Medicare Part D
Changes in Utilization Similar for Randomly Reassigned and Other Low-Income Subsidy Beneficiaries Gao ID: GAO-11-546R June 22, 2011To help defray out-of-pocket prescription drug costs for limited or low-income Medicare beneficiaries, the Medicare Part D outpatient prescription drug program offers a low-income subsidy (LIS) for eligible beneficiaries. In 2010, about 9.4 million beneficiaries received the LIS--about 40 percent of the approximately 23 million Medicare Part D beneficiaries in that year. Most of the LIS beneficiaries received the full LIS, thus paying no premiums or deductibles as long as they enrolled in so-called "benchmark" stand-alone prescription drug plans (PDP). Benchmark PDPs are those plans with premiums at or below a specified benchmark for a given geographic region, calculated by the Centers for Medicare & Medicaid Services (CMS), the agency within the Department of Health and Human Services (HHS) that administers the Medicare program. Full LIS beneficiaries may also enroll in other Part D plans--either nonbenchmark PDPs or Medicare Advantage prescription drug plans (MAPD)-- but must pay any difference between the premium of the plan in which they choose to enroll and the benchmark for their region. Because plan premiums can change from year to year and because CMS recalculates the premium benchmarks annually, some PDPs may be benchmark PDPs in one year and not in the following year. In these instances, CMS is required to randomly reassign those LIS beneficiaries who are in plans whose premiums will no longer be at or below the new benchmark the following year into PDPs with premiums that will be at or below the benchmark. Beneficiaries subject to random reassignment can choose to either stay in their current plan or enroll in a new plan prior to being randomly reassigned by CMS, but if they choose either option, and that plan's premium is higher than the new benchmark, they are responsible for paying any premiums above the new benchmark. From 2007--the first year LIS beneficiaries could be randomly reassigned--through 2010, an average of almost 1.3 million LIS beneficiaries has been randomly reassigned into new PDPs each year. Questions have been raised by Medicare beneficiary advisors and others about the benefits of available benchmark PDPs, and some suggest that the random reassignment process may create challenges for affected LIS beneficiaries. For example, according to some advisors, random reassignment may impact LIS beneficiaries' drug coverage. Specifically, beneficiaries may be randomly reassigned by CMS into benchmark PDPs that do not cover the drugs they are taking, requiring them to consult with a medical provider to prescribe a therapeutically equivalent alternate drug. Similarly, they may be randomly reassigned by CMS into benchmark PDPs that impose more or different utilization management (UM) requirements-- such as prior authorization requirements, quantity limits, or step therapy--on certain drugs they are currently taking, thus also requiring the intervention of a medical provider. In addition, there are concerns that random reassignment may lead to changes in pharmacies impacted LIS beneficiaries have access to, which may further impact drug utilization. Congress asked us to examine the features of benchmark PDPs and explore how the random reassignment process may affect beneficiaries' drug utilization. In this report, we describe: 1. how drug coverage and access to pharmacies compared between benchmark and nonbenchmark PDPs from 2007 through 2010; and 2. how changes in drug and pharmacy utilization compared between randomly reassigned and other LIS beneficiaries who were not randomly reassigned from 2007 to 2008.
Drug coverage was somewhat more limited for benchmark compared to nonbenchmark PDPs and became gradually more restrictive for all PDPs from 2007 through 2010, while pharmacy access was comparable. The average number of drugs covered by benchmark PDP formularies was slightly smaller than the average covered by nonbenchmark PDP formularies--about 5 percent smaller in 2010, for example. Benchmark PDPs also imposed UM requirements on a similar to slightly greater share of drugs than other PDPs. For example, benchmark PDPs imposed at least one UM requirement on 28 percent of covered drugs compared with about 26 percent among nonbenchmark PDPs, on average, in 2010. Both benchmark and nonbenchmark PDPs experienced a gradual reduction in the number of drugs covered and a gradual increase in the number of drugs subject to at least one UM requirement from 2007 through 2010. Access to retail and mail order pharmacies was comparable among benchmark and nonbenchmark PDPs, with the average number of pharmacies per plan per state generally increasing during the period for both types of plans. The extent to which randomly reassigned LIS beneficiaries experienced changes in their drug and pharmacy utilization after reassignment was comparable to the extent of such changes among other LIS beneficiaries. Specifically, for drugs they had taken continuously for the full year of 2007, randomly reassigned and other LIS beneficiaries experienced comparable rates of reductions in drug fills, substitutions to therapeutically equivalent drugs, and discontinuations of the drugs in 2008. For example, 32 percent of randomly reassigned LIS beneficiaries experienced a reduction in fills in 2008, compared with 32 percent of LIS beneficiaries who chose new plans and 31 percent of LIS beneficiaries who did not change plans. Additionally, the share of LIS beneficiaries who experienced a change in pharmacies used in 2008 compared to 2007 was comparable across randomly reassigned and other LIS beneficiaries. While we did not identify measurable differences in the rates of utilization changes experienced by randomly reassigned beneficiaries compared to other LIS beneficiaries, beneficiary advisors said that the uniquely vulnerable LIS population may nevertheless experience hardships or inconvenience when changing prescription drug plans. HHS generally agreed with our findings. In particular, HHS stated that it concurred with our principal finding that the extent to which randomly reassigned LIS beneficiaries experienced changes in their drug and pharmacy utilization after reassignment was comparable to the extent of such changes among other LIS beneficiaries. However, HHS noted that our finding concerning the uniquely vulnerable LIS beneficiary population potentially facing particular hardships or inconveniences when changing drug plans was not supported by data in the report. Our report did not associate this finding to our data analyses, but instead noted that based on our discussions with beneficiary advisors, the particular hardships or inconveniences may exist despite our data analysis findings.
GAO-11-546R, Medicare Part D: Changes in Utilization Similar for Randomly Reassigned and Other Low-Income Subsidy Beneficiaries
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GAO-11-546R:
United States Government Accountability Office:
Washington, DC 20548:
June 22, 2011:
The Honorable Henry Waxman:
Ranking Member:
Committee on Energy and Commerce:
House of Representatives:
The Honorable Frank Pallone:
Ranking Member:
Subcommittee on Health:
Committee on Energy and Commerce:
House of Representatives:
The Honorable John D. Dingell:
House of Representatives:
Subject: Medicare Part D: Changes in Utilization Similar for Randomly
Reassigned and Other Low-Income Subsidy Beneficiaries:
To help defray out-of-pocket prescription drug costs for limited or
low-income Medicare beneficiaries, the Medicare Part D outpatient
prescription drug program offers a low-income subsidy (LIS) for
eligible beneficiaries.[Footnote 1] In 2010, about 9.4 million
beneficiaries received the LIS--about 40 percent of the approximately
23 million Medicare Part D beneficiaries in that year.[Footnote
2],[Footnote 3] Most of the LIS beneficiaries received the full LIS,
thus paying no premiums or deductibles as long as they enrolled in so-
called "benchmark" stand-alone prescription drug plans (PDP).[Footnote
4] Benchmark PDPs are those plans with premiums at or below a
specified benchmark for a given geographic region, calculated by the
Centers for Medicare & Medicaid Services (CMS), the agency within the
Department of Health and Human Services (HHS) that administers the
Medicare program. Full LIS beneficiaries may also enroll in other Part
D plans--either nonbenchmark PDPs or Medicare Advantage prescription
drug plans (MA-PD)--but must pay any difference between the premium of
the plan in which they choose to enroll and the benchmark for their
region.[Footnote 5]
Because plan premiums can change from year to year and because CMS
recalculates the premium benchmarks annually, some PDPs may be
benchmark PDPs in one year and not in the following year. In these
instances, CMS is required to randomly reassign those LIS
beneficiaries who are in plans whose premiums will no longer be at or
below the new benchmark the following year into PDPs with premiums
that will be at or below the benchmark.[Footnote 6] Beneficiaries
subject to random reassignment can choose to either stay in their
current plan or enroll in a new plan prior to being randomly
reassigned by CMS, but if they choose either option, and that plan's
premium is higher than the new benchmark, they are responsible for
paying any premiums above the new benchmark.[Footnote 7] From 2007--
the first year LIS beneficiaries could be randomly reassigned--through
2010, an average of almost 1.3 million LIS beneficiaries has been
randomly reassigned into new PDPs each year.
Questions have been raised by Medicare beneficiary advisors and others
about the benefits of available benchmark PDPs, and some suggest that
the random reassignment process may create challenges for affected LIS
beneficiaries. For example, according to some advisors, random
reassignment may impact LIS beneficiaries' drug coverage.
Specifically, beneficiaries may be randomly reassigned by CMS into
benchmark PDPs that do not cover the drugs they are taking, requiring
them to consult with a medical provider to prescribe a therapeutically
equivalent alternate drug. Similarly, they may be randomly reassigned
by CMS into benchmark PDPs that impose more or different utilization
management (UM) requirements--such as prior authorization
requirements, quantity limits, or step therapy[Footnote 8]--on certain
drugs they are currently taking, thus also requiring the intervention
of a medical provider. In addition, there are concerns that random
reassignment may lead to changes in pharmacies impacted LIS
beneficiaries have access to, which may further impact drug
utilization. Moreover, according to Medicare beneficiary advisors and
others, LIS beneficiaries are generally more likely than other
Medicare beneficiaries to have physical or cognitive impairments in
addition to lower incomes, potentially confounding their ability to
navigate the various processes associated with changing prescription
drug plans. Thus, some Medicare beneficiary advisors and others have
expressed concerns that randomly reassigned beneficiaries may
experience greater changes in their drug and pharmacy utilization
compared to other LIS beneficiaries, such as a delay or a
discontinuation in filling a prescription.
You asked us to examine the features of benchmark PDPs and explore how
the random reassignment process may affect beneficiaries' drug
utilization. In this report, we describe:
1. how drug coverage and access to pharmacies compared between
benchmark and nonbenchmark PDPs from 2007 through 2010;[Footnote 9]
and:
2. how changes in drug and pharmacy utilization compared between
randomly reassigned and other LIS beneficiaries who were not randomly
reassigned from 2007 to 2008.[Footnote 10]
To determine how drug coverage and access to pharmacies compared
between benchmark and nonbenchmark PDPs from 2007 through 2010, we
obtained CMS's Health Plan Management System (HPMS) files for these
years.[Footnote 11] We analyzed the data to determine the drugs
covered, the percentage of drugs subject to UM requirements, and the
number of retail and mail order pharmacies available per plan by year
and by state. We reviewed the HPMS data for soundness and consistency
and determined that they were sufficiently reliable for our purposes.
We also interviewed representatives of nine different State Health
Insurance Assistance Programs (SHIP).[Footnote 12] We asked the SHIP
representatives about issues related to the LIS, such as drug
formularies, UM requirements, and pharmacy access among plans
available to LIS beneficiaries.
To determine whether a group of randomly reassigned LIS beneficiaries
experienced changes in their drug utilization following reassignment
between 2007 and 2008, we analyzed CMS's Prescription Drug Event (PDE)
claims data to compare beneficiaries' utilization of selected drugs
taken continuously in 2007 before their random reassignment to their
utilization of those same drugs in 2008.[Footnote 13] In so doing, we
estimated the prevalence of any drug utilization changes in 2008.
Specifically, we estimated the number of LIS beneficiaries who
experienced a reduction in fills, a substitution with a therapeutic
equivalent,[Footnote 14] or a complete discontinuation in 2008 of one
or more selected drugs taken continuously in 2007. We then compared
reassigned beneficiaries' drug utilization changes to those of two
other groups--LIS beneficiaries who chose new plans, and LIS
beneficiaries who did not change plans.[Footnote 15] We also compared
changes in pharmacies used among the three groups between 2007 and
2008.[Footnote 16] While we cannot attribute all drug utilization and
pharmacy changes to the random reassignment process, we believe any
differences in the rate of utilization changes between the randomly
reassigned study group and the two comparison groups may suggest the
potential influence of random reassignment on utilization. We reviewed
the PDE data for soundness and consistency and determined that they
were sufficiently reliable for our purposes. During interviews with
SHIP representatives, we discussed the implications of the random
reassignment process on LIS beneficiaries. For more details on the
methodology used to estimate drug utilization and pharmacy changes
following reassignment, see enclosure I.
We conducted our work from June 2009 to May 2011 in accordance with
all sections of GAO's Quality Assurance Framework that are relevant to
our objectives. The framework requires that we plan and perform the
engagement to obtain sufficient and appropriate evidence to meet our
stated objectives and to discuss any limitations in our work. We
believe that the information and data obtained, and the analysis
conducted, provide a reasonable basis for any findings and conclusions
in this product.
Results in Brief:
Drug coverage was somewhat more limited for benchmark compared to
nonbenchmark PDPs and became gradually more restrictive for all PDPs
from 2007 through 2010, while pharmacy access was comparable. The
average number of drugs covered by benchmark PDP formularies was
slightly smaller than the average covered by nonbenchmark PDP
formularies--about 5 percent smaller in 2010, for example. Benchmark
PDPs also imposed UM requirements on a similar to slightly greater
share of drugs than other PDPs. For example, benchmark PDPs imposed at
least one UM requirement on 28 percent of covered drugs compared with
about 26 percent among nonbenchmark PDPs, on average, in 2010. Both
benchmark and nonbenchmark PDPs experienced a gradual reduction in the
number of drugs covered and a gradual increase in the number of drugs
subject to at least one UM requirement from 2007 through 2010. Access
to retail and mail order pharmacies was comparable among benchmark and
nonbenchmark PDPs, with the average number of pharmacies per plan per
state generally increasing during the period for both types of plans.
The extent to which randomly reassigned LIS beneficiaries experienced
changes in their drug and pharmacy utilization after reassignment was
comparable to the extent of such changes among other LIS
beneficiaries. Specifically, for drugs they had taken continuously for
the full year of 2007, randomly reassigned and other LIS beneficiaries
experienced comparable rates of reductions in drug fills,
substitutions to therapeutically equivalent drugs, and
discontinuations of the drugs in 2008. For example, 32 percent of
randomly reassigned LIS beneficiaries experienced a reduction in fills
in 2008, compared with 32 percent of LIS beneficiaries who chose new
plans and 31 percent of LIS beneficiaries who did not change plans.
Additionally, the share of LIS beneficiaries who experienced a change
in pharmacies used in 2008 compared to 2007 was comparable across
randomly reassigned and other LIS beneficiaries. While we did not
identify measurable differences in the rates of utilization changes
experienced by randomly reassigned beneficiaries compared to other LIS
beneficiaries, beneficiary advisors said that the uniquely vulnerable
LIS population may nevertheless experience hardships or inconvenience
when changing prescription drug plans.
HHS generally agreed with our findings. In particular, HHS stated that
it concurred with our principal finding that the extent to which
randomly reassigned LIS beneficiaries experienced changes in their
drug and pharmacy utilization after reassignment was comparable to the
extent of such changes among other LIS beneficiaries. However, HHS
noted that our finding concerning the uniquely vulnerable LIS
beneficiary population potentially facing particular hardships or
inconveniences when changing drug plans was not supported by data in
the report. Our report did not associate this finding to our data
analyses, but instead noted that based on our discussions with
beneficiary advisors, the particular hardships or inconveniences may
exist despite our data analysis findings.
Background:
Medicare Part D offers prescription drug coverage for individuals age
65 or older, certain disabled individuals under age 65, and people of
all ages with End-Stage Renal Disease. The program offers additional
subsidies for certain low income beneficiaries to help cover their out-
of-pocket prescription drug costs.
Medicare Part D Benefit:
The Medicare Prescription Drug, Improvement, and Modernization Act of
2003 (MMA) expanded Medicare coverage to include a voluntary benefit
program covering outpatient prescription drugs. Coverage under the
program, known as Medicare Part D, went into effect on January 1,
2006,[Footnote 17] and in 2010, enrolled about 23 million
beneficiaries. Beneficiaries may purchase drug coverage through stand-
alone PDPs or through MA-PD plans; the latter are part of Medicare
Advantage plans, which provide all Medicare benefits. In each of these
types of plans, both the beneficiary and the plan pay a portion of the
cost of covered prescription drugs, with the beneficiary typically
paying a monthly premium, an annual deductible, and copayments.
Part D plans must offer a standard Part D benefit, set each year by
CMS, or offer coverage that is actuarially equivalent to the standard
Part D benefit.[Footnote 18] Part D plans must also meet certain
requirements as to which drugs they cover. Specifically, CMS generally
requires that plan formularies--lists of covered drugs--must include
at least two drugs from each therapeutic class.[Footnote 19]
Formularies must also include all or substantially all drugs within
six designated drug categories: antidepressants, antipsychotics,
anticonvulsants, anticancer drugs, immunosuppressants, and HIV/AIDS.
[Footnote 20] In addition, plans must offer pharmacy networks that are
robust enough to ensure access to covered Part D drugs for their
beneficiaries--specifically the plans must include a retail pharmacy
in their network that is within 2 miles of 90 percent of urban
beneficiaries, 5 miles of 90 percent of suburban beneficiaries, and 15
miles of 70 percent of rural beneficiaries.[Footnote 21]
Part D plans have discretion in designing their formularies. As long
as they meet the minimum formulary requirements, they may exclude
particular drugs from their formularies. Additionally, plans may
attempt to lower their drug costs by applying various UM requirements
to specific drugs on their formularies.[Footnote 22] UM requirements
may include (1) prior authorization, which requires the beneficiary,
with help from their prescribing physician, to obtain the plan's
approval before it will cover a particular drug; (2) quantity limits,
which restrict the supply of a drug to the dosage or quantity provided
within a certain period of time; and (3) step therapy, which requires
the beneficiary to first try lower-cost drugs before a plan will cover
a more costly drug.
Medicare Part D Low-Income Subsidy:
Part D offers a low-income subsidy program to eligible beneficiaries.
To qualify for the LIS, Medicare beneficiaries must be enrolled in a
Part D plan and have income and resources less than a threshold
established by the MMA.[Footnote 23] In 2011, beneficiaries were
eligible if their income was at or below 149 percent of the Federal
Poverty Level (FPL) and their resources were equal to or below
$12,640, if single, or $25,260, if married. Beneficiaries may receive
a full or partial LIS, depending on their household income and
resources. The majority of the LIS beneficiaries--almost 97 percent in
2010--received the full LIS. In 2011, full LIS beneficiaries would pay
no premium if enrolled in a benchmark PDP, no deductible, and a zero
or nominal copayment for all out-of-pocket spending up to $4,550.
Partial LIS beneficiaries would pay a share of a plan's premium based
on a sliding scale, a $63 deductible, and a 15 percent copayment up to
$4,550; beyond that, copayments were $2.50 for generic and $6.30 for
brand name drugs.[Footnote 24]
Each year, CMS establishes an LIS premium benchmark for each of the 34
PDP regions[Footnote 25],[Footnote 26] by determining the average of
the premiums charged by all Part D plans in the region and weighting
that average by the number of LIS beneficiaries enrolled in each plan.
[Footnote 27] Benchmark PDPs are those PDPs that offer standard Part D
coverage and have premiums at or below the benchmark for their PDP
region in a given year. Full LIS beneficiaries are entitled to a
premium subsidy equal to 100 percent of the LIS premium subsidy amount
if they are enrolled in a benchmark PDP. Full LIS beneficiaries may
enroll in plans with premiums above the benchmark, but are responsible
for paying the difference between their plan's premium and the
benchmark. In 2010, there were 307 benchmark PDPs, constituting 8
percent of the 3,849 total Part D plans; in which over 6 million LIS
beneficiaries, or about 65 percent of the total, were enrolled.
[Footnote 28] (See table 1.)
Table 1: Number of Plans Available, Average Premium, and LIS
Enrollment by Type of Part D Plan, 2010:
Type of plan: Benchmark PDP;
Plans available[A]: Number of plans: 307;
Plans available[A]: Percent of all Part D plans: 8%;
Average premium[B] (national): $28.83;
LIS enrollment: Number of enrollees: 6,115,221;
LIS enrollment: Percent of total enrollment: 65.15%.
Type of plan: Nonbenchmark PDP;
Plans available[A]: Number of plans: 1,269;
Plans available[A]: Percent of all Part D plans: 33%;
Average premium[B] (national): $44.27;
LIS enrollment: Number of enrollees: 1,566,651;
LIS enrollment: Percent of total enrollment: 16.69%.
Type of plan: MA-PD;
Plans available[A]: Number of plans: 2,273;
Plans available[A]: Percent of all Part D plans: 59%;
Average premium[B] (national): $14.46[C];
LIS enrollment: Number of enrollees: 1,704,744;
LIS enrollment: Percent of total enrollment: 18.16%.
Type of plan: Total Part D plans;
Plans available[A]: Number of plans: 3,849;
LIS enrollment: Number of enrollees: 9,386,616.
Source: GAO analysis of CMS data.
[A] The number of available Part D plans excludes plans with
restricted enrollment--employer-sponsored, Demonstration, Cost, PACE,
religious fraternal benefits plans, and plans with zero enrollment as
of January 1 of each year.
[B] Enrollment-weighted average.
[C] This represents only the Part D portion of MA-PD premiums. In
2010, MA-PD premiums ranged from $0 to $157. Overall, the drug portion
of MA-PD premiums tends to be relatively lower than stand-alone PDP
premiums in part because Medicare Advantage plans can use savings from
other health services (rebates) to reduce their drug benefit premiums.
[End of table]
CMS's recalculation of the premium benchmark every year coupled with
plan's yearly adjustment of premiums means some plans lose their
status as benchmark PDPs from one year to the next. Additionally, some
plans choose to leave the Part D program. To protect those LIS
beneficiaries who were enrolled in a benchmark PDP in one year but
whose plans lost benchmark status or departed the program the
following year, the MMA requires CMS to randomly reassign such
beneficiaries to other PDPs whose premiums are at or below the
benchmark. From 2007 through 2010, about 3.5 million LIS beneficiaries
were randomly reassigned at least once; about 36 percent of them were
reassigned two or more times.[Footnote 29]
Drug Coverage Was Somewhat More Limited for Benchmark Compared to
Nonbenchmark PDPs and Became Gradually More Restrictive among All PDPs
from 2007 through 2010, While Pharmacy Access Was Comparable:
Benchmark PDPs generally covered a somewhat smaller number of drugs
compared with nonbenchmark PDPs, and the number of drugs covered
declined among all PDPs from 2007 through 2010. In 2010, for example,
benchmark PDPs covered an average of 1,402 drugs, about 5 percent
fewer than the average of 1,479 drugs covered by nonbenchmark PDPs.
(See figure 1.) Between 2007 and 2010, the average number of drugs
covered by benchmark and nonbenchmark PDPs declined by about 35
percent.[Footnote 30]
Figure 1: Average Number of Drugs Covered among Benchmark and
Nonbenchmark PDPs, 2007 through 2010:
[Refer to PDF for image: vertical bar graph]
Year: 2007;
Benchmark PDPs: 2,144;
Nonbenchmark PDPs: 2,279.
Year: 2008;
Benchmark PDPs: 1,690;
Nonbenchmark PDPs: 1,769.
Year: 2009;
Benchmark PDPs: 1,586;
Nonbenchmark PDPs: 1,698.
Year: 2010;
Benchmark PDPs: 1,402;
Nonbenchmark PDPs: 1,479.
Source: GAO analysis of CMS data.
Notes: The number of available Part D plans used in this analysis
excludes plans with restricted enrollment--employer-sponsored,
Demonstration, Cost, PACE, religious fraternal benefit plans, and
plans with zero enrollment as of January 1 of each year.
In 2007 and 2008, CMS established a "de minimis" policy allowing full
LIS beneficiaries in plans with premiums rising above the benchmark by
no more than $2 in 2007 and no more than $1 in 2008 to remain in their
plans without having to pay the difference between the plan's premium
and the benchmark. In our analysis, we included de minimis plans in
our count of 2007 and 2008 benchmark PDPs--de minimis plans accounted
for almost 24 percent of our total count of benchmark PDPs in 2007 and
almost 11 percent in 2008.
[End of figure]
Though benchmark PDPs covered somewhat fewer drugs overall from 2007
through 2010, coverage at the therapeutic class level was comparable
between benchmark and nonbenchmark PDPs, on average, for about 75
percent of about 170 therapeutic classes covered throughout this time
period. Within these classes, benchmark PDPs covered at least as many
drugs as did nonbenchmark PDPs. In the remaining 25 percent of
therapeutic classes, nonbenchmark PDPs generally covered, on average,
from 1 to 5 more drugs within those classes than did benchmark PDPs.
[Footnote 31]
All PDPs imposed at least one type of UM requirement--prior
authorization, quantity limits, or step therapy--to control
utilization of certain drugs that are expensive, potentially risky, or
subject to abuse, misuse, or experimental use. In 2010, benchmark PDPs
generally imposed UM requirements on a similar to slightly greater
share of drugs than nonbenchmark PDPs, and the use of such controls
has increased among all PDPs since 2007. Specifically, in 2010,
benchmark PDPs imposed at least one of the three UM requirements on an
average of 28 percent of drugs, compared with an average of about 26
percent among nonbenchmark PDPs. The percentage of covered drugs
subject to at least one UM requirement has generally increased among
all PDPs over time--among benchmark PDPs, it increased from 17 percent
in 2007 to 28 percent in 2010; for nonbenchmark PDPs, it increased
from 16 percent to 26 percent.[Footnote 32] (See figure 2.)
Figure 2: Average Percentage of Drugs Subject to at Least One
Utilization Management (UM) Requirement among Benchmark and
Nonbenchmark PDPs, 2007 through 2010:
[Refer to PDF for image: vertical bar graph]
Year: 2007;
Benchmark PDPs: 17%;
Nonbenchmark PDPs: 16%.
Year: 2008;
Benchmark PDPs: 23%;
Nonbenchmark PDPs: 23%.
Year: 2009;
Benchmark PDPs: 27%;
Nonbenchmark PDPs: 26%.
Year: 2010;
Benchmark PDPs: 28%;
Nonbenchmark PDPs: 26%.
Source: GAO analysis of CMS data.
Notes: The number of available Part D plans used in this analysis
excludes plans with restricted enrollment--employer-sponsored,
Demonstration, Cost, PACE, religious fraternal benefit plans, and
plans with zero enrollment as of January 1 of each year.
In 2007 and 2008, CMS established a "de minimis" policy allowing full
LIS beneficiaries in plans with premiums rising above the benchmark by
no more than $2 in 2007 and no more than $1 in 2008 to remain in their
plans without having to pay the difference between the plan's premium
and the benchmark. In our analysis, we included de minimis plans in
our count of 2007 and 2008 benchmark PDPs--de minimis plans accounted
for almost 24 percent of our total count of benchmark PDPs in 2007 and
almost 11 percent in 2008.
[End of figure]
Benchmark PDPs provided generally comparable access to retail and mail
order pharmacies compared with other plans since 2007. During this
period, the average number of pharmacies per plan per state was about
the same between benchmark and nonbenchmark PDPs--1,179 and 1,166,
respectively. (See figure 3.) Over time, the average number of
pharmacies per plan per state increased slightly among both types of
PDPs--reaching 1,211 and 1,209 for benchmark and nonbenchmark PDPs in
2010, up from 1,137 and 1,123 in 2007. In addition, the percentage of
benchmark and nonbenchmark PDPs offering a mail order pharmacy was
relatively comparable during this period, ranging between 83 and 92
percent among benchmark PDPs, and between 87 and 94 percent among
nonbenchmark PDPs from 2007 through 2010.[Footnote 33]
Figure 3: Average Number of Pharmacies, per Plan, per State, for
Benchmark and Nonbenchmark PDPs, 2007 through 2010:
[Refer to PDF for image: vertical bar graph]
Year: 2007;
Benchmark PDPs: 1,137;
Nonbenchmark PDPs: 1,123.
Year: 2008;
Benchmark PDPs: 1,181;
Nonbenchmark PDPs: 1,158.
Year: 2009;
Benchmark PDPs: 1,185;
Nonbenchmark PDPs: 1,173.
Year: 2010;
Benchmark PDPs: 1,211;
Nonbenchmark PDPs: 1,209.
Source: GAO analysis of CMS data.
Notes: The number of available Part D plans used in this analysis
excludes plans with restricted enrollment--employer-sponsored,
Demonstration, Cost, PACE, religious fraternal benefit plans, and
plans with zero enrollment as of January 1 of each year.
In 2007 and 2008, CMS established a "de minimis" policy allowing full
LIS beneficiaries in plans with premiums rising above the benchmark by
no more than $2 in 2007 and no more than $1 in 2008 to remain in their
plans without having to pay the difference between the plan's premium
and the benchmark. In our analysis, we included de minimis plans in
our count of 2007 and 2008 benchmark PDPs--de minimis plans accounted
for almost 24 percent of our total count of benchmark PDPs in 2007 and
almost 11 percent in 2008.
[End of figure]
Changes in Drug and Pharmacy Utilization Were Comparable among
Randomly Reassigned and Other LIS Beneficiaries from 2007 to 2008:
Randomly reassigned LIS beneficiaries experienced similar rates of
changes in their drug and pharmacy utilization compared with other LIS
beneficiaries in 2008.[Footnote 34] Reductions in fills were the most
common drug utilization change, and the share of beneficiaries who
experienced a reduction in fills was similar across randomly
reassigned and other LIS beneficiaries. Specifically, about 32 percent
of randomly reassigned beneficiaries, 32 percent of beneficiaries who
chose a new plan, and 31 percent of beneficiaries who did not change
plans experienced a reduction in fills in 2008 for at least one of the
drugs they took continuously in 2007. A smaller, but comparable, share
of randomly reassigned and other LIS beneficiaries substituted at
least one of their drugs taken continuously in 2007 with a therapeutic
equivalent (including generics) in 2008. Specifically, about 14
percent of randomly reassigned beneficiaries, 13 percent of those
beneficiaries who chose a new plan, and 12 percent of beneficiaries
who did not change plans substituted at least one of their 2007 drugs
for a therapeutic equivalent in 2008. Similarly, a small but
comparable share of randomly reassigned and other LIS beneficiaries
discontinued taking at least one drug in 2008 that they had taken
continuously in 2007. Specifically, about 6 percent of randomly
reassigned beneficiaries, 7 percent of beneficiaries who chose a new
plan, and 6 percent of beneficiaries who did not change plans
experienced a drug discontinuation in 2008. (See figure 4.)
Figure 4: Drug Utilization Changes in 2008 among Randomly Reassigned
and Other LIS Beneficiaries:
[Refer to PDF for image: vertical bar graph]
Type of drug utilization change: Reduced fills;
Randomly reassigned: 32%;
Chose new plan: 32%;
Did not change plans: 31%.
Type of drug utilization change: Substitutions;
Randomly reassigned: 14%;
Chose new plan: 13%;
Did not change plans: 12%.
Type of drug utilization change: Discontinuations;
Randomly reassigned: 6%;
Chose new plan: 7%;
Did not change plans: 6%.
Source: GAO analysis of CMS data.
[End of figure]
We also compared changes in pharmacy utilization from 2007 to 2008
between randomly reassigned and other LIS beneficiaries and found that
the share who experienced a change was comparable among randomly
reassigned and other LIS beneficiaries. Specifically, about 33 percent
of randomly reassigned beneficiaries, 29 percent of those who chose a
new plan, and 32 percent of those who did not change plans had a
change in pharmacy in 2008.
While randomly reassigned LIS beneficiaries experienced comparable
changes in drug and pharmacy utilization compared to other LIS
beneficiaries, the LIS population may nevertheless experience
particular hardships or inconvenience when changing prescription drug
plans relative to other, non-LIS beneficiaries. According to
representatives from several SHIPs we spoke with, LIS beneficiaries
are generally more likely than other Medicare beneficiaries to have
physical or cognitive impairments in addition to lower incomes. These
limitations may affect their ability to navigate changes associated
with their new prescription drug plans. For example, according to SHIP
representatives, accounting for changing or increased UM requirements
may present challenges to LIS beneficiaries, who may need to seek
reauthorization from their new plan for prescriptions they are
currently taking. According to CMS officials, the agency has policies
in place to help beneficiaries transition between Part D drug plans.
For example, plans are required to provide newly enrolled
beneficiaries with access to at least a 30 day transition supply of
any drug covered by a prior plan within the first 90 days of their
enrollment, even if the new plan does not include the drug on its
formulary.
Agency Comments and Our Evaluation:
We received written comments from HHS on a draft of this report (see
enclosure II). HHS generally agreed with our findings. In particular,
HHS stated that it concurred with our principal finding that the
extent to which randomly reassigned LIS beneficiaries experienced
changes in their drug and pharmacy utilization after reassignment was
comparable to the extent of such changes among other LIS
beneficiaries. However, the agency also stated that our finding
concerning the LIS beneficiary population potentially facing
particular hardships or inconveniences when changing drug plans was
not supported by data in the report. Our report did not associate this
finding with our data analyses, but instead noted that particular
hardships or inconveniences may exist despite our data analysis
findings. Beneficiary advisors from several SHIP organizations we
contacted discussed how the LIS beneficiaries are more likely than
other Medicare beneficiaries to have physical or cognitive impairments
in addition to lower incomes, which could affect their ability to
navigate changes associated with new prescription drug plans.
As arranged with your offices, unless you publicly announce the
contents of this correspondence earlier, we plan no further
distribution until 30 days from the date of this report. At that time,
we will send copies of this correspondence to the Secretary of HHS. In
addition, the correspondence will be available at no charge on GAO's
Web site at [hyperlink, http://www.gao.gov]. If you or your staffs
have any questions about this report, please contact me at (202) 512-
7114 or kingk@gao.gov. Contact points for our Offices of Congressional
Relations and Public Affairs may be found on the last page of this
correspondence. GAO staff who made major contributions to this
correspondence are listed in enclosure III.
Signed by:
Kathleen M. King:
Director, Health Care:
Enclosures - 3:
[End of section]
Enclosure I: Methodology for Determining Use Changes Following
Reassignment:
This enclosure provides additional details regarding our scope and
methodology for reporting changes in drug and pharmacy utilization
between 2007 and 2008 for randomly reassigned and other low-income
subsidy (LIS) beneficiaries.
To determine whether a study group of randomly reassigned LIS
beneficiaries experienced changes in their drug utilization following
reassignment between 2007 and 2008, we obtained and analyzed
Prescription Drug Event (PDE) claims data[Footnote 35] to compare
beneficiaries' use of selected drugs taken continuously in 2007 before
their random reassignment to their use of those same drugs in 2008. To
control for expected changes from year to year, we compared
experiences among our study group of those randomly reassigned in 2008
to the experiences among two comparison groups: LIS beneficiaries who
chose new plans in 2008 and LIS beneficiaries who did not change plans
in 2008. We also compared changes in pharmacies used among the three
groups between 2007 and 2008.
Step 1: Identify Selected Drugs for Analysis:
We compiled a list of the most utilized chronic condition drugs by LIS
beneficiaries in 2007 to form the basis of our analysis of drug
utilization changes in 2008 among randomly reassigned and other LIS
beneficiaries. To develop this list, we analyzed PDE claims data from
2007 to determine the frequency of drugs utilized by LIS beneficiaries
in that year. Drugs were identified at their drug name level.[Footnote
36] We then limited this list of drugs utilized by LIS beneficiaries
to the top 100 drugs taken primarily for the long-term treatment of
chronic conditions.[Footnote 37],[Footnote 38] Selecting only drugs
used to treat chronic conditions was done to ensure no changes could
be attributed to a routine discontinuation of a short-term medication.
Step 2: Creating Study Groups:
To determine how utilization changes for selected drugs compared among
randomly reassigned and other LIS beneficiaries, we created a study
group--beneficiaries who were randomly reassigned in 2008, and two
comparison groups--beneficiaries who chose new plans in 2008, and
beneficiaries who did not change plans in 2008.[Footnote 39]
To create these groups, we first established our study population. To
be included in our analysis, LIS beneficiaries had to meet the
following criteria:
* they received the LIS throughout 2007 and 2008;
* they were enrolled continuously in a plan throughout 2007 and 2008;
[Footnote 40] and:
* they filled prescriptions for one or more of the 100 most utilized
drugs for chronic conditions continuously through 2007.[Footnote 41]
Step 3: Determining Drug Utilization Changes:
To determine if beneficiaries in the three study groups experienced
any changes in their drug utilization in 2008 for at least one of the
drugs they took continuously in 2007, we identified instances of
discontinuations, substitutions, and reduced fills in 2008. We used
the following rules to define what constituted a discontinuation,
substitution, or reduced fill:
* Discontinuations:
- The beneficiary had zero fills in 2008 for a drug taken continuously
in 2007; or:
- The beneficiary had only one fill for a drug taken continuously in
2007 during the first quarter of 2008[Footnote 42] and zero fills
during the rest of 2008; and:
- The beneficiary had zero fills for a therapeutically equivalent
(substitute)[Footnote 43] drug in 2008.
* Substitutions:
- The beneficiary had at least one fill for a therapeutically
equivalent drug in 2008; and:
- The beneficiary had fewer than 11 fills of the original drug in 2008.
* Reduced fills[Footnote 44],[Footnote 45]
- A beneficiary filled a drug taken continuously in 2007 at least one
time in 2008, but had fewer than the 11 fills that constitute
continuous coverage; or:
- A beneficiary filled a substituted therapeutically equivalent drug
at least one time in 2008, but had fewer than 11 fills; or:
- A beneficiary's combined fills for the original drug and a
substituted drug in 2008 are greater than zero but less than 11 fills.
Using these rules, we estimated the percentage of beneficiaries in
each study group who experienced a discontinuation, substitution, or
reduced fill in 2008 for at least one of the drugs they took
continuously in 2007.
Step 4: Determining Changes in Pharmacy Utilization:
To determine the extent to which beneficiaries in our study groups
used a different pharmacy in 2008 from those used in 2007, we analyzed
PDE claims data to identify instances where a beneficiary filled a
prescription at a specific pharmacy in 2007 but not at that pharmacy
in 2008, or where a beneficiary filled a prescription at a specific
pharmacy in 2008, but not at that pharmacy in 2007. We controlled for
instances where a beneficiary filled a prescription at different
pharmacies within the same chain.
Data Reliability and Limitations:
This analysis does not take into account the specific clinical
circumstances of each change in utilization, and not all changes can
be accurately identified by our measures of discontinuations, reduced
fills, or substitutions. For example, a beneficiary may have had one
2007 drug replaced with two substitute drugs in 2008. Our approach
would count just one substitution. Our analysis thus provides
estimates of discontinuations, substitutions, and reduced fills--not
actual counts. However, because the extent of any inaccurately
identified utilization changes is not likely to differ systematically
among the study groups, we believe our estimates of the rates of
differences in utilization changes among the groups are reasonable.
To ensure the claims and enrollment data we used were sufficiently
reliable for our purposes, we reviewed related documentation and
tested the data to identify outliers, missing data, and other
potential sources of errors. We concluded that the data were
sufficiently reliable for the purposes of this report.
[End of section]
Enclosure II: Comments from the Department of Health and Human
Services:
Department of Health and Human Services:
Office of The Secretary:
Assistant Secretary for Legislation:
Washington, DC 20201:
June 10, 2011:
Kathleen King, Director:
Health Care:
U.S. Government Accountability Office:
441 G Street N.W.
Washington, DC 20548:
Dear Ms. King:
Attached are comments on the U.S. Government Accountability Office's
(GAO) draft correspondence entitled, "Medicare Part D: Changes in
Utilization Similar for Randomly Reassigned and Other Low Income
Subsidy Beneficiaries" (GAO 11-546R).
The Department appreciates the opportunity to review this draft
correspondence prior to publication.
Sincerely,
Signed by:
Jim R. Esquea:
Assistant Secretary for Legislation:
Attachment:
[End of letter]
General Comments Of The Department Of Health and Human Services (HHS)
On The U.S. Government Accountability Office's (GAO) Draft
Correspondence Entitled, "Medicare Part D: Changes In Utilization
Similar For Randomly Reassigned And Other Low Income Subsidy
Beneficiaries" (GAO-11-546R)
The Department appreciates the opportunity to review and comment on
this draft correspondence.
Access to medication for Low Income Subsidy (LIS) beneficiaries, a
vulnerable population, is critical for their continuity of care. The
findings of this report are positive and do not show any negative
effect of the reassignment of LIS beneficiaries to a different plan.
The Centers for Medicare and Medicaid Services (CMS) does note that on
Page 6, where GAO writes, "While we did not identify measurable
differences in the rates of utilization changes experienced by
randomly reassigned beneficiaries compared to other LIS beneficiaries,
beneficiary advisors said that the uniquely vulnerable population may
nevertheless experience hardships or inconvenience when changing
prescription drug plans," that this statement is not supported by data
represented in the report.
We concur with GAO's principal conclusion that the extent to which
reassigned LIS beneficiaries experienced changes in their drug and
pharmacy utilization after reassignment was comparable to the extent
of such changes among other LIS beneficiaries.
[End of section]
Enclosure III: GAO Contact and Staff Acknowledgments:
GAO Contact:
Kathleen M. King, (202) 512-7114 or kingk@gao.gov:
Staff Acknowledgments:
In addition to the contact named above, Randy DiRosa, Assistant
Director; Nick Bartine; George Bogart; Zhi Boon; Shirin Hormozi; Megan
M. Moore; Laurie Pachter; and Pauline Seretakis made key contributions
to this report.
[End of section]
Footnotes:
[1] Medicare Prescription Drug, Improvement, and Modernization Act of
2003 (MMA). Pub. L. No. 108-173, § 101, 117 Stat. 2066, 2071 (adding a
new Part D to title XVIII of the Social Security Act (SSA) which
establishes a voluntary Medicare prescription drug benefit program
(codified at 42 U.S.C. §§ 1395 w-101 et seq.)) (SSA § 1860D-14
establishes premium and cost-sharing subsidies for low-income
individuals (codified at 42 U.S.C. § 1395w-14)). Under the Part D drug
program, coverage for all Medicare beneficiaries is subsidized;
however, LIS beneficiaries receive additional subsidy support.
[2] The Part D population eligible for LIS may be substantially
greater. For example, according to a September 2010 report by the
Henry J. Kaiser Family Foundation, more than 2 million Medicare
beneficiaries were eligible for the LIS in 2009 but did not receive it.
[3] The number of total Medicare Part D enrollees excludes individuals
enrolled in plans with restricted enrollment, i.e., employer-
sponsored, Demonstration, Cost, PACE, religious fraternal benefits
plans, and plans with zero enrollment as of January 1 of each year.
[4] The full LIS covers 100 percent of the premium up to the benchmark
amount and all of the deductibles. To be eligible for the full LIS in
2011, a beneficiary needs to have an income at or below 135 percent of
the Federal Poverty Level (FPL) and resources of no more than $8,180,
if single, or $13,020, if married. Beneficiaries with greater income
and resources, but no more than 149 percent of the FPL and resources
no more than $12,640, if single, or $25,260, if married, are eligible
to receive the partial LIS, which covers 25 to 75 percent of the
premium and a portion of the deductible. According to CMS, in 2010,
about 97 percent of LIS beneficiaries received the full LIS.
Regardless of the type of subsidy, LIS beneficiaries may have to pay
some portion of their copayments.
[5] MA-PDs provide drug coverage to beneficiaries enrolled in Medicare
Advantage, Medicare's managed care program. Medicare Advantage plans
provide all Part A and Part B coverage and may offer extra coverage,
such as vision, hearing, dental, and/or health and wellness programs.
Most Medicare Advantage plans include Part D prescription drug
coverage.
[6] MMA, Pub. L. No. 108-173, § 101, 117 Stat. 2073 (adding SSA, §
1860D-1(b)(1)(C) (codified at 42 U.S.C. § 1395w-101(b)(1)(C)). Only
LIS beneficiaries eligible for the full LIS are subject to random
reassignment unless a plan terminates (in which case all affected
beneficiaries may be randomly reassigned). According to CMS officials,
the vast majority of reassignments--from almost 100 percent in 2007 to
about 73 percent in 2010--occur as a result of premium increases.
[7] The LIS beneficiaries we refer to in this report as "randomly
reassigned" are those who actually underwent random reassignment to
new benchmark PDPs by CMS.
[8] Step therapy requires that a beneficiary try lower-cost drugs
before a plan will cover a more costly drug.
[9] While LIS beneficiaries may enroll in MA-PDs, they may be randomly
reassigned only into benchmark PDPs. Also, because MA-PDs are part of
Medicare Advantage plans, which cover all Medicare benefits, the
decision to enroll in an MA-PD is likely to take into account factors
in addition to drug benefits, such as the plan medical benefits and
network access to doctors and hospitals. For these reasons, we focus
the comparative analysis of drug plans on benchmark and nonbenchmark
PDPs. However, where applicable, we do provide some comparable
information for MA-PDs.
[10] The most recent data available at the time of our review was for
2008.
[11] The Health Plan Management System (HPMS) is the electronic
information and communication system between CMS and sponsors
participating in Medicare parts C and D. HPMS collects data for and
manages a number of plan enrollment processes, such as: application
process, bid/benefit package submissions, and formulary submissions.
[12] The State Health Insurance and Assistance Program (SHIP) is a
state-based program, funded through CMS grants, that offers free
counseling and assistance to people with Medicare and their families.
For example, according to SHIP representatives, SHIP counselors often
help LIS beneficiaries in selecting plans or understanding and dealing
with the random reassignment process. The program is administered by
the states. For our interviews, we selected SHIPs based on
geographical diversity and the size of states' LIS population. We
interviewed SHIP representatives from Alabama, Arizona, California,
Colorado, Illinois, Louisiana, Maine, New York, and West Virginia.
[13] CMS's Prescription Drug Event (PDE) claims data contain a record
of each claim reimbursed under Part D, including, among other things,
the plan in which the beneficiary was enrolled, whether the drug was
covered by the plan, the quantity of drug supplied, and LIS status of
the beneficiary. PDE claims data for 2008 were the most recent
available at the time of our review.
[14] Drugs that possess a similar chemical structure and similar
therapeutic effects are grouped into therapeutic classes. There are
five therapeutic class levels, ranging from therapeutic class level 1
(the broadest possible classification) to therapeutic class level 5
(the narrowest possible classification). We used Thomson Reuters' RED
BOOKTM data on therapeutic class, specifically therapeutic class level
2 (TC2). Examples of TC2s include Antidepressant, Antidiabetic,
Antiasthma, and Calcium Channel Blocker. In our analysis, we consider
drugs to be therapeutically equivalent if they are in the same
therapeutic class level 2.
[15] LIS beneficiaries who were originally subject to random
reassignment but instead decided to either self-select a new plan or
stay in their original plan were also included in these two comparison
groups.
[16] Our analysis of pharmacy changes did not include changes from one
pharmacy to another within the same pharmacy chain.
[17] See SSA § 1860D-1(a)(2), as added by MMA 117 Stat. 2072.
[18] See SSA § 1860D-2(c), as added by MMA 117 Stat. 2079.
[19] See 42 C.F.R. § 423.120(b)(2) (2010). This requirement to cover
at least two drugs per therapeutic class does not apply when there is
only one drug in the class or category or when CMS has given approval
to a plan to cover fewer than two drugs.
[20] See SSA § 1860D-4(b)(3)(G), as added by Pub. L. No. 110-275, 122
Stat. 2581.
[21] MMA, Pub. L. No. 108-173, § 101, 117 Stat. 2083 (adding SSA, §
1860D-4(b)(1)(C) (codified at 42 U.S.C. § 1395w-114(a)); 42 C.F.R.
§423.120(a)(1)(2010).
[22] See SSA § 1860D-4(c)(1)(A), as added by MMA 117 Stat 2086.
[23] See MMA, Pub. L. No. 108-173, § 101, 117 Stat. 2107 (adding SSA,
§ 1860D-14(a)) (codified at 42 U.S.C. § 1395w-114(a)). This provision
directs CMS to update the resource limits for the LIS each year based
on the annual percentage increase in the Consumer Price Index, All
Urban Consumers, as of September of the previous year.
[24] The MMA requires the copayments for LIS beneficiaries under the
standard benefit to be indexed annually to the increase in average
total drug expenses of Medicare beneficiaries. MMA, Pub. L. No. 108-
173, § 101, 117 Stat. 2077 (adding SSA, §§ 1860D-2(b)(4)(A) (codified
at 42 U.S.C. § 1395w-102(b)(4)(A)).
[25] CMS established 34 geographic regions for the administration of
PDPs and 26 regions for the administration of MA-PDs. See MMA, Pub. L.
No. 108-173, §§ 101, 221(c), 117 Stat. 2092, 2181 (adding SSA, §§
1860D-11(a), 1858(a)) (codified at 42 U.S.C. § 1395w-111(a)). Plan
costs and coverage vary by region.
[26] This benchmark is set at the regional level but applies to each
state within the region.
[27] The MMA directed CMS to use a weighted average to calculate the
benchmark amount. Since then, according to CMS officials, CMS has
adjusted its weighting method for calculating the benchmark, mostly in
an effort to increase the benchmark, and consequently, to increase the
number of benchmark PDPs.
[28] Using numbers reported in a September 2010 report by the Henry J.
Kaiser Family Foundation, we calculated that, in 2010, only about 11
percent of LIS beneficiaries enrolled in MA-PD plans paid any drug-
related premiums.
[29] LIS beneficiaries who would otherwise be randomly reassigned
because they are enrolled in PDPs losing their benchmark status the
following year may decide instead to choose their own plan. They may
either stay in their original plan or enroll in a plan of their own
choosing. In 2010, of the 922,272 LIS beneficiaries who would have
been subject to random reassignment, almost 92 percent were randomly
reassigned. The other 8 percent chose their own plan--roughly half
chose to stay in their current plan and half chose a new plan.
[30] Benchmark PDPs also covered fewer drugs than MA-PDs during this
period. For example, in 2010, benchmark PDPs covered, on average,
about 13 percent fewer drugs than MA-PDs. In addition, as among
benchmark and nonbenchmark PDPs, the number of drugs covered by MA-PDs
declined from 2007 to 2010.
[31] In 2010, analgesics was the only therapeutic class where the
difference was more than 5 drugs--nonbenchmark PDPs covered an average
of 76 drugs, 9 drugs more than the average of 67 drugs covered by
benchmark PDPs.
[32] Benchmark PDPs also imposed at least one UM requirement on a
slightly greater number of drugs than MA-PDs. For example, in 2010,
benchmark PDPs, imposed on average, at least one UM requirement on 28
percent of drugs compared to 24 percent among MA-PDs. As among
benchmark and nonbenchmark PDPs, use of UM requirements among MA-PDs
increased from 2007 to 2010.
[33] Benchmark PDPs offered better access to retail pharmacies
compared to MA-PDs. From 2007 through 2010, the average number of
pharmacies per plan per state was significantly higher among benchmark
PDPs than among MA-PDs at 1,179 and 323 respectively. Access to mail
order pharmacies among MA-PDs was relatively comparable to benchmark
PDPs.
[34] For our analysis, we compared drug and pharmacy utilization
changes among three groups: beneficiaries who were randomly reassigned
in 2008; beneficiaries who chose new plans in 2008; and beneficiaries
who did not change plans in 2008. The three groups included: 540,723
randomly reassigned LIS beneficiaries; 1,712,495 LIS beneficiaries who
did not change plans; and 197,653 LIS beneficiaries who chose a new
plan for 2008. All beneficiaries included in the groups took one or
more drugs used to treat chronic conditions continuously in 2007.
[35] CMS's Prescription Drug Event (PDE) claims data contain a record
of each claim reimbursed under Part D, including, among other things,
the plan in which the beneficiary was enrolled, whether the drug was
covered by the plan, the quantity of drug supplied, and LIS status of
the beneficiary. PDE claims data for 2008 were the most recent
available at the time of our review.
[36] We identified these drugs using their National Drug Code. This
code identifies a drug's manufacturer, product name, strength, and
dosage form, among other information. We then condensed this
information to capture all drugs with the same product name,
regardless of strength and dosage form.
[37] We used the maintenance drug code data field from Thomson
Reuters' RED BOOK™--a database containing drug pricing and other drug-
related information--to determine which drugs were used primarily for
the long-term treatment of chronic conditions.
[38] We also identified these drugs' therapeutic classes. Drugs that
possess a similar chemical structure and similar therapeutic effects
are grouped into therapeutic classes. There are five therapeutic class
levels, ranging from therapeutic class level 1 (the broadest possible
classification) to therapeutic class level 5 (the narrowest possible
classification). We used Thomson Reuters' RED BOOK™ data on
therapeutic class in our analysis, specifically therapeutic class
level 2 (TC2). Examples of TC2s include Antidepressant, Antidiabetic,
Antiasthma, and Calcium Channel Blocker. Our analysis excluded drugs
that were not associated with a TC2 code.
[39] LIS beneficiaries who were subject to random reassignment but
instead decided to either self-select a new plan or stay in their
original plan were also included in these two comparison groups.
[40] Beneficiaries did not need to be enrolled in the same plan for
both 2007 and 2008; they only needed to be enrolled continuously
within a plan during each of these two years.
[41] Each Part D claim for these 100 drugs had to have been for a
minimum of a 28-day supply of the drug, which was then adjusted to a
30-day equivalent. For our analysis, we consider each 30-day
equivalent to be one "fill." To have taken a drug continuously, the
beneficiary must have had between 11 and 13 "fills" for that drug in
2007.
[42] Permitting one fill accounts for likely instances where a
randomly reassigned beneficiary uses the one transition fill required
under Medicare Part D while pursuing a change to a therapeutically
equivalent drug. See 42 C.F.R. § 423.120(b)(3) (2010).
[43] In our analysis, we consider a drug to be therapeutically
equivalent if it has the same TC2 classification as the original drug.
[44] To adjust for any fills that may span between 2007 and 2008, if a
beneficiary's last prescription in 2007 occurred in October, November,
or December, and if the days supply was for greater than 45 days, we
adjusted the prescription to its 30-day equivalent and added that
number to a beneficiary's 2008 fill count.
[45] This measure also captured delays in prescription fills.
[End of section]
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