage and additional benefits--were allowed to begin marketing their plans on Oct. 1, 2005.

The new program includes prescription drug plans in every state--with no area needing the "fallback" plan that HHS would have required without at least two organizations competing. Each region will have between 11 and 20 organizations offering prescription drug plans, with ten organizations offering drug coverage nationwide. In every state but Alaska, there will be at least one prescription drug plan with a premium of less than $20 per month.

Medicare Advantage plans, which offer coordinated care for even lower out-of-pocket costs, will have more comprehensive offerings next year. In 44 states, beneficiaries can select a Medicare Advantage plan that provides prescription drug coverage for no additional cost.

In 37 states, beneficiaries will be able to choose a new regional Preferred Provider Organization plan.

"As we approach the start of enrollment on Nov. 15, Medicare will work with our partners in every state to help people with Medicare make their decisions," said Centers for Medicare and Medicaid Services Administrator Mark McClellan. Prescription drug coverage will be available to everyone in Medicare, regardless of his income or how he gets his Medicare coverage. Extra assistance is available to those with limited incomes and resources. In every state, at least five prescription drug plans will offer coverage with no premium to beneficiaries who qualify for extra help.

All plans have met Medicare's requirements for providing access to medically necessary drugs, including formulary standards as well as standards for access to convenient retail pharmacies and to drugs in nursing homes.

HHS requires all plans to provide coverage at least as good as Medicare's standard coverage, which pays on average 75 percent of drug costs after a $250 deductible ...quot; up to $2,250 in total drug spending. The coverage also pays approximately 95 percent after $3,600 in out-of-pocket costs to protect against very high drug expenses. CMS calculates that Medicare will pay more than half of a typical beneficiary's annual drug costs, or more than $1,100.

"As a result of the strong competition, Medicare will also include options that cost less and provide coverage beyond Medicare's standard benefit," McClellan said.

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