Medicare & Medicare Prescription Drugs
Call for Papers
Medicare Part D: Successes & Challenges
Chair: Scott Young, Agency for Healthcare
Research and Quality
Monday, June 26 • 8:30 am – 10:00 am
●Factors Associated with Regional Variation in Medicare
Part D Prescription Drug Plan Participation and
Beneficiary Premiums
Leslie Greenwald, Ph.D., Judith Shinogle, Ph.D., John Kautter,
Ph.D., Greg Pope, Ph.D., Boyd Gilman, Ph.D.
Presented By: Leslie Greenwald, Ph.D., Senior Scientist, , RTI,
International, 5104 Wetheredsville Rd, Baltimore, MD 21207;
Tel: 410-448-2611; Fax: 410-448-2611;
Email: lgreenwald@rti.org
Research Objective: To understand the factors that influence
regional variation in Medicare Part D prescription drug plan
(PDP) participation and beneficiary premiums.
Study Design: This study investigated the relationship
between PDP regional characteristics and the number of
Medicare Part D stand alone PDP plans and their average
2006 premiums. Data on PDP regional characteristics were
developed from a comprehensive database of U.S. Census,
Medicare administrative files, the Area Resource File,
Interstudy, AARP, and other sources. This database was
originally created for the Centers for Medicare & Medicaid
Services (CMS) in their development of the 34 PDP regions,
and has been updated for this study The total number of PDP
plan options, and average premium charged, were correlated
with regional characteristics available in this database to
detect factors related to PDP plan participation and beneficiary
premiums.
Population Studied: Medicare PDP plans and regions.
Principal Findings: Several regional characteristics are
correlated with the number of PDPs offered in each region and
the premiums charged. The percent rural population in
regions has a small, negative relationship with the number of
PDP plans, but a strong, positive relationship with increased
premiums. A greater penetration of PPO enrollment in
commercial markets was negatively correlated to the number
of PDP options, and positively correlated to higher premiums.
Conversely, both commercial and Medicare HMO penetration
was positively correlated to the number of PDP options, and
negatively correlated to premiums. These findings suggest
that PDP plans may be more attracted, and offer lower
premiums, in regions with higher HMO penetration; the
opposite is the case in regions with a more dominant PPO
presence. Other factors that were positively correlated to the
number of PDP options included the number of physicians
per capita, whether a discount drug program was offered in
that region in 2003, and the diagnosis-based risk score;
negatively correlated to the number of PDP options was the
combined market share of the 3 largest private insurers in the
commercial market. Average premiums for PDPs in the
region was positively correlated to the percent of elderly in
poverty, and negatively associated with the percent of the work
force with union sponsored health coverage and the number
of general practice physicians.
Conclusions: PDP plans are widely available to Medicare
beneficiaries in all regions, though the number and cost of
these plans vary and are related to key PDP regional
characteristics. Our findings are generally consistent with
views expressed by PDP organizations, including that rural
regions would have fewer PDPs and face higher premiums;
and that the structure of health insurance markets in the PDP
regions would affect the viability of the new Part D products.
Implications for Policy, Delivery, or Practice: Regional
characteristics such as the rurality and the managed care
market may influence the number and costs of PDP options
for Medicare beneficiaries. Currently options are widely
available, however, attention to these characteristics may help
policy makers understand and predict where PDPs may be
successful in future years as the market for this benefit
matures.
Primary Funding Source: CMS
●Dollars to Doughnuts: Predicting Prescription Drug
Costs of Beneficiaries and the Medicare Program Under
Part D
M. Christopher Roebuck, Dominick Esposito, Meredith Lewis
Presented By: M. Christopher Roebuck, Health Economist,
R&D, Caremark, 11311 McCormick Road, Suite 230, Hunt
Valley, MD 21031; Tel: 410-785-2136;
Email: chris.roebuck@caremark.com
Research Objective: To examine drug utilization and out-ofpocket costs of Medicare beneficiaries using a Medicare
prescription drug discount card, including beneficiaries who
qualified for the Transitional Assistance Program (TAP).
Study Design: Data included eligibility and prescription
claims for enrollees in 34 separate Medicare drug discount
card programs managed by Caremark. We used claims data
to calculate annualized utilization and costs for beneficiaries
and, in turn, simulated Medicare beneficiaries’ out-of-pocket
costs (excluding premiums) and costs to Medicare under the
Part D benefit. We estimated a generalized linear model
(GLM; gamma distribution with log link function) for both
beneficiary costs and Medicare payments under Part D to
identify factors associated with drug expenditures. A probit
model for the likelihood of falling into the doughnut hole was
also specified. Explanatory variables in the models included
demographic characteristics (age, gender, region, and TAP
status), the generic dispensing rate, and 62 disease indicators
derived using a pharmacy-based classification system.
Population Studied: Beneficiaries enrolled for a minimum of
six months with at least one claim between June 2004 and
November 2005 (n=37,425). Participants were largely female
(67%), between the ages of 65 and 80 (70%), and had an
average of 2.2 medical conditions, with hypertension (52%),
hypercholesterolemia (27%), and diabetes (16%) being among
the most prevalent.
Principal Findings: On average, beneficiaries in the sample
filled 19 prescriptions at an annual cost of $538. Under the
standard Part D benefit, mean total drug expenditures for
these seniors would be $849 annually with $412 paid by the
beneficiary and $437 paid by Medicare. About 6% of these
beneficiaries have annual spending greater than $2,250 (the
benefit’s “doughnut hole”). TAP beneficiaries (46%) would
have higher out-of-pocket costs under Part D than the drug
discount card ($429 versus $256; p<0.001). Multivariate
analyses suggest a 10-percentage point increase in the generic
dispensing rate is associated with a drop in beneficiary costs
by $23 (p<0.001), a 0.5-percentage point reduction in the
probability of falling into the doughnut hole (p<0.001), and a
$42 decrease in Medicare payments (p<0.001).
Conclusions: TAP beneficiaries who do not qualify for
subsidized coverage under Part D will face higher out-ofpocket costs than under the discount drug card program,
assuming fixed drug utilization. Increased use of generic
drugs in proportion to brand name drugs would benefit the
Medicare program more than beneficiaries, on average, due to
the standard benefit’s structure.
Implications for Policy, Delivery, or Practice: In choosing
whether or not to enroll in Medicare Part D, seniors will
compare their annual premium with the expected payout of
the Medicare program. These results suggest the average,
risk-neutral beneficiary would only enroll at monthly premiums
below $36 ($437 divided by 12). If faced with higher out-ofpocket costs, low-income beneficiaries who do not qualify for
subsidies may reduce their prescription drug utilization
potentially resulting in adverse health effects. Finally, to
reduce costs to both beneficiaries and taxpayers, Medicare
should promote the substitution of generic medications
whenever possible. Assuming 29 million Medicare Part D
enrollees, the Medicare program could save more than $1.2
billion annually by increasing the generic dispensing rate 10%.
Primary Funding Source: Internal- Caremark
●Disease Burden and the Intensity of Medication Therapy
for Medicare Beneficiaries with Diabetes: Will Part D Make
a Difference?
Bruce Stuart, Ph.D., Thomas Shaffer, M.H.S., Linda SimoniWastila, RPh, Ph.D., Ilene Zuckerman, PharmD, Ph.D.
Presented By: Bruce Stuart, PhD, Professor, Peter Lamy
Center, University of Maryland Baltimore, 515 W. Lombard St.,
room 157, Baltimore, MD 21201; Tel: (410) 706-5389; Fax:
(410) 706-1488; Email: bstuart@rx.umaryland.edu
Research Objective: Guidelines for treating diabetes
emphasize the need to maintain glycemic control and to take
preventive measure to avoid hypertension, hyperlipidemia,
and common infections like influenza and pneumonia.
Medicare already covers flu shots and pneumonia
vaccinations, but coverage for blood glucose regulators,
antihypertensive agents, and lipid lowering agents has not
been universally available until this year under the MMA. This
paper is intended to assess the potential impact of Part D
coverage on Medicare beneficiaries with diabetes taking into
account the difficulties of managing diabetes for beneficiaries
with significant disease burden.
Study Design: This study categorized a national sample of
Medicare beneficiaries with diabetes into 10 mutuallyexclusive, equal-sized groups based on their cumulative
medical spending in 2001 (a proxy for disease burden). We
then computed the prevalence and annual utilization rates
within each group for 6 drug categories recommended for
treatment of diabetes (blood glucose regulators,
dyslipidemics, ACE-inhibitors, other antihypertensive agents,
annual flu shot, and pneumonia vaccination in the past 5
years). Group-specific robust regression models were
estimated for each drug class. Explanatory variables included
domains for demographic characteristics, income, drug
coverage, health status, and medical encounters. Chow tests
for significant differences in coefficient values across the 10
groups were conducted to identify the differential impact of
disease burden on factors predictive of the prevalence and
intensity of drug use.
Population Studied: 1,746 elderly and disabled Medicare
beneficiaries with 2 or more paid claims indicating diabetes
(ICD-9=250.xx, 357.2, 362.00-362.02, 366.41) In 2001 drawn
from community-dwelling respondents in the 2001 Medicare
Current Beneficiary Survey weighted to be nationally
representative.
Principal Findings: Annual population prevalence rates for
the 6 drug categories ranged from a low of 42% for
dyslipidemics to a high of 86% for antihypertensive agents.
The lowest prevalence rates were found in the groups with the
least disease burden. For 4 of the 6 drugs (blood glucose
regulators, dyslipidemics, flu shots and pneumonia
vaccinations) prevalence rates increased with disease burden
but then sharply declined in the top two groups. A similar
inverted “U” shape pattern was observed in the annual
utilization rates for the 4 chronic care drug categories.
Preliminary analysis indicates that these patterns are not
significantly reduced by adjustments for demographics,
income, drug coverage, and health status, but are highly
sensitive to medical encounters, particularly the number of
different physicians seen in the year.
Conclusions: Medicare beneficiaries with diabetes receive
suboptimal treatment for recommended drug therapies
particularly among those with minimal or significant disease
burdens (the highest prevalence rates and intensity of
treatment levels were found in the middle of the range of
disease burden).
Implications for Policy, Delivery, or Practice: Our analysis
indicates that expanded prescription coverage under the
Medicare Part D drug benefit is unlikely to significantly
improve these drug treatment patterns for Medicare
beneficiaries with diabetes. However, changes in disease
management programs that may be associated with the new
benefit may prove beneficial.
Primary Funding Source: CWF
●Prescription Drug Use and Expenditures Among Dually
Eligible Medicare and Medicaid Beneficiaries in 2001 Implications for the Medicare Part D Drug Benefit
James Verdier, J.D., Myoung Kim, Ph.D., Deo Bencio
Presented By: James Verdier, J.D., Senior Fellow, Research,
Mathematica Policy Research, Inc., 600 Maryland Ave., SW,
Suite 550, Washington, DC 20024-2512; Tel: (202) 484-4520;
Fax: (202) 863-1763; Email: jverdier@mathematica-mpr.com
Research Objective: To illuminate issues likely to arise in the
new Medicare Part D prescription drug benefit by examining,
both at the national and state levels, patterns of Medicaid
prescription drug use and expenditures in 2001 among dual
eligibles by beneficiary characteristics (age, gender, race, and
use of nursing facilities) and drug characteristics (brand
status, drug type, and statutory exclusion from Part D).
Study Design: Using Medicaid Analytic eXtract (MAX) 2001
files for 50 states and the District of Columbia released by the
Centers for Medicare and Medicaid Services (CMS) in 2005,
we created analysis files that enabled us to tabulate various
measures of dual eligible drug use and expenditure for each
state and the nation. We draw state-by-state comparisons and
examine national patterns of use and associated Medicaid
expenditures among dual eligibles in 2001, with comparisons
to MAX 1999 data.
Population Studied: All fee-for-service (FFS) Medicaid
beneficiaries who were eligible for Medicare and received full
Medicaid benefits in 2001. A limited number of dual eligibles
enrolled in capitated managed care arrangements were
excluded because of lack of data.
Principal Findings: While the results for 2001 cannot be
released until they been cleared by CMS, we expect clearance
in time for the meeting. We will be able to report comparative
state-by-state measures such as Medicaid expenditures on
prescription drugs for dual eligibles in 2001 as a share of total
Medicaid prescription drug expenditures, average annual perbeneficiary drug expenditures for dual eligibles under age 65
compared to those age 65 and over, drug expenditures for
dual eligibles residing in nursing facilities as a share of total
drug expenditures, the number of prescriptions filled per
benefit month among duals in nursing facilities compared to
those in the community, use of antidepressants and
antipsychotics by duals living in the community and in nursing
facilities, and use by dual eligibles of drugs statutorily
excluded from Part D coverage, such as benzodiazepines and
barbiturates.
Conclusions: There is wide variation among states in dual
eligible drug use and expenditures. Expenditures grew sharply
between 1999 and 2001. Dual eligible drug use by those
under age 65 and those in nursing facilities is substantially
higher than for those age 65 and over and those living in the
community. Use by dual eligibles of drugs statutorily excluded
from Part D is widespread, but varies significantly from state
to state.
Implications for Policy, Delivery, or Practice: With the start
of the new Medicare Part D prescription drug benefit in 2006,
drug coverage for over 6 million dual eligibles has shifted
from Medicaid to Medicare. Most of the health plans to
which duals have been assigned for Part D have little
experience with this population. The 2001 MAX data are the
most detailed and comprehensive comparative state-by-state
data on drug use by dual eligibles that will be publicly available
until and unless the Part D drug data for 2006 are released by
CMS, so they represent a major resource for both Part D plans
and those monitoring and analyzing Part D who seek to
anticipate and respond to the prescription drug needs of this
important population.
Primary Funding Source: CMS
Call for Papers
Medicare: Impact of Different Payment & Coverage
Policies on Utilization & Outcomes
Chair: Karen Milgate, Medicare Payment Advisory
Commission
Monday, June 26 • 10:30 am – 12:00 pm
●Medicare Advantage Plans: Different Payments,
Different Benefits
Brian Biles, M.D., M.P.H., Nora Super, Lauren Nicholas,
M.P.P.
Presented By: Brian Biles, MD, MPH, Professor, Department
of Health Policy, George Washington University, 2021 K St
NW, #800, Washington, DC 20006; Tel: (202) 416-0066; Fax:
(202) 543-5311; Email: bbiles@gwu.edu
Research Objective: The Medicare Moderization Act (MMA)
of 2003 sought to greatly increase the role of private health
plans in providing Medicare benefits to the elderly and
disabled. MMA policies included substantial increases in
payments to MA plans with the generaly understanding that
plans would use the additional funds to provide additional
benefits and attract additional plan enrollees. This study
analyzes the pattern and trends in Medicare payments to
Medicare Advantage plans and in the benefits provided by MA
plans in order to understand the value of Medicare Advantage
to the overall Medicare program and to MA plan enrollees.
Study Design: This study first analyzes the amounts paid to
MA plans both as the actual annual amount and relative to
average Medicare costs in the traditional fee-for-service (FFS)
system. This analysis is conducted at the county level. The
study next analyzes the benefits provided to MA plan enrollees
by comparing estimated out-of-pocket (OOP) costs for
enrollees in individual MA plans at the county level. OOP
costs are estimated for enrollees in good, fair and poor health.
The study finally analyzes the benefits provided to MA plan
enrollees, as indicated by estimated OOP costs, in different
regions, states and cities across the nation.
Population Studied: The study analyzes key factors in the
Medicare Advantage program including Medicare payment
policies, private plan decisions on the design of benefit
packages, and beneficary choices regarding enrollment in MA
plans. The analysis is conducted using data at the county
level aggregated to state and national levels.
Principal Findings: Study findings indicate that Medicare
payments to MA plans will exceed costs in the FFS system by
as much as $30 b over the next 5 years and will vary greatly
across the nation at the county level. Policies that pay MA
plans in rural areas as much as 20% more than FFS
contribute relatively little to total extra payments to plans,
primarily because MA plans have not attacted rural residents.
The major policy that leads to extra payments is the urban
floor that pays more to plans in metro areas with low FFS
costs. Findings indicate that OOP costs of MA plan enrollees
in poor health exceed total OOP costs of beneficaries with
Medigap coverage in more than one-third of cities studied. A
number of MA plans now have hospital deductables or copayments that can exceed $1,000 per stay. While monthly
Medigap premiums are substantially greater than MA
premiums, Medigap covers virtually all Medicare OOP costs
for acute care services. Study findings also indicate that there
is great variation across the nation in the extent to which MA
plans provide additional benefits to enrollees. Plans with
substantial additional benefits are concentrated in
approximately 20 cities, generally in the West and other areas
with a long-time history of Medicare managed care. Less
additional benefits are provided to beneficaries in rural areas
and many urban areas.
Conclusions: This study sheds light on the overall value of
the MA program as currently structured. Findings regarding
Medicare costs detail how the MA program costs more than
FFS due to a set of specific payment policies. Findings
regarding benefits suggest that the policies that allow
individual MA plans to design benefit packages have led plans
in a number of cities to set high OOP costs for the use of
health services. Additional benefits of MA plans are not
widely distributed across the nation.
Implications for Policy, Delivery, or Practice: The Medicare
Advantage program with its reliance on private plans to
control costs has been proposed as the foundation for a
solution to the long-range fiscal problems of the Medicare
program. To increase the role of MA plans in Medicare, the
MMA provided substantial increases in payment to plans to
the extent that MA plans are now paid more the average
Medicare FFS costs in every county in the nation. In 2005,
Congressional efforts to reduce the Federal budget deficit
began with a focus on reducing health spending by the
Medicaid program. Difficulty reaching agreement on
Medicaid reductions led to bipartisan proposals for Medicare
reductions, including reductions in extra payments to MA
plans. The final legislation includes a provision to reduce MA
plan budget neutral risk adjustment payments over the next 5
years by over $6 b. In an era of Federal deficits of $300 b a
year, the MMA policies that increase payments to MA plans
may well remain a major area of interest to policy makers.
Analysis of the specific policies that increase payments to MA
plans, as well as patterns in the amount of additional benefits
provided to MA plan enrollees and the extent of variations of
MA plan benefits across the nation, will be useful in these
deliberations.
Primary Funding Source: CWF
●Do Medicare Coverage Policies Matter?: Evaluating the
Impact of Coverage Policies on Utilization of Services
Susan Bartlett Foote, J.D., MA, Robert J. Town, Ph.D., Beth A.
Virnig, Ph.D.
Presented By: Susan Bartlett Foote, JD, MA, Associate
Professor, Health Services Research and Policy, University of
Minnesota School of Public Health, 420 Delaware Ave., S.E.,
MMC 729, Minneapolis, MN 55455; Tel: (612) 626-2851; Fax:
(612) 624-2196; Email: foote003@umn.edu
Research Objective: The Medicare program has invested
significant resources in the development of local and national
coverage policies. Coverage policies determine whether a
procedure or technology will be provided in the Medicare
program, and include details about the conditions under
which that coverage will be permitted. There is a growing
body of research on the development of coverage policies, but
little is known about their impact on practice patterns. The
principal objective of this project was to determine whether
and to what extent Medicare coverage policies matter. Do
policies affect utilization of services in Medicare? Are there
differences based on whether the policy affects new
technology or widely disseminated technologies? What is the
link to regional variation in the Medicare program?
Study Design: We analyzed Medicare claims data focused on
10 case studies pre- and post- issuance of a local or national
coverage policy to examine how trends in their use are
influenced by Medicare coverage decisions. We used
Medicare data from 2000-2002 in three Medicare claims files:
the MedPAR hospitalization file, the Outpatient file, and the
Carrier file. To analyze the data, we used a difference-indifference approach to identifying the impact of Medicare
policies on utilization. That is, we used a carrier fixed effects
framework that allows for autocorrelated errors.
Population Studied: Medicare beneficiaries receiving services
in our 10 case studies over a three year period.
Principal Findings: We found that in only one procedure,
deep brain stimulation, did the promulgation of a policy
impact utilization. In that case study, the issuance of a policy
significantly reduced utilization. For the other 9 cases, we
found no measurable effect before and after issuance of a
policy on utilization patterns.
Conclusions: We conclude that while Medicare’s coverage
policies may provide important information assessing the
value of a technology or procedure, Medicare’s policies don’t
appear to change provider behavior. Potential explanations
include the lack of detailed information on claims forms to
allow evaluation of compliance with policy provisions,
limitations on the use of computerized edits to review claims,
and the lack of resources or incentives to manually review
specific medical records which is the only way to assure
compliance with many parameters in coverage policies.
Implications for Policy, Delivery, or Practice: There are
significant policy and practice implications of these findings.
Medicare has invested major resources in the development of
local and national coverage policies. Medicare, however, has
not provided either the incentives or the tools for the
contractors who process the claims to monitor and enforce
compliance with coverage policies. These findings point to
the need for reconsideration of the way that claims are
reported and processed in Medicare. As the Medicare
program moves in the direction of quality improvement and
pay for performance, issues related to compliance with
carefully crafted, evidence-based coverage policies gain greater
salience for providers and policymakers alike.
Primary Funding Source: RWJF
●Race and Non-Adherence to Prescription Medications
Among Seniors: Results of a National Survey
Walid Gellad, M.D., Jennifer S. Haas, M.D., MSPH, Dana Gelb
Safran, Sc.D.
Presented By: Walid Gellad, M.D., General Medicine Fellow,
Division of General Medicine, Brigham and Women's
Hospital, 1620 Tremont Street, 3rd Floor, Boston, MA 02120;
Tel: (617)732-5500 x33513; Email: wgellad@partners.org
Research Objective: Prescription drug coverage is currently at
the forefront of public discussion in healthcare. Patient nonadherence to prescription regimens results in poorer control
of chronic health conditions. While non-adherence due to
financial factors (“cost-related non-adherence”) might be
addressed by drug coverage, other types of non-adherence will
not. Because of significant racial/ethnic disparities in the
prevalence of many chronic health conditions, we examined
whether reasons for non-adherence (cost, self-assessed need,
personal experience) varied by race and ethnicity among
seniors.
Study Design: Cross-sectional analysis of data from a 2003
national survey. Respondents were asked about nonadherence to prescriptions during the last 12 months,
specifically asking about cost-related non-adherence, nonadherence due to experiences (e.g. “ skipped doses because it
was making you feel worse”), and non-adherence due to selfassessed need (e.g.“ skipped doses because you felt you were
taking too many medicines).” We compared each of these
causes of non-adherence among races using Chi-square tests.
Multivariable logistic regression was used to calculate odds
ratios for each type of non-adherence, controlling for age,
insurance status, number of chronic conditions, and income.
Population Studied: Medicare beneficiaries greater than 65
years of age, who reported their race/ethnicity as white, black
or Hispanic and who reported taking at least one medication
(n=14,829).
Principal Findings: 41.5% of these seniors reported some
form of non-adherence. Blacks and Hispanics were more
likely to report cost-related non-adherence than whites (35.1%,
36.5%, 26.7% respectively, p=.0001). When asked if they had
“spent less on food, heat, or other basic needs to afford
prescriptions,” 11.3% of whites said yes, 26.6% of blacks, and
23.9% of Hispanics (p=<.0001). There were no racial/ ethnic
differences in non-adherence due to experiences or nonadherence due to self-assessed need (p all >0.39). Among
respondents who reported any non-adherence, there was a
significant relationship between race and the types of nonadherence reported (p<.0001): 38.9% of blacks and 41.4% of
Hispanics reported only cost-related non-adherence, versus
28.4% of whites. Blacks had 1.48 times the odds of being
non-adherent due to cost (95%CI 1.19,1.86) compared to
whites, and Hispanics had an odds ratio of 1.58 (95%CI
1.22,2.04), and these values did not change when controlling
for age, number of chronic conditions, and the presence of
drug coverage. When income was added to the model, race
was no longer a significant predictor for non-adherence due to
cost.
Conclusions: This 2003 national survey of seniors suggests
that racial/ ethnic disparities in non-adherence are largely
explained by cost concerns and not by self-assessed need or
differences in experience. The disparity in cost-related nonadherence persists even when accounting for the presence of
drug coverage, but the relationship is substantially attenuated
when income is taken into account.
Implications for Policy, Delivery, or Practice: Reducing
racial disparities in chronic diseases requires that prescription
cost issues be explicitly and aggressively addressed, both in
the clinic and in health policy, especially for the poor. This is
particularly important as outreach efforts are underway to
encourage low-income Medicare beneficiaries to sign up for
subsidies for the new drug benefit.
Primary Funding Source: CWF, Henry J. Kaiser Family
Foundation
●Effect of Physician Referral Patterns on Medicare
Utilization of Diagnostic Imaging
Rebecca Lewis, Mythreyi Bhargavan
Presented By: Rebecca Lewis, American College of Radiology;
Email: rebeccal@acr.org
Research Objective: Diagnostic imaging constitutes the
fastest growing component of Medicare costs, growing at a
rate of 10% per year between 1999 and 2003, and 18%
between 2003 and 2004 as reported by the Medicare Payment
Advisory Commission in its June 2005 data book. The
objective of this study is to examine the effect of physician
referral patterns on Medicare imaging use, while controlling
for beneficiaries’ demographic and clinical characteristics.
Study Design: Medicare physicians are classified into four
categories based on referral patterns for diagnostic imaging:
(i) self-referrers if the referring physician performs imaging
procedures on any of their patients, (ii) radiologist-referrers if
the referring physician always refers imaging to a radiologist,
(iii) same-specialty if the physician is not a self-referrer but
always refers patients to another physician of the same
specialty as himself or herself, and (iv) others. Physicians are
classified into these categories for each imaging technique
(for example, MRI, CT). For a set of diagnoses, such as heart
disease, knee pain, and back pain, we compare the rate of
imaging utilization ordering of physicians in each of these
categories, while controlling for patient characteristics such as
age, gender, race, whether the person has state buy-in for
Medicare, and characteristics of the state and county of
residence. Outcomes of interest are (a) whether a patient
receives an imaging procedure, and (b) imaging dollars per
patient. We use the Medicare 5% Limited Data Set claims
files for these analyses. All statistical analyses will use
standard techniques, such as logistic regression for outcome
(a) and linear or log-linear regression for outcome (b).
Population Studied: 5% sample of Medicare beneficiaries for
the period 2002-2004.
Principal Findings: Analysis of summarized Medicare claims
data reveal that imaging utilization by non-radiologists in nonhospital settings grew substantially faster than imaging by
radiologists. During the period 2000-2003, the costs of inoffice CT by non-radiologists grew, on average, at 26.5% per
year and the costs of in-office MRI at 27.9% per year. The
corresponding growth rates for imaging by radiologists are
14.4% for CT and 12.7% for MRI. This suggests that the rate
of imaging ordered by self-referrers and same-specialty
referrers may differ significantly from imaging ordered by
radiologist referrers. This study will measure those
differences.
Conclusions: We do not have any specific conclusions at this
point. Analysis results will reveal whether referral patterns
explain the recent growth in imaging utilization among
Medicare beneficiaries.
Implications for Policy, Delivery, or Practice: Much of the
recent growth in healthcare expenditures may be explained by
technological progress in medicine, i.e., the fact that medicine
can do more for each patient now than it could several years
ago. However, this growth has been found to be highly
variable across geographical areas, sub-populations, and
physicians. Identifying the part of variability that can be
attributed to physician referral patterns will assist payers and
policy makers design optimal educational initiatives to help
ensure physicians make appropriate utilization of diagnostic
imaging.
Primary Funding Source: No Funding
●Drug Use in Severely Mentally Ill Medicare Beneficiaries:
Impact of Discontinuities in Drug Coverage
Ilene Zuckerman, Ph.D., PharmD, Linda Simoni-Wastila, RPH,
Ph.D., Christopher Blanchette, MS, Bruce Stuart, Ph.D.
Presented By: Ilene Zuckerman, PhD, PharmD, Associate
Professor, Lamy Center on Drug Therapy and Aging,
University of Maryland Baltimore School of Pharmacy, 515 W.
Lombard Street, Room 163, Baltimore, MD 21201; Tel: 410706-3266; Fax: 410-706-1488;
Email: izuckerm@rx.umaryland.edu
Research Objective: The purpose of this study is twofold: To
1) describe the extent of drug benefits possessed by severely
mentally ill Medicare beneficiaries and 2) determine how gaps
in drug benefits influence use of prescription medications
used to treat mental illness.
Study Design: This study uses an observational cohort
analysis using ordinary least squares regression, adjusting for
sociodemographics, health status, comorbidities, and death.
The primary outcome measures are total mental health drug,
antidepressant and antipsychotic utilization, assessed as total
counts of drugs used over 3 years. Gaps in drug benefits are
measured as proportion of months not covered over three
years, and reported categorically (0 gaps (full drug coverage),
1-24% gaps, 25-49% gaps, 50-74% gaps, 75-99% gaps, and
100% gaps (no coverage). Outcome and drug coverage gap
measures are annualized, and account for time lost to death
and loss-to-follow-up.
Population Studied: The population studied is a pooled
sample of three, 3-year cohorts of community-dwelling,
severely mentally ill disabled and aged Medicare beneficiaries
derived from the 1997 - 2001 Medicare Current Beneficiary
Survey. Severe mental illness is assessed based on the
existence of 2 or more relevant ICD-9 codes extracted from
Part A and B claims.
Principal Findings: Among our sample representing over 2.5
million SMI beneficiaries, over half (54.4%) had full drug
coverage and 18.9% had no coverage. Controlling for
sociodemographic and clinical confounders, beneficiaries with
drug coverage gaps received 2.2 to 3.8 fewer mental health
drugs annually than their fully covered peers, with those
experiencing a 25-49%, 75-99% and 100% drug coverage gaps
impacted the most severely (-3.7, -3.8, and -3.7 prescriptions,
respectively). Drug coverage gaps involving the antipsychotics
followed a similar pattern, while antidepressant use was not
as dramatically impacted. Among antidepressant users, only
those experiencing 50-74% and 100% coverage gaps receiving
significantly fewer antidepressants annually (-1.3 and -1.7,
respectively).
Conclusions: This study is the first to demonstrate that any
discontinuity in drug benefits can adversely impact use of
mental health drugs in severely mentally ill Medicare
beneficiaries. Because such coverage gaps in drug coverage
are possible under the Medicare Modernization Act's
"doughnut hole" design, this study provides an important first
glimpse at what might happen to severely mentally ill
individuals who enroll in the Part D plan. Such reductions in
utilization of these important medications for this frail
population may lead to adverse consequences, including
symptom breakthrough, impaired cognitive function, and even
mortality.
Implications for Policy, Delivery, or Practice: As state and
Federal policy-makers implement and evaluate the Part D
component of the Medicare Modernization Act, further
scrutiny of its impact on this medically vulnerable group is
warranted. Further research is needed to examine outcomes
associated with disruptions in pharmacologic treatment.
Primary Funding Source: RWJF
Related Posters
Medicare & Medicare Prescription Drugs
Poster Session A
Sunday, June 25 • 2:00 pm – 3:30 pm
●The Heart of the Matter: Cardiovascular Health Issues
Among Adult Patients Using Stimulant Medications for
ADHD and Narcolepsy
Karyn Kai Anderson, Ph.D., M.P.H.
Presented By: Karyn Kai Anderson, Ph.D., M.P.H., social
science research analyst, Office of Research, Development and
Information, Centers for Medicare and Medicaid Services,
7500 Security Blvd., C3-20-17, Baltimore, MD 21244-1850;
Tel: (410)786-6696; Fax: (410)786-5534;
Email: karyn.anderson@cms.hhs.gov
Research Objective: With reports of sudden death and other
cardiovascular events occurring in individuals taking
medications for ADHD and narcolepsy, the FDA announced in
the first week of the new year, 2006, that it will launch a new
probe into the safety of these drugs. This newfound alarm
also brings focus to the patient care guidelines ill advising
against prescribing stimulant medications to those diagnosed
with a heart-related condition. While most attention is given to
pediatric use of stimulant medication, it is plausible that these
complications may be especially pronounced among older
adults. Given the importance of these issues coupled with the
dearth of extant research, we used CMS data to investigate the
extent to which stimulant medications are prescribed to adult
dual eligible beneficiaries (i.e., those eligible for both Medicaid
and Medicare) with preexisting heart conditions.
Study Design: The sample was a 5% extraction of Medicare
beneficiaries that was then matched to Medicaid claims files
(N=285,448). Medicare eligibility data from 1999 was
matched to prescription drug claims data from 2000. A key
variable under study included cardiovascular diagnosis as
indicated by ICD-9 codes for hypertensive disease (401-405),
ischemic heart disease (410-414), diseases of pulmonary
circulation (415-417), other forms of heart disease (420-429),
and cerebrovascular disease (430-438). Use of stimulant
therapy was denoted by NDC codes for the following ADHD
and narcolepsy medications on the market between 1999 and
2000: Adderall, Ritalin, Dexedrine, dextroamphetamine sulfate
AND amphetamine sulfate, Cylert, and Methylin ER.
Population Studied: The population studied was the adult
"dual eligible" population (i.e., those eligble for both Medicare
and Medicaid).
Principal Findings: As expected, only a small portion of this
mostly elderly dual eligible population had taken medication
for ADHD or narcolepsy (0.05%). Overall 47.89% of this
sample had a diagnosis for a cardiovascular condition. Of the
154 that had a prescription for a stimulant medication, 33.77%
(52) had been diagnosed with some type of cardiac diagnosis
prior to or while being prescribed stimulants. Specifically,
among stimulant users, 16.23% had a prior or concurrent
diagnosis of hypertension, 5.84% had ischemic heart disease,
8.44% had other forms of heart disease including dysrythmia
and heart failure and 3.25% had a cardiovascular disease or
stroke.
Conclusions: The findings from this study suggest
unequivocally that minimum precautions are not being
adhered to in terms of screening older adults for heart-related
conditions prior to and while treating ADHD and narcolepsy
with stimulants.
Implications for Policy, Delivery, or Practice: In the current
debate regarding the safety of stimulant medications, very
little attention has been given to physicians’ adherence to
counterindication guidelines. Clearly, medical screening and
ongoing health monitoring should have a strong role in
treatment plans for patients with ADHD and narcolepsy.
Primary Funding Source: CMS
●Recent Trends in Use of Generic Drugs among Medicare
Beneficiaries and Their Potential Impact on Out of Pocket
Costs under Medicare Part D
Jessica Banthin, Ph.D., G. Edward Miller, Ph.D.
Presented By: Jessica Banthin, Ph.D., Division Director,
Center for Financing, Access and Cost Trends, AHRQ, 540
Gaither Rd., Rockville, MD 20850; Tel: 301-427-1678;
Fax: 301-427-1276; Email: Jbanthin@AHRQ.GOV
Research Objective: With the start of Medicare Part D in
2006, there may be more pressure for Medicare beneficiaries
to switch from brand name to generic drugs. Many of the
Medicare Part D plans provide better coverage for generics
than for brand name drugs in the same class. In addition,
some widely used drugs will lose patent protection in the near
future. We document the role of generic drugs over time in
some of the most expensive categories of drugs used by
Medicare beneficiaries. We then simulate the potential impact
on out of pocket costs of increased substitution of generic for
brand name drugs under several specific Medicare Part D
plans.
Study Design: Until Medicare Part D claims data are
available, the Medical Expenditure Panel Survey provides
some of the most accurate and nationally representative data
on Medicare beneficiaries’ use of and expenditures on
prescription drugs. The MEPS verifies household reports with
claims data collected from pharmacies. Using the National
Drug Code, these data are linked to secondary data.
The first part of our analysis provides a comprehensive view of
recent trends from 1997 to 2003 in total drug expenditures for
the Medicare population and for key subpopulations such as
dual eligibles. We identify the fastest growing clinical classes
of drugs and decompose aggregate trends into changes in
population with use and changes in expenditures per user for
each class. We then estimate changes in the percent of
prescriptions that are generic versus brand and identify
classes where generic drugs have played a large role or may in
the future. The second part of the analysis simulates the
changes in total and out of pocket costs for beneficiaries
under a sample of popular Part D plans when generics are
substituted for brand name drugs. We focus on beneficiaries
with common chronic conditions where generic drugs are or
will be available for treatment, including statins, anti-diabetic
drugs, anti-depressants, pain relief and gastro-intestinal drugs.
We examine the impact from the perspective of individuals
with chronic conditions and take account of their current
coverage, if any, compared to the coverage offered under
Medicare Part D.
Population Studied: Total Mediare population, with a focus
on dual eligibles, persons with chronic conditions, and
persons without coverage.
Principal Findings: Using data from 2001, earlier work
showed that the fastest growing categories of drugs among
Medicare beneficiaries included statins, proton pump
inhibitors, anti-diabetic agents, antipsychotics and
antidepressants. There is substantial variation in the
availability of generic drugs within these categories, ranging
from a low of 5 percent of prescriptions for statins to a high of
46 percent for all types of psychotherapeutic drugs. Final
results will update these findings and simulate future
scenarios.
Implications for Policy, Delivery, or Practice: The true costs
of Medicare Part D are difficult to predict given the uncertain
enrollment but nationally representative data on beneficiaries’
current use of generic drugs provides a baseline from which
further savings are then estimated. This analysis indicates the
degree to which Part D plans may protect beneficiaries from
high out of pocket costs for some common chronic
conditions.
Primary Funding Source: AHRQ
●Medicare Prescription Drug Program: Report of Findings
from Cognitive Interviws to Develop Measures for the
CAHPS-PDP Survey Module
Julie Brown, Pam Dardess, Ph.D., Amy Heller, Ph.D., Kristin
Carman, Ph.D.
Presented By: Julie Brown, Director, Survey Research Group,
RAND Corporation, 1776 Main Street, PO Box 2138, Santa
Monica, CA 90407-2138; Tel: (310) 393-0411 ext. 6212; Fax: ;
Email: Julie_Brown@rand.org
Research Objective: The Medicare Part D prescription drug
program (PDP) presents beneficiaries with many choices.
Providing senior citizens with information about the quality of
prescription drug plans allows them to choose the best plan
for their needs. The Consumer Assessment of Healthcare
Providers and Systems (CAHPS®) program is a public-private
initiative to develop standardized surveys of patient
experiences. These survey results are reported to consumers
to use as a decision aid. The objective of the current research
effort is to use cognitive interviews to inform the development
of a CAHPS-PDP survey module that will allow beneficiaries to
report their experiences and satisfaction with their Medicare
Prescription Drug Plans.
Study Design: This paper presents the findings from 30
cognitive interviews conducted in late winter, 2006, with ten
interviews in each of three heterogenous regions of the
country. Cognitive interviews provide a unique opportunity to
learn how well matched are researchers’ and respondents’
understandings of the meaning of candidate survey items.
Cognitive testing involves intensive one-on-one interviews
with members of the target survey population. During these 2hour interviews, candidate survey questions are administered
and the cognitive interview subjects are concurrently debriefed
with regard to what they thought the questions were asking,
how they formulated their responses, and whether or not their
answers fit into the offered response categories.
Population Studied: These cognitive interviews are
conducted with Medicare beneficiaries, aged 65 and older, in
three distinct regions of the US: in New England, the MidAtlantic, and in California. Subjects are recruited to represent
as diverse a group as possible with regard to race, ethnicity,
and level of education.
Principal Findings: Based on the results of the 12 focus
groups we conducted at an earlier stage of instrument
development and subsequent refinement from cognitive
testing, items to measure satisfaction with prescription cost
structure, ease of filling and refilling prescriptions, pharmacy
access, PDP services, etc. were developed.
Conclusions: These cognitive interviews will inform both item
reduction and the modification of individual question wording
for the item set that will comprise the CAHPS-Medicare
Prescription Drug Program survey module.
Implications for Policy, Delivery, or Practice: The Medicare
PDP is a complex and significant undertaking for CMS.
Currently, many products and offerings have been developed,
creating an overload of information for some seniors. Both
CMS and beneficiaries need information on the quality and
performance of plans to make informed decisions about
PDPs. The CAHPS-PDP instrument will provide such
information from the consumer perspective, allowing CMS
and others to assess consumers’ experience with the
prescription drug benefit. The data may be used for quality
improvement as well as for patient decision making.
Primary Funding Source: CMS, AHRQ
●Prescription Drug Utilization Among the CommunityDwelling Elderly Population from the 2003 Medical
Expenditure Panel Survey
Joey Crosby, Ph.D, R.Ph, Rod McAdams, Ph.D.
Presented By: Joey Crosby, Ph.D, R.Ph, Associate Professor of
Health Sciences, Health Sciences, Armstrong Atlantic State
University, 11935 Abercorn St., Savannah, GA 31419;
Tel: (912) 921-7316; Fax: (912) 921-7350;
Email: crosbyjo@mail.armstrong.edu
Research Objective: To estimate patterns of prescription
drug utilization among the non-institutionalized elderly
population in 2003 using data from the Medical Expenditure
Panel Survey.
Study Design: Descriptive, cross sectional
Population Studied: Non-institutionalized, Medicare-eligible,
elderly population living during 2003.
Principal Findings: Compared with earlier studies, the
economic burden of prescription drug utilization among the
community-dwelling elderly population (greater than or equal
to 65 years of age in 2003) continued to increase, with the
average elderly person consuming approximately 27
prescriptions, expending over $1600 total and $875 out-ofpocket, translating into an out-of-pocket burden of 53% of total
spending. This economic burden varies significantly across
subgroups of the non-institutionalized elderly population
stratified by demographic, income, and health status
categories, with females, the poor, and those reporting lower
levels of physical health facing a larger total burden.
Conclusions: The economic burden of prescription drug
utilization continued to increase during 2003 for the noninstutionalized elderly population compared with previous
years, with more socially vulnerable subgroups facing the
largest economic burden overall.
Implications for Policy, Delivery, or Practice: The Medicare
Modernization Act of 2003, which added a prescription drug
benefit to the Medicare program after 40 years of existence,
was enacted to address the perceived growing economic
burden with respect to prescription drug use within the elderly
population. As the future cost of such a benefit grows beyond
initial projections, it may be necessary to adjust future benefits
as some point so as to target those subgroups that are most
in need of subsidization. This study, and others like it, assists
with the identification of such groups.
Primary Funding Source: No Funding
●Medicare Chronic Condition Data Warehouse
Debbie Dean, MS, Brian O'Donnell, Ph.D., Kathy Schneider,
Ph.D., Debbie Dean, MS
Presented By: Debbie Dean, MS, Manager, Health
Informatics, Information Systems, Health Informatics, Iowa
Foundation for Medical Care, 6000 Westown Parkway, West
Des Moines, IA 50266; Tel: (515) 440-8656; Fax: (515) 457-3793;
Email: ddean@ifmc.org
Research Objective: As part of the Medicare Modernization
Act of 2003 (MMA), the Chronic Condition Warehouse
(CCW), a research database, has been launched by the
Centers for Medicare & Medicaid Services (CMS). Section 723
of the MMA outlined a plan to “improve the quality of care
and reduce the cost of care for chronically ill Medicare
beneficiaries.” An essential component of this plan was to
establish a data warehouse that contained various types of
Medicare data from multiple settings and providers. The
CCW provides the research community with beneficiary
enrollment, health services, and assessment data. These
sources are linked across the continuum of care by a unique,
unidentifiable beneficiary key to construct a patient-centric
view of enrollment and service utilization. Goals for the CCW
include improving the quality of care for chronically ill
Medicare beneficiaries, reducing program spending, and
making current Medicare program data more readily available
to researchers studying chronic illness in the Medicare
population.
Study Design: The Iowa Foundation for Medical Care (IFMC)
contracted with CMS to design, implement, and support this
extensive patient-level continuum of care database. For a 5%
random sample of Medicare beneficiaries, data for care
received in inpatient, outpatient, home health, skilled nursing,
hospice, and nursing home settings, as well as durable
medical equipment services, are available from 1999 forward.
Future plans for the CCW may include the addition of
Medicare prescription drug event and Medicaid data.
Population Studied: A 5% random sample of Medicare
beneficiaries from 1999 forward.
Principal Findings: The CCW links beneficiary enrollment,
health services, and assessment data across the continuum of
care.
Conclusions: The CCW is a new and valuable resource for the
research community to study health services, including quality
of care, cost, utilization, outcomes and other areas of interest
for Medicare beneficiaries, across care settings.
Implications for Policy, Delivery, or Practice: While data for
all beneficiaries in the sample are available, researchers may
request data for a specific, predefined cohort based on a set of
twenty-one common chronic condition categories. These
conditions include diabetes, chronic obstructive pulmonary
disease, congestive heart failure, osteoporosis, depression,
five types of cancer (i.e., breast, colorectal, prostate, lung and
endometrial), and other prevalent chronic diseases. The
preset cohort definitions will assist in simplifying and
expediting the fulfillment of research requests, and allow for
more cost efficient methods of delivering data files to
researchers. Additionally, researchers may request data based
on diagnosis and procedure categorization schemes or
assigned comorbidities as defined by the Agency for
Healthcare Research and Quality (AHRQ) Clinical
Classification Software or Comorbidity Software. These tools
allow for grouping of AHRQ-defined conditions and
procedures, or assigning variables that identify comorbidities
included in hospital discharge records, based on the
International Classification of Disease, Ninth Edition, Clinical
Modifications. Lastly, researchers may customize research
requests for unique beneficiary populations specific to their
research focus. For example, a researcher may be interested
in a chronic condition not already predefined by the CCW
project. A review board will work closely with researchers to
refine all data requests and ensure requests incorporate all
relevant data files, fields, and time frames. The various data
types available to researchers, as well as the data fields,
selection, output and delivery options will be discussed during
this presentation.
Primary Funding Source: CMS
●Mood Disorder Costs During Inpatient Rehabilitation
Deborah Dobrez, Ph.D., Allen Heinemann, Ph.D., Anne
Deutsch, Ph.D.
Presented By: Deborah Dobrez, Ph.D., Assistant Professor,
Health Policy and Administration, University of Illinois at
CHicago, 1603 West Taylor Street, Chicago, IL 60618; Tel: 312413-8854; Fax: 312-996-5356; Email: ddobrez@uic.edu
Research Objective: Mood disorder diagnoses may
complicate service delivery during inpatient rehabilitation care,
increasing the intensity of resource needs and length of stay.
Although payment is adjusted for specific patient
characteristics and the presence of many comorbidities, under
Medicare’s prospective payment system, no adjustment in
reimbursement is made for mental disorders, raising concern
that facilities may be burdened with additional,
uncompensated cost for providing care to patients with
mental disorders, and that access or quality of care may be
negatively affected. The objective of this study was to estimate
how the presence of a mood disorder affects the cost of
rehabilitative care, the extent to which reimbursement is
indirectly affected.
Study Design: Episode payment and length of stay were
compared between patients with and without mental
disorders. The relationship between case mix group
assignment, comorbidity-related adjustments in payment, and
the presence of mental disorders was estimated. Multiple
linear regression was used to estimate the effect of mental
disorders on length of stay, controlling for patient
characteristics.
Population Studied: Data were drawn for Medicare stroke
from the American Medical Rehabilitation Providers
Association subscription database, eRehabData, for 20022004. Exclusion criteria included death during the
rehabilitative stay or transfer to an institutional setting within
three days. Patients with mood disorders were identified by
ICD-9-CM codes recorded in the Inpatient Rehabilitation
Facility – Patient Assessment Inventory.
Principal Findings: 80,764 patients were identified during the
three year study period, 14% of whom had a mood disorder.
Mood disorders were associated with a nearly one day
increase in length of stay. Although payment is not directly
adjusted for the presence of mood disorders, prospective
payment reimbursements were estimated to be $750 more for
patients with mood disorders. Patients with mood disorders
were more likely to be younger and have lower admission
function (p < 0.01), resulting in a more highly reimbursed
case-mix group. However, patients with mood disorders were
less likely to have a comorbidity that would result in an
increase in reimbursement (p < 0.05). Overall, patients with
mood disorders had one-third of a day longer stays relative to
patients without mood disorders, after adjustment for factors
that indirectly increase payment.
Conclusions: Patients with mood disorders have longer
length of stays that are indirectly reimbursed in part by related
patient characteristics and comorbidities in Medicare’s
Prospective Payment System. However, mood disorders are
likely to affect patients’ needs during the stay, so that actual
costs may be much higher.
Implications for Policy, Delivery, or Practice: An adjustment
in reimbursement for the presence of a mood disorder would
bring Medicare reimbursement in to line with facility
treatment costs. The failure to directly compensate facilities
for providing care to patients with mood disorders may result
in reduced access to care for these patients, or unmet need
during the rehabilitative episode. New or continuing episodes
of mood disorders should be diagnosed and treated early in
the acute care or rehabilitative stay to directly address the
mood disorder, and to improve the ability of the patient to
participate in the rehabilitative process.
Primary Funding Source: National Institute for Disability and
Rehabilitation Research
●Transitioning Dually Eligible Individuals with Mental
Disorders to Medicare Part D: A Simulation of Effects on
Access to Care
Julie Donohue, Ph.D., Richard Frank, Ph.D., Arnold Epstein,
M.D., MA
Presented By: Julie Donohue, Ph.D., assistant professor,
Health Policy and Management, University of Pittsburgh, 130
DeSoto Street Crabtree Hall A613, Pittsburgh, PA 15261; Tel:
412-624-4562; Fax: 412-624-3146; Email: jdonohue@pitt.edu
Research Objective: Over 6 million Medicare beneficiaries
receive drug benefits through Medicaid (dually-eligible).
Mental disorders are highly prevalent among the duallyeligible and most Medicaid programs provide generous
coverage with few restrictions on psychotropic drugs. Duallyeligible beneficiaries suffer a higher prevalence of chronic
conditions than non dually-eligible beneficiaries and higher
drug expenditures. In 2006, dually-eligible beneficiaries will
transition from Medicaid drug coverage to a Medicare Part D
prescription drug plan. Medicare drug plans vary widely in
terms of cost sharing and formulary inclusion. Further, drug
plans bear financial risk for management of drug benefits
which introduces an incentive to restrict use of costly
medications like psychotropic drugs through the use of
formularies. In this work, we analyze the potential impact of
transitioning to Medicare Part D drug plans on dually-eligible
Medicare beneficiaries with mental disorders.
Study Design: We profiled prescription drug use and
spending patterns among dually-eligible Medicare
beneficiaries with mental disorders using utilization
information from the Medicare Current Beneficiary Survey. We
obtained estimates of the most commonly used psychotropic
medications among this population. Second, we obtained a
sample of 14 Medicare Part D drug plans and extracted
information on formulary coverage and pharmacy
management tools for these commonly used medications.
We used the results of those two inquiries and estimated the
number of dually eligible beneficiaries with mental disorders
who would be affected by restrictions on specific medications.
Population Studied: Disabled and aged Medicare
beneficiaries who have mental disorders and are duallyeligible.
Principal Findings: Fifty-nine percent of dually-eligible
disabled and 20 percent of dually-eligible aged beneficiaries
have been diagnosed with a mental disorder. The most
commonly used psychotherapeutic classes among disabled
beneficiaries with mental disorders are antidepressants,
antipsychotics and mood stabilizers. Antidepressants,
benzodiazepines and antipsychotics are the most commonly
used psychotropic drugs among dually-eligible elderly with
mental disorders. Eighty six percent of Medicare drug plans
covered the 10 most commonly used antidepressants and 74
percent covered all 10 of the most commonly used
antipsychotics. The application of pharmacy management
tools to psychotropic drug categories is prevalent among
Medicaid drug plans. Among the plans analyzed, 57 percent
imposed quantity limits on commonly used psychotropic
drugs, 36 percent required prior authorization, and 14 percent
required step therapy. Depending on their particular
condition, we estimate that approximately one-quarter to twofifths of dually-eligible beneficiaries will be subject to these
utilization management policies.
Conclusions: Mental disorders are highly prevalent among
dually-eligible Medicare beneficiaries. Substantial numbers of
the dually eligible will be automatically enrolled in plans that
place restrictions on commonly used psychotropic
medications. Depending on how these utilization
management programs are implemented, the transition to
Medicare drug plans could result in high out-of-pocket costs
and lead to reductions in medication adherence for this
vulnerable population.
Implications for Policy, Delivery, or Practice: Reductions in
use of psychotropic medications among the dually eligible
could lead to negative health outcomes and increased service
utilization. It will be important for the Medicare program to
monitor the use of pharmacy management tools for ensuring
access to medications.
Primary Funding Source: NIMH
●Structural Implications of the Medicare Modernization
Act for the Broader Health Care System
Robert Field, J.D., M.P.H., Ph.D.
Presented By: Robert Field, J.D., M.P.H., Ph.D., Associate
Professor of Health Policy and Director, Health Policy
Program, Health Policy, University of the Sciences in
Philadelphia, 600 South 43rd Street, Philadelphia, PA 19066;
Tel: 215-596-7618; Fax: 215-596-7614; Email: r.field@usip.edu
Research Objective: Identify features of the Medicare
Modernization Act of 2003 (MMA), which implemented the
outpatient prescription drug benefit, that could profoundly
affect the larger health care system.
Study Design: Policy analysis of provisions of the MMA and
consideration of their political context.
Principal Findings: In its present form, the MMA could have
the following long-term structural effects on American health
care: Move Medicare overall closer to a managed care
voucher model. Revitalize managed care in the private
market. Shift the focus of pharmaceutical research toward
those cateogories of illness favored by the law (those with
more required formulary categories). Encourage greater price
sensitivity in pharmaceutical marketing and promote greater
use of pharmacoeconomics. Reduce the attractiveness of
Medicaid as a funding mechanism for long-term care and
increase the federal role in its operation. Reduce the
effectiveness of state pharmacy assistance programs.
Conclusions: If the MMA remains in its present form, its
influence will extend well beyond prescription drug availability
to include profound structural effects throughout the health
care system. It is important that policy debates place greater
emphasis on these issues, which are largely neglected in most
public discussions of the law.
Implications for Policy, Delivery, or Practice: Whatever the
outcome of the 2006 Congressional elections, Congress will
have to consider at least some revisions of the MMA. Public
appreciation of broader implications of the law could affect
Congresssional debates.
Primary Funding Source: No Funding
●Loss of Brand-Name Drug Coverage: Inhaled Steroid Use
by Medicare Beneficiaries with Asthma
Vicki Fung, Richard Brand, Ph.D., John Hsu, M.D., M.B.A.,
M.S.C.E.
Presented By: Vicki Fung, Consulting Data Analyst, Division
of Research, Kaiser Permanente, 2000 Broadway, 3rd Floor,
Oakland, CA 94612; Tel: 510-891-3527;
Email: vicki.fung@kp.org
Research Objective: Eliminating brand-name drug coverage
is increasingly common, especially for Medicare Advantage
beneficiaries. Little is known about the effects of losing brandcoverage, and in particular, for patients prescribed drugs
without generic alternatives, such as inhaled steroids. In
2004, Medicare beneficiaries in a large integrated delivery
system (IDS) lost coverage for brand-name drugs. We
examined the effect of this change on inhaled and oral steroid
expenditures and use in 2003-2004.
Study Design: We used automated data from Kaiser
Permanente–Northern California (KPNC). Using annual
difference-in-difference linear regression models, with a
concurrent Medicare control group, we examined coveragerelated changes in total and patient out-of-pocket costs for
inhaled steroids; and use of inhaled and oral steroids
(proportion of days covered, PDC). We used similar logistic
regression models to examine changes in adherence
(PDC>=80%). We adjusted for sex, age, race/ethnicity,
neighborhood socioeconomic status, comorbidity level
(DxCG), chronic disease status, baseline inhaled steroid dose,
prior oral steroid use, and a high-risk asthma registry flag.
Population Studied: All 2,211 subjects were IDS asthma
registry members, continuously enrolled (2003-2004), age
65+, who had inhaled steroid use in 2002-2003, and no
chronic obstructive pulmonary disease diagnosis or
ipatropium bromide drug use. Starting in 2004, 73.3% of
these subjects switched from paying a $30 copayment for
brand drugs, with a $1,000 annual benefit cap, to paying full
price, with no other limits; 26.7% paid $15-25 copayments for
brand drugs in both years.
Principal Findings: Loss of brand-coverage was associated
with increased mean annual patient out-of-pocket costs
(difference-in-difference=+$57 dollars, p-value<.0001) and
decreased total inhaled steroid expenditures (difference-indifference=-$115, p-value<.0001) in 2004. Overall, the
coverage change was not associated with significant decreases
in inhaled steroid use or adherence; however, adherence levels
were low, and lower for subjects with no brand- versus brandcoverage (21.9% and 29.3%, respectively). On average, out-ofpocket price increases after the policy change were smaller for
the IDS’s preferred ($30-copayment to $45 for the median
prescription) versus non-preferred brands ($30-copayment to
$238 for the most commonly prescribed drug). Among
subjects receiving non-preferred brands in 2003, use of these
drugs decreased in 2004 (difference-in-difference=-14.9%
PDC, p-value=<.0001), without a concomitant increase in use
of less expensive substitutes (difference-in-difference=-0.4%,
p-value=0.90). Oral steroid use did not significantly increase
after the coverage change.
Conclusions: Loss of brand-coverage was associated with
higher out-of-pocket and lower total expenditures for inhaled
steroids. Adherence levels for inhaled steroids were low
overall, and lower among patients with less generous benefits,
but did not significantly decrease with the loss of brandcoverage. Patients taking non-preferred inhaled steroids
decreased use, but did not switch to less expensive
substitutes after losing brand-coverage.
Implications for Policy, Delivery, or Practice: Within this
IDS setting, loss of brand-coverage was not associated with
lower inhaled steroid adherence; however, the IDS offered a
relatively inexpensive brand option, and might monitor drug
use more closely compared with other settings. Additional
efforts are needed to encourage efficient drug choices and
improve adherence. Future research will examine adherence
levels, the behaviors of non-preferred brand users, and the
clinical effects associated with this policy change.
Primary Funding Source: AHRQ
●Prescription Drug Plan Choices of Dual Eligibles in New
Hampshire
Thomas Grannemann, Ph.D., Stefanie Johnson, M.B.A.,
Donald Hunter, M.P.A.
Presented By: Thomas Grannemann, Ph.D., Senior Health
Policy Analyst, Office of Medicaid Business and Policy, State of
New Hampshire, 129 Pleasant Street, Concord, NH 03301; Tel:
603-271-4404; Fax: 603-271-8431;
Email: tgrannemann@dhhs.state.nh.us
Research Objective: This study measures the extent to which
dual eligibles took action to enroll in the Prescription Drug
Plan of their choice and effectively made choices that resulted
in in less restrictive coverage of the drugs they used or were
likely to use.
Study Design: This study uses PDP enrollment data provided
to the state by CMS, information on drug coverage provided
by the PDPs, and state Medicaid enrollment and claims data
on recipient characteristics, diagnoses, and prior use of drugs
and services. It considers each of the major dual subgroups:
the elderly, physically disabled, mentally disabled, and working
poor. It focuses on high-cost drugs commonly used by many
elderly and disabled Medicaid recipients. It distinguishes
individual PDPs by their coverage restrictions for these drugs
(tier assignment, required copayments, utilization
restrictions). We use multiple regression analysis to identify
factors associated with choosing a plan other than that
assigned and predictive factors affecting the specific plan
chosen.
Population Studied: 19,000 dual eligibles in New Hampshire
at the start of 2006
Principal Findings: For each of the groups of dual eligibles,
the paper shows (1) the extent to which the dual eligibles took
advantage of the option to switch from a plan selected by
auto-enrollment and (2) the extent to which such switches
resulted in less restrictive coverage of drugs currently used or
commonly used by duals.
Conclusions: The propensity of duals to select or change
PDPs in the first months of the Medicare drug benefit differed
among the elderly, physically disabled, mentally disabled and
depended on presences of chronic conditions and prior use of
prescription drugs.
Implications for Policy, Delivery, or Practice: With their
limited resources and high medical needs, the appropriate
choice of a PDP is particularly important for dual eligibles.
Any evidence of inaction or poor choices of plans by duals
may suggest the need for better coverage options, or
additional information or assistance for duals in making plan
choices.
Primary Funding Source: State of New Hampshire
●Cost and Cost-Effectiveness of Adding a New
Monoclonal Antibody to Standard Chemotherapy in
Advanced Non-Small Cell Lung Cancer
Patrick Grusenmeyer, ScD (cand)
Presented By: Patrick Grusenmeyer, ScD (cand), MPA, Vice
President, Cancer Services, Helen F. Graham Cancer Center,
Christiana Care Health Services, 4701 Ogletown Stanton Rd.,
Newark, DE 19713; Tel: (302) 623-4550; Fax: (302) 623-4554;
Email: pgrusenmeyer@christianacare.org
Research Objective: To determine the cost and cost
effectiveness of adding a new targeted monoclonal antibody to
standard chemotherapy for advanced non-small cell lung
cancer. The Medicare Modernization Act changed the manner
in which physicians offices are reimbursed for chemotherapy,
while new treatments increase the cost of care. Lung cancer is
the deadliest form of cancer, causing an estimated 163,510
deaths in the United States in 2005; more than the next four
highest cancers combined. Lung cancer has the second
highest incidence of any cancer, an estimated 172,570 cases.
Study Design: This study is a cost and cost effectiveness
analysis based on clinical findings from a national randomized
clinical trial. Costs of the chemotherapy regimens were
developed from the Medicare national reimbursement rates
(from the payer’s perspective.) Two-drug platinum-containing
regimens have been considered the standard of care in
advanced non-small cell lung cancer (NSCLC), with several
regimens FDA approved and other commonly used regimens
felt to have similar outcomes. The Eastern Cooperative
Oncology Group, a National Cancer Institute funded research
base completed a multi-center, randomized, placebo
controlled clinical trial (ECOG 4599) comparing the
effectiveness of one standard chemotherapy regimen
(carboplatin and paclitaxel) with or without a new targeted
agent, the monoclonal antibody (bevacizumab). The trial
demonstrated significantly prolonged median overall survival
with bevacizumab (12.5 months) compared to chemotherapy
alone (10.2 months.) The addition of bevacizumab adds
considerable cost to the regimen.
Population Studied: The 2005 Medicare reimbursement was
calculated using the Centers for Medicare and Medicaid
Services (CMS) Drug Payment Table, effective January 1, 2005
with drugs reimbursed at Average Sales Price (ASP) + 6%.
Chemotherapy infusion reimbursement was calculated based
on the CY 2005 revisions to the Medicare Physician Fee
Schedule (PFS).
Principal Findings: The carboplatin and paclitaxel regimen
costs $14,073. The addition of bevacizumab increases cost by
$66,271 to $80,343 and provides a statistically significant
increase of 2.3 months in median overall survival than
chemotherapy alone, (hazard ratio = 0.77 (0.65, 0.93), p =
0.007.) The addition of bevacizumab to chemotherapy costs
$345,762 per year of life gained.
Conclusions: The addition of bevacizumab to a
chemotherapy regimen containing carboplatin and paclitaxel
costs an additional $66,271 to gain an additional 2.3month
survival in advanced NSCLC. Bevacizumab costs $345,762 for
1-year additional survival. Medical interventions are generally
considered cost-effective at $50,000 - $100,000 per Year of
Life Gained (YLG). In order to be cost effective at the
$50,000/YLG level bevacizumab reimbursement must be
reimbursed at $7.35/10 mg. ($882/cycle) or 13% of 2005
Medicare reimbursement of $57.08/10 mg. ($6,849/cycle).
Implications for Policy, Delivery, or Practice: Currently,
Medicare reimburses physicians Average Sales Price (ASP)
plus 6% for Part B drugs administered in the office. This
essentially allows the pharmaceutical company to set the
reimbursement rate for Part B drugs, whereas Medicare
establishes the rate it pays for other Part B services,
particularly for physician services through the sustainable
growth rate formula. Medicare should reassess how it pays
for chemotherapy drugs under Part B and should set the rate
it pays based in part on cost effectiveness of the treatment.
Additional analysis should be conducted to determine if
reimbursement changes lead to different utilization.
Primary Funding Source: No Funding
●Predictors of Physically and Mentally Unhealthy Days for
Medicare Managed Care Beneficiaries
Mary Anne Hope, MS, Beth Hartman Ellis, Ph.D., David
Drachman, Ph.D., Laura Giordano, RN, M.B.A.
Presented By: Mary Anne Hope, MS, Senior Analyst, Surveys
Research & Analysis, Health Services Advisory Group, 1600 E.
Northern Ave., Phoenix, AZ 85020; Tel: 602-745-6312;
Fax: 602-241-0757; Email: mhope@azqio.sdps.org
Research Objective: The Medicare Health Outcomes Survey
(HOS) assesses the physical and mental health outcomes of
the Medicare elderly enrolled in managed care in the United
States and is the first health outcomes assessment for the
Medicare population. This research examines a new measure
in the HOS, the number of unhealthy days reported per
month, as it relates to profit and non-profit status of managed
care health plans.
Study Design: The Medicare HOS includes the SF-36, which
is a widely used multi-purpose, short-form health survey. In
addition to the SF-36, questions regarding Activities of Daily
Living (ADLs), chronic conditions, negative symptoms, and
demographic information are included in the survey.
Population Studied: The respondents in this study were
40,211 beneficiaries in Cohort VIII baseline. The final sample
consisted of beneficiaries representing 166 managed care
plans. Clustering among health plans was tested with the
intraclass correlation coefficient and found to be not
significant. Multiple regression was then used to analyze
physically and mentally unhealthy days. Predictors included
demographics, comorbidity, impaired ADLs, a depression
screen, and negative physical health symptoms. Because of
the large sample size available, an effect size criterion was
used to assess statistical significance. The effect size criterion
was set at 0.5% for the contribution of variance for each
predictor.
Principal Findings: The findings indicate that plan profit
status is not related to the number of physically or mentally
unhealthy days. However, proxy status, urinary incontinence,
impaired ADLs, depression, bodily pain, and shortness of
breath all met the effect size criterion for physically and
mentally unhealthy days. Comorbidity, race, education, and
income did not meet the effect size criterion.
Conclusions: Demographic characteristics were not related to
unhealthy days for these beneficiaries, nor was plan profit
status. However, a number of treatable conditions did
contribute to mentally and physically unhealthy days.
Implications for Policy, Delivery, or Practice: Beneficiaries
with depression and bodily pain should be strongly considered
as a focus for quality improvement programs.
Primary Funding Source: CMS
●Effect of Benefit Package Design on Demand for
Medicare Advantage Plans
Chunchih Jim Huang, Ph.D., Mahmud Khan, Ph.D.
Presented By: Chunchih Jim Huang, Ph.D., Senior Outcomes
Research Associate, Outcomes Measurement Programs,
Medstar Research Institute, 6495 New Hampshire Avenue,
Suite 305, Hyattsville, MD 20783; Tel: (301)560-2920;
Fax: (301)560-2974; Email: jim.huang@medstar.net
Research Objective: The research was to examine the effect
of various benefit-specific attributes of Medicare plus Choice
(M+C, now Medicare Advantage) plans on proportion of
Medicare beneficiaries selecting the plans. Specifically, the
assumptions tested in the study were as follows: (1) plans
with lower out-of-pocket payments and more generous and
comprehensive coverage would attract more Medicare
beneficiaries and therefore, would experience higher
penetration rates at the county level; (2) plans with lower
barrier to access to care would encourage Medicare
beneficiaries to enroll in the plans; (3) plans provided by the
managed care organizations (MCOs) with higher years of
Medicare experience are likely to attract more enrollees.
Study Design: The prospective study was designed based on
the fact that the M+C benefit packages are offered about half
year before Medicare beneficiaries choose them.
Simultaneous equations with random effect model have been
used. The study first considered the relationship between the
monthly premium and the benefit components of the M+C
plans, and then analyzed the relationship of the M+C benefit
options and the enrollment rate for each plan at each service
county. The response variable was defined as the percentage
of the M+C plan enrollees among total Medicare beneficiaries
in a county. In addition to considering different categories of
plan benefits and out-of-pocket expenses, factors such as
organizational attributes, healthcare market structure, and
geographic and demographic characteristics were also
included in the model.
Population Studied: This study was based on all of the M+C
plans and their service counties during the years 2001 and
2002. Data was obtained from various resources. Analyses
were carried out at county-plan level. Special programs like
PACE (Program for All-Inclusive Care for the Elderly) and
HCPP (Health Care Prepayment Plans) were not included.
Counties in Alaska and Puerto Rico were not included, either,
due to insufficient information. The sample size in the study
was 7,250.
Principal Findings: The results show that plans with lower
out-of-pocket premium, lower co-pay for outpatient visits, and
zero co-pay for inpatient stay have higher enrollment rates.
Plans with $1 more monthly premium decrease the
penetration rate by 0.03%. Plans with $1 more for office visit
co-pay decrease the penetration rate by 0.05%. We also find
that the coverage of brand-name drugs or the provision of
unlimited generic drugs increases the enrollment probability
of Medicare beneficiaries in the plan. Dental care coverage
provided by MCOs, however, does not affect the plan’s
attractiveness. On the other hand, MCOs with one additional
year of experience in Medicare business increase their
penetration rate by 0.08%. An 1% increase in the MCO
enrollees having access to preventive or ambulatory services
increase their M+C plans’ penetration rate by 0.05%.
Conclusions: (1) The inverse relationship between out-ofpocket cost and the enrollment rate in M+C plans is
consistent with our hypothesis. (2) Beneficiaries appear to
prefer plans with brand name drug or unlimited generic drug
coverage. (3) Coverage of preventive care services plays an
important role in the beneficiaries’ decision making on plan
choice. (4) MCOs’ experience and their performance are
important factors affecting enrollment in their Medicare
Advantage plans.
Implications for Policy, Delivery, or Practice: This research
provides not only the insight into the Medicare beneficiaries’
preferences for benefit package components but also the
guidelines for improving the market share of MCOs among
Medicare beneficiaries.
Primary Funding Source: No Funding
●The Medicare Drug Coverage Gap: Damoclean Swords?
Jie Huang, Ph.D., Richard Brand, Ph.D., Rita Hui, Pharm.D,
Joe Newhouse, Ph.D., John Hsu, M.D, M.B.A., MSCE
Presented By: Jie Huang, Ph.D., Statistical Demographer,
Division of Research, Kaiser Permanente, 2000 Broadway,
Oakland, CA 94612; Tel: (510) 891-3571; Fax: (510)-891-3606;
Email: jyh@dor.kaiser.org
Research Objective: Starting in 2006, many Medicare
beneficiaries will have drug costs that vary with their overall
drug expenditure level. After $2,250, some beneficiaries will
have no prescription drug coverage, until they reach an out-ofpocket spending maximum. For some beneficiaries, drug
expenditures could remain high in subsequent years, thus
affecting the likelihood of entering this coverage gap. To
examine these issues, we investigated prescription drug
expenditures during consecutive years among Medicare
beneficiaries in a prepaid, integrated delivery system.
Study Design: We examined the percentage of subjects who
had total drug expenditures greater than $2,250 in 2002 and
2003 respectively, and the percentage of subjects who did so
in both years. Using logistic regression models, we examined
the association between individual characteristics and
exceeding the expenditure threshold. Characteristics included
age, gender, neighborhood (census block group) median
annual household income and mean education level,
race/ethnicity, comorbidity (DxCG score), chronic disease
status, having a primary care physician (PCP), and medical
center. We used 2002-2003 automated and 2000 US Census
data.
Population Studied: All 41,904 subjects were
Medicare+Choice beneficiaries in Kaiser Permanente-Northern
California, who had prescription drug coverage without any
coverage limits in 2002-2003. The beneficiaries had a mean
age of 74.7 years (SD=6.7); 53.5% were female; and 71.9%
were white.
Principal Findings: In 2002, 10.2% of the study subjects
exceeded the $2,250 expenditure threshold; and 11.5%
exceeded the $2,250 threshold in 2003. Among subjects with
$2,250+ expenditures in 2002, 71.3% also exceeded the
threshold in 2003. In multivariate analyses, beneficiaries who
were younger (OR=1.80, 95%CI: 1.59-2.03 for 65-74 vs. 85+;
OR=1.30, 95% CI: 1.16-1.47 for 75-84 vs. 85+), female (OR=1.53,
95%CI: 1.43-1.64), of white race/ethnicity (OR=1.53, 95%CI:
1.40-1.68), had greater comorbidity (OR=4.70, 95%CI: 4.405.01), or had more chronic diseases (OR=1.22, 95%CI: 1.171.26) were significantly more likely to exceed the $2,250
threshold in 2002. The associations are comparable for
exceeding the threshold in 2003 and exceeding in both years.
Subjects with high drug expenditures ($2,250+) in 2002 were
substantially more likely to have similarly high expenditures in
2003 (OR=32.5, 95%CI: 29.8-35.4).
Conclusions: One in ten Medicare+Choice beneficiaries is at
risk for entering the coverage gap under the new drug benefits
in Medicare Part D. Once beneficiaries have $2,250+ in drug
expenditures, they are at risk for entering the coverage gap in
subsequent years. As expected, subjects with multiple chronic
diseases or a high comorbidity level are at high risk for
entering the coverage gap.
Implications for Policy, Delivery, or Practice: Medicare Part
D drug benefits involve significant amounts of cost-sharing,
particularly for beneficiaries with high levels of expenditures.
Not surprisingly, beneficiaries with greater clinical need and
who have had high drug expenditures in the past are at great
risk for having high expenditures in future years, thus would
have high out-of-pocket costs under Part D. These costs could
affect drug consumption behavior, even below the coverage
gap. Additional research is needed to assess the clinical
impact of the various drug cost-sharing structures under the
new Part D plans.
Primary Funding Source: AHRQ
●Does Medicare Related Pharmacy Coverage Affect VA
Pharmacy Use?
Michael Johnson, Ph.D., Raji Sundaravaradan, BS, Laura
Petersen, M.D., M.P.H., Nora Osemene, Pharm D, Iris Wei,
DrPH, Robert Morgan, Ph.D.
Presented By: Michael Johnson, Ph.D., Assistant Professor,
Houston HSR&D, Baylor College of Medicine, 2002
Holcombe Blvd., Houston, TX 77030; Tel: (713) 794-8608; Fax:
(713) 748-7359; Email: mjohnson@bcm.tmc.edu
Research Objective: Veterans with Medicare managed care
plans have access to pharmacy benefits outside the VA, but
this coverage affects VA pharmacy use is unclear. We
examined patterns of pharmacotherapy among Medicareenrolled veterans with diabetes (DM), ischemic heart disease
(IHD) and chronic heart failure (CHF), and how those
patterns differ among patients enrolled in fee for service (FFS)
or managed care (HMO) plans.
Study Design: A retrospective cohort of 702,542 veteran
enrollees was identified from ICD-9 diagnosis codes in
calendar year 2000 (CY00) and 881,290 in CY02 with DM,
IHD, or CHF from the VA National Patient Care Databases.
Population Studied: Veteran enrollees were classified as
having only one of the three conditions or all 3. Use of 25
categories of selected cardiovascular and anti-diabetic agents
in the VA was tabulated from pharmacy prescription records
obtained from the Pharmacy Benefits Management Strategic
Healthcare Group (PBM) and stratified by Medicare FFS or
HMO enrollment status. The proportion of users of conditionrelated medications within disease groups was compared. We
hypothesized that patients enrolled in HMO plans would
utilize the VA less often than FFS enrollees, and that
differences would be due to the presence of a pharmacy
benefit within the HMO plan.
Principal Findings: Differences between FFS and HMO
enrollees were generally minimal (+/- 2%). The most notable
exceptions were statin use, which was on average 4.8% less
frequent among FFS enrollees in CY00 and 5.7% less frequent
in CY02 compared to HMO enrollees across all disease
condition groups. For example, in CY02, of the 293,213 FFS
enrollees with DM, 45.8% received statins from the VA
compared to 50.8% of HMO enrollees with DM (n=36,707).
Among the HMO enrollees, 51.4% of enrollees in plans with
pharmacy coverage received statins compared to 49.6%
without pharmacy coverage. Other notable differences were
ACE inhibitor use among patients with CHF or DM (about 4%
less frequent among FFS enrollees), and increased use (about
4%) of glucose monitoring supplies among FFS enrollees with
DM. Differences between HMO enrollees with drug coverage
available compared to those without were uniformly very low
(+/- 2%).
Conclusions: Differences in VA pharmacy use by patients
enrolled in Medicare FFS or HMO plans were minimal in
these patients with isolated or multiple chronic conditions.
Contrary to our expectation, consistent increased use of
statins and ACE inhibitors was found among HMO enrolled
veterans. However, differences did not appear to be driven by
the presence of drug coverage within HMO plan, suggesting
that case-mix differences among enrollees such as income
levels, or quality of care differences in FFS or managed care
plans may be influencing the choice to use VA pharmacy
services.
Implications for Policy, Delivery, or Practice: Veterans use
of VA pharmacy services is largely unaffected by veterans’
access to Medicare-related pharmacy benefits. Future work
will examine the policy implications under the new Medicare
Modernization Act.
Primary Funding Source: VA
●High Cost, Low Coverage Drugs: Expenditures and
Medicare Formulary Coverage For Biotechnology Drugs
Su-Ying Liang, Ph.D., Kathryn Phillips, Ph.D., Jennifer Haas,
M.D.
Presented By: Su-Ying Liang, Ph.D., Associate Researcher,
Clinical Pharmacy, University of California San Francisco, 3333
California Steet, Suite 420, San Francisco, CA 94143; Tel: 415514-0457; Fax: 415-502-0792;
Email: liangs@pharmacy.ucsf.edu
Research Objective: To examine: (1) recent trends in
expenditures for the top 10 biotechnology drugs and (2)
formulary coverage for these drugs under the Medicare
Prescription Drug Plan.
Study Design: Cross-sectional analysis of US sales of the top
10 biotechnology drugs from 2002 to 2004. Pharmaceutical
sales data were extracted from the Knowledge Express Data
Systems (UTEK Corporation). Formulary coverage was
obtained from the Centers for Medicare and Medicaid
Services. We calculate the percentages of prescription drug
plans that include these biotechnology drugs in their
formularies. We examine whether formulary coverage varies
by drug, state (California vs Massachusetts), and plan type
(stand-alone prescription drug plans vs Medicare Advantage
drug plans).
Population Studied: Medicare prescription drug plans in
California (n=471) and Massachusetts (n=293).
Principal Findings: Sales of the top 10 drugs have increased
47% from 2002 to 2004, with the biggest increase in sales of
Aranesp (495%). A minority of these Medicare prescription
drug plans included these drugs in their formularies, ranging
from 12% for Rituxan to 35% for Remicade and Enbrel.
Coverage for these drugs varies between California and
Massachusetts. Stand-alone prescription drug plans are more
likely to cover these biotechnology drugs than Medicare
Advantage plans (77% vs 19%).
Conclusions: Despite increasing sales of the top
biotechnology drugs, a minority of Medicare plans in two
states cover these products. Coverage varies by drug, state,
and plan type. Stand-alone prescription drug plans may have
better coverage for biotechnology drugs compared to
Medicare Advantage drug plans.
Implications for Policy, Delivery, or Practice: Careful
evaluation of the value and formulary coverage of
biotechnology drugs is needed.
Primary Funding Source: NCI
●Effect of Sample Size on Models’ Performances in
Predicting Medical Expenditures
Hangsheng Liu, MS, Peter Veazie, Ph.D., Andrew Dick, Ph.D.,
Katia Noyes, Ph.D., M.P.H.
Presented By: Hangsheng Liu, MS, Ph.D. Student,
Community & Preventive Medicine, University of Rochester,
601 Elmwood Ave, Box 644, Rochester, NY 14642; Tel: 585275-7380; Email: Hangsheng_Liu@urmc.rochester.edu
Research Objective: To investigate the association between
sample size and various regression models’ performances in
predicting the medical expenditures.
Study Design: 1992-2000 Medicare Current Beneficiary
Survey (MCBS) data is used in this study. Considering the
MCBS data as the population, we draw 500 random samples
from that population, run various models on the annual total
medical expenditures, and compare the models’ performances
as the sample size changes from 200 to 20,000. Each sample
is randomly split into two parts for the purpose of crossvalidation. The models include simple ordinary linear squares
(OLS), log transformed OLS with homoscedastic
retransformation (LogOLS-hom) or heteroscedastic
retransformation (LogOLS-het), square-root transformed OLS
with heteroscedastic retransformation (SqrOLS-het),
generalized linear models (GLM) with log link and Poisson
family (Poisson GLM) or Gamma family (Gamma GLM). We
exclude the institutionalized beneficiaries, those with End
Stage Renal Diseases, and those under 65 years old, because
their medical expenditure distributions are quite different from
those of others. In order to simplify the analysis, we also
exclude those beneficiaries without any medical expenditure in
a calendar year and do not use sampling weights. The model
performance measurements include: predicted mean bias
(PMB, the difference between the population mean and the
mean of predicted values), absolute prediction error (APE)
and root mean square error (RMSE) for both in-sample and
out-of-sample predictions.
Population Studied: Non-institutionalized Elderly over 65
years old in the US
Principal Findings: (1) In-sample prediction. As the sample
size increases, PMB is decreasing for all models, where
SqrOLS-het, OLS and Poisson GLM perform best and have a
faster decreasing rate, followed by Gamma GLM, LogOLS-het
and LogOLS-hom. APE does not show a strong pattern of
decrease as the sample size increases, and Poisson GLM has
the smallest APE, followed by SqrOLS-het, Gamma GLM,
LogOLS-het, OLS, LogOLS-hom. The same pattern is
observed for RMSE. (2) Out-of-sample prediction. PMB shows
the same pattern as that of in-sample prediction, where
SqrOLS-het, OLS, and Poisson GLM perform much better
than other models and have a faster declining rate as the
sample size increases. When sample size is small, simple OLS
generates the smallest PMB, which is about half of SqrOLShet and one ninth of Poisson GLM. In contrast to the insample predictions, APE and RMSE do demonstrate the
declining trend as the sample size increases. In terms of these
two measures, SqrOLS-het, OLS, and Poisson GLM perform
better than other models.
Conclusions: The LogOLS models do not out-perform other
models in predicting the medical expenditures for the noninstitutionalized elderly, while simple OLS shows its
advantages. The best models include SqrOLS-het, Poisson
GLM and simple OLS. This pattern persists even in small
sample sizes.
Implications for Policy, Delivery, or Practice: Since simple
OLS can out-perform standard alternatives, such as logtransformed models, it is necessary to compare them before
one can find a suitable model for a specific dataset.
Primary Funding Source: NIA
●Familiarity with Medicare and Self-Reported Access to
Care
Robert Morgan, Ph.D., Cayla Teal, Ph.D., Jennifer Hasche, MS,
Laura Petersen, M.D., M.P.H., Margaret Byrne, Ph.D., Debora
Paterniti, Ph.D., Beth Virnig, Ph.D., M.P.H.
Presented By: Robert Morgan, Ph.D., Associate Professor and
Research Scientist, Medicine (Health Services Research),
Baylor College of Medicine and Houston VA Medical Center,
2002 Holcombe Blvd (152), Houston, TX 77030; Tel: (713) 7948635; Fax: (713) 748-7359; Email: rmorgan@bcm.tmc.edu
Research Objective: There are substantial concerns regarding
Medicare beneficiaries’ abilities to navigate an increasingly
complex array of program choices under Medicare, and
ultimately, whether the expansion of the Medicare managed
care program and the implementation of the Medicare
Prescription Drug Benefit, or Part D, will actually improve
beneficiaries’ ability to access care. While Medicare
beneficiary knowledge has increasingly been studied, there
have been few studies of the relationship between beneficiary
knowledge and access to health care. In this paper, we
examine the relationship between a global self-reported
measure of Medicare program familiarity, reported health care
use, and perceived access to care.
Study Design: Mailed survey. Our overall response rate was
53%, or 2,997 of 5,697 mailed surveys.
Population Studied: White, black, and Hispanic Medicare
beneficiaries living in nine metropolitan and non-metropolitan
areas distributed across the U.S. We stratified our random
sample by race-ethnicity, sex, Medicare+Choice or M+C plan
enrollment, and geographic area.
Principal Findings: All analyses were weighted to reflect our
survey sampling proportions. In our bivariate analyses,
respondents who reported being unfamiliar or very unfamiliar
with Medicare were less likely to report having routine
physician visits, p < .05, but reported more ER visits, p < .02.
They were also more likely to report cost-related delays in
physician visits, p < .02, ER visits, p < .0005, inpatient
admissions, p < .02, and prescription fills, p < .02. They
reported poorer perceived access to medical care in general, p
< .0004, to life-saving/urgent care, p < .0002, and to nonurgent/routine care, p < .0001, and perceived having less
access to affordable medical care, p < .0008. In multivariate
analyses controlling for race-ethnicity, sex, income, M+C
enrollment, possession of supplemental insurance, and
geographic area, lower familiarity remained associated with
increased numbers of ER visits, increased risk of delays in
physician visits, ER care, inpatient admissions, and
prescription fills, and to perceptions of poorer access to lifesaving/urgent care, to non-urgent/routine care, and to
affordable medical care.
Conclusions: Beneficiaries who report being unfamiliar with
the Medicare system are more likely to delay care due to cost,
and are more likely to use services, e.g., ER visits, which have
been previously associated with poor health care access.
Further, these beneficiaries consistently perceive themselves
as having poorer access to care.
Implications for Policy, Delivery, or Practice: Researchers
and policy makers are increasingly aware of the integral role
that beneficiary knowledge plays in health system enrollment
decisions. Medicare Part D is expected to significantly
increase the complexity of health care decisions under
Medicare. Much of the commentary to date has focused on
the difficulties that beneficiaries may have in choosing among
the available prescription drug plans. Our findings suggest
that regardless of their choice, beneficiaries’ familiarity with
the Medicare program will significantly mediate their ability to
access care.
Primary Funding Source: NIA
●Did the MMA Payment Rate Increases to Medicare
Managed Care Plans Increase Enrollment in 2004?
Lauren Nicholas, M.P.P.
Presented By: Lauren Nicholas, M.P.P., Doctoral Student,
School of Social Work, Columbia University, 509 W. 112th St.
#3W, New York, NY 10025; Tel: 202-246-8020;
Email: ln2123@columbia.edu
Research Objective: To determine whether increasing
payment rates to Medicare Advantage plans in 2004 caused
an increase in Medicare managed care enrollment.
Study Design: Multivariate regression models with state and
county fixed effects were used to test for a causal effect of
increases in Medicare Advantage payment rates on county
enrollment rates. This methodology exploits a natural
experiment that was created by an unexpected increase in
annual payment rates to plans that occurred in early 2004 and
was instituted retroactively for the year.
Population Studied: County-level Medicare Advantage data
for 901 counties with at least 2% of the population enrolled in
Medicare managed care at the end of 2003.
Principal Findings: Enrollment in Medicare managed care
increased following the Medicare Modernization Act increased
payment rates to all plans nationwide. However, there is no
statistical evidence that these rate increases caused the
increases in enrollment. These findings are robust across
model specifications which consider absolute dollar value of
payment rate increases and percentage increase in payment
rate. Enrollment changes were considered for the 3 month
and 6 month periods following the payment rate increases.
Conclusions: These findings suggest that increasing payment
rates to Medicare Advantage plans may not be an effective
way to increase enrollment in the program at the county level.
Implications for Policy, Delivery, or Practice: Managed care
companies were required to use the increased payments to
improve benefits or reduce cost sharing for Medicare
managed care enrollees. Economic theory would suggest that
enrollment should increase in response to the improved
offering, although we do not observe this in practice. This
suggests that other incentives may be more appropriate and
more cost effective if we want to increase managed care
enrollment.
Primary Funding Source: CWF
●Estimating Out-of-Pocket Pharmaceutical Expenditrures
Under the New Medicare Drug Law for Patients with
Mental Disorders – An Analysis of Claims Data from
Retiree Medical Plans
Ronald J. Ozminkowski, Ph.D., Teresa B. Gibson, Ph.D., Tami
L. Mark, Ph.D., M.B.A., Laurie A. Costa, M.P.H.
Presented By: Ronald J. Ozminkowski, Ph.D., Director, Health
& Productivity Research, HPR, Thomson Medstat, 777 East
Eisenhower Parkway, 903R, Ann Arbor, MI 48108; Tel: (734)
913-3255; Fax: (734) 913-3850;
Email: ron.ozminkowski@thomson.com
Research Objective: Estimate out-of-pocket pharmacy
expenditures for elderly retirees with employer-sponsored
coverage, under the standard Medicare drug plan that began
on January 1, 2006.
Study Design: Data came from the Medstat MarketScan
Medicare Database, for 2004. Payments covered by the
Medicare program and by private insurance were included.
Analyses focused on 30,681 patients with diagnoses of, and
treatment for, depression, anxiety disorder, or schizophrenia
in 2004. We estimated the out-of-pocket payments that would
have been incurred by these beneficiaries, if the Medicare drug
law had been in effect during 2004. We also estimated how
long it would have taken to enter the “donut hole” where
coverage stops (i.e., that period during which total pharmacy
expenditures range from $2,251 to $5,100).
Population Studied: Data included all medical and pharmacy
claims for 1,220,902 seniors enrolled in retiree plans offered
by large employers. (About 30% of non-institutionalized
Medicare enrollees have retiree coverage.)
Principal Findings: As expected for people with these
conditions, more than half were female (i.e., 56% of those
with schizophrenia were female, as were 64% of the
depression patients, and 68% of the anxiety patients). 83% to
88% lived in urban areas. Several thousand sample members
came from each U.S. census region. Average ages ranged
from 66 years (for schizophrenia patients) to 73 years (for
anxiety and depression patients). Mean total pharmacy
payments for these mental health patients were higher than
payments for other patients with retiree coverage ($4,491 for
depression patients, $3,364 for anxiety patients, and $5,321 for
schizophrenia patients, versus $2,587 for the average
Medicare beneficiary). The average mental health patient
filled over 50 prescriptions for all of their physical and mental
disorders. About 61% of the anxiety patients, 69% of
depression patients, and 73% of the schizophrenia patients
would have fallen into the donut hole if the law had been in
effect in 2004, assuming no changes in utilization behavior
would be induced by the law’s deductible and copayment
features. Schizophrenia patients would have entered after
about 4 months (in April). Depression patients would fall into
the donut hole after about 6 months, while anxiety patients
would enter after about 9 months, on average. Mean out-ofpocket pharmacy payments under the new law would have
ranged from $1,858 for anxiety patients to $2,407 for
schizophrenia patients.
Conclusions: The results to date suggest that most patients
with these psychiatric disorders will face high out of pocket
costs, and many will be faced with a donut hole of no
coverage. Adjusting for any changes in demand due to
different copayment features under the new law may modify
the results somewhat.
Implications for Policy, Delivery, or Practice: As
beneficiaries move from one form of insurance into the new
Medicare plans, differences in out-of-pocket requirements may
have implications for adherence to pharmacotherapy and
health status, especially as people enter the donut hole. These
should be considered by doctors and policy makers, as
patients are treated and research agendas are set.
Primary Funding Source: NIMH
●Trends in Characteristics of Medicare Enrollees in Risk
HMOs
Gerald Riley, M.S.P.H.
Presented By: Gerald Riley, M.S.P.H., Social Science Research
Analyst, Office of Research, Development, and Information,
Centers for Medicare and Medicaid Services, 7500 Security
Blvd., Room c3-20-17, Baltimore, MD 21244; Tel: (410) 7866699; Fax: (410) 786-5534; Email: gerald.riley@cms.hhs.gov
Research Objective: To examine trends in demographic,
health, and functional status measures in the Medicare risk
HMO and fee-for-service (FFS) sectors between 1991 and
2004.
Study Design: The study used data from the Medicare
Current Beneficiary Survey (MCBS) Access to Care Files. The
MCBS is a multipurpose survey of a nationally representative
sample of the Medicare population, including institutionalized
individuals. It has been conducted every year since 1991.
Respondents are asked about health status, difficulties with six
Activities of Daily Living (ADLs) and six Instrumental Activities
of Daily Living (IADLs), and whether a doctor has ever told
them they have twenty specific conditions. Information on
demographics, income, and supplemental health insurance is
also collected. Medicare administrative records are routinely
linked to survey information. For each study year,
administrative records were used to identify which
respondents were enrolled in risk-based HMOs and in FFS at
the time of the Fall round interview. Descriptive statistics on
individual demographic, income, health, and functional status
measures were computed separately for the HMO and FFS
samples for each year and were adjusted to the age and sex
distribution of the total Medicare population in 1997 (the midpoint of the study period). In addition, a summary proxy
health status measure was developed for each respondent,
consisting of predicted Medicare costs as a function of
individual health and functional status measures, age, and
sex.
Population Studied: Medicare beneficiaries in risk-based
HMOs and FFS. Some measures were available for the noninstitutionalized population only.
Principal Findings: Preliminary findings show that enrollees
in risk-based HMOs grew from 3.5% of the Medicare
population in 1991 to 18.3% in 2000, and decreased thereafter
to 13.5% in 2004. During that time, the demographic mix of
the HMO population changed (proportionately more women
aged 85 and over, fewer women under age 65, more residents
in the northeast region). Compared to FFS, fewer HMO
enrollees were institutionalized or eligible for Medicaid each
year, but the differences between the HMO and FFS sectors
lessened over the study period. HMO enrollees generally
reported fewer numbers of chronic conditions, fewer problems
with ADLs and IADLs, and fewer instances of fair or poor
health, but the differences attenuated somewhat over time.
The ratio of average predicted costs among HMO enrollees to
average predicted costs among enrollees in FFS increased, but
remained below 1.0.
Conclusions: Health status differences between the Medicare
HMO and FFS populations have gradually lessened over time,
but HMO enrollees remain somewhat healthier.
Implications for Policy, Delivery, or Practice: Increasing
HMO enrollment of older and sicker beneficiaries suggests
that more vulnerable subpopulations are taking advantage of
enhanced choices available under Medicare. However, some
prior studies have identified concerns with access to and
quality of care for chronically ill populations in HMOs. If the
HMO program, recently reformed as Medicare Advantage,
continues to enroll more chronically ill beneficiaries, its impact
will increase in the areas of care efficiency, access, and quality.
Primary Funding Source: CMS
●Medicare Part D Can Reduce Out-of-Pocket Expenditures
for Some Low-Income Veterans
Randall Rupper, M.D., M.P.H., Byron D. Bair, M.D.
Presented By: Randall Rupper, M.D., M.P.H., Physician
Investigator, GRECC, VA Salt Lake Medical Center, Bldg. 2
(182), 500 Foothill Drive, Salt Lake City, UT 84148; Tel:
(801)582-1565; Fax: (801)584-5640;
Email: randall.rupper@hsc.utah.edu
Research Objective: Because CMS considers the VA drug
benefit to be creditable coverage, many advocacy groups
suggest that veterans need not enroll in Part D. The VA and
Medicare Part D offer individuals living near poverty waived or
reduced co-payments, but the qualifying thresholds and the
benefit structures differ. We sought to determine how these
different thresholds and benefits would affect pharmacy outof-pocket expenses for low-income veterans.
Study Design: Using VA income and asset means testing and
pharmacy data from 2005, we estimated the projected cost
differences in out-of-pocket expenditures during 2006 for
elderly veterans eligible for assistance through each program.
Population Studied: We studied users of the VA Salt Lake
Medical Center who were age 65 or older, and who had
completed means and asset testing during fiscal year 2005.
Principal Findings: The threshold for receiving assistance
through one or both programs on the basis of lowincome/assets is met by 4,127 veterans. Of these, less than
half, 1,810 (49%), would be eligible for complete waiver of copayments through the VA. Of the remaining veterans, 1,367
would be eligible for full premium waivers under Medicare
Part D, with lower scheduled co-payments than they would
have at the VA. The remaining 950 veterans would pay a
sliding scale premium under Medicare Part D, but have lower
scheduled co-payments than they would have at the VA. Of
the 1,367 veterans who would have clearly lower out-of-pocket
expenditures under Medicare Part D, 799 used the VA to fill an
average of 70 prescriptions each in FY2005. Depending on
refill intervals and use of generic medications, this translates
into an average difference of $210 to $525 dollars per year in
out-of-pocket expenses.
Conclusions: Many veterans living near poverty could lower
their drug co-payments by enrolling in Medicare Part D.
Under current policies, optimizing individual coverage
requires individual analysis that can be supported using
available electronic data.
Implications for Policy, Delivery, or Practice: The different
thresholds and pharmacy benefit structures of the VA and
Medicare Part D create a complex decision for many lowincome veterans seeking to reduce out-of-pocket expenditures.
Groups or individuals who provide advice regarding the
Medicare Part D benefit should not assume that veterans will
fare best using their VA pharmacy benefit alone. Low income
veterans may benefit from decision support that is adapted to
their individual utilization and priorities. Alternatively, policy
makers should consider reducing this complexity by making
the assistance thresholds interoperable. The future effects on
VA enrollment and pharmacy costs, patient medication
adherence, and the overall cost to the Federal government are
important topics for additional research.
Primary Funding Source: VA
●Impact of Medicare Part D on Low-Income Populations:
A Case Study
Randy Scheid, M.P.A., Thomas Cleare, M.B.A., Jennifer
Houlihan, Michael Greene
Presented By: Randy Scheid, M.P.A., Planner, Research and
Planning, Health Care District of Palm Beach County, 324
Datura Street Suite 401, west palm beach, FL 33401; Tel: 561659-1270; Fax: 561-659-4620; Email: rscheid@hcdpbc.org
Research Objective: Establish a monthly and annual cost for
an individual under Medicare Part D's low-income subsidy
program.
Study Design: Case study involving historical utilization
patterns of low-income Medicare enrollees.
Population Studied: Low-income Medicare enrollees in the
provider's prescription drug program.
Principal Findings: Using historical utilization rates derived
from the sample, the study establishes the monthly and
annual projected financial costs a low-income individual might
incur under Medicare Part D's low-income benefit. In
addition, the study identifies a percentage of the low-income
population that will incur significant costs in the doughnut
hole.
Conclusions: The monthly and annual cost to benefiaries of
full prescription benefits under Medicare Part D is established.
The savings compared to out-of-pocket costs are substantial
under Part D, but the cost incurred may still represent a
significant cost for a low-income individual to bear.
Implications for Policy, Delivery, or Practice: This study has
implications for presecription drug providers under Medicare
Part D, state drug programs which also provide prescription
drugs to a low-income population, and low-income
individuals.
Primary Funding Source: No Funding Source
●Modeling the Impact in Drug Cost and Utilization of the
Implementation of Mail Order Pharmacy in a Dual-Eligible
Population
Enrique Seoane-Vazquez, Ph.D., Satish Valluri, MS, M.P.H.,
Rosa Rodriguez-Monguio, Ph.D., Sheryl L. Szeinbach, Ph.D.,
R.Ph.
Presented By: Enrique Seoane-Vazquez, Ph.D., Assistant
Professor, College of Pharmacy and School of Public Health,
Ohio State University, 500W 12th Avenue, Columbus, OH
43210; Tel: (614) 292-3907; Fax: (614) 292-1335;
Email: pharmacoeconomics@osu.edu
Research Objective: Although cost containment is the main
reason behind the recent development of mail order
pharmacy, there is no empirical evidence that substitution of
community pharmacy with mail order services reduces overall
drug expenditures. The study of the impact of mail order
pharmacy is especially important today as the new Medicare
prescription drug benefit could increase the use of this
dispensing channel. The objective of this study is to compare
drug utilization and drug product cost for a dual-eligible
patient population (Medicare/Medicaid patients) using
community pharmacy services with the results of a model
simulating the effect of mail order pharmacy services for the
same population.
Study Design: This study is a retrospective cohort study
comparing utilization and cost patterns in community vs. mail
order pharmacy. A simulation model was employed to assess
drug utilization and cost in mail order pharmacy using
community pharmacy claim data. Drug claims were
aggregated to obtain a set of that courses of drug therapy
(CDTs) representing unique patient IDs and unique drug
products. The model assumed that CDT in mail order
pharmacy would have utilization patterns similar to those
found in community pharmacy. Drug product cost estimates
excluded dispensing fees. A 95% confidence interval
surrounding changes in average utilization and average cost
were estimated using bootstrap analysis. A sensitivity analysis
was performed by varying fill number where mail order was
initiated and compliance.
Population Studied: Dual-eligible patients included in Ohio
Health Plans (program managing Ohio Medicaid) pharmacy
claim data for the period January 2000-September 2004.
Principal Findings: The use of mail order by dual-eligible
patients was estimated to result in an average day supply
increase of 35.4 days, representing a 4.7% increase in
utilization and a 4.7% increase in drug product cost. The use
of mail order by dual-eligible patients consuming drugs for
chronic use was estimated to result in an average day supply
increase of 34.8 days, representing a 4.3% increase in
utilization and a 4.4% increase in product cost.
Conclusions: The results of the simulation model indicate
that mail order pharmacy increases drug utilization and can
also increase drug product cost if the cost per unit is not
reduced accordingly.
Implications for Policy, Delivery, or Practice: Decision
makers should carefully evaluate the utilization and cost
effects that result from the implementation of mail order
pharmacy programs for dual-eligible population. In addition,
any program that increases day supply should carefully target
specific populations and therapies whose potential savings
and/or health outcomes overcome the potential extra costs
that result from increased utilization and wastage.
Primary Funding Source: Other Government
●The Rate of Discharge to a Skilled Nursing Facility (SNF)
Differs Among Medicare Beneficiaries who Undergo
Elective Open Versus Endovascular Repair of Abdominal
Aortic Aneurysms (AAAs)
Kara Suter, MS, Marla R. Kugel, M.P.H.
Presented By: Kara Suter, MS, Partner, The Moran Company,
1655 N. Fort Myer Drive, Suite 1250, Arlington, VA 22209; Tel:
(703) 465-9970; Fax: (703) 465-9969;
Email: klsuter@themorancompany.com
Research Objective: The aim of this study is to determine
whether the rate of discharge to a SNF differs among
Medicare beneficiaries who undergo open versus
endovascular repair of AAAs.
Study Design: This study uses data from the LDS versions of
the 2001-2004 inpatient, SNF, and denominator 5% Medicare
Standard Analytic files (SAFs). Selected beneficiaries who
received either open or endovascular repair were compared.
The odds of SNF discharge following open versus
endovascular repair of AAA were calculated using multivariate
logistic regression. The model controlled for the following
independent factors: age, race, gender, co-morbidity, hospital
volume, and previous SNF admissions.
Population Studied: The population consisted of Medicare
beneficiaries who underwent and survived elective AAA repair
without rupture in 2002-2004. Open versus endovascular
repair was determined by the presence of a principal ICD-9
diagnosis of 441.4 and an ICD-9 procedure code of 38.44 or
39.71. Elective surgery was determined by a physician referred
admission code on the inpatient surgery claim. Beneficiaries
were at least 65 years old and had continuous Part A coverage
for at least four quarters prior to surgery. Co-morbidity was
determined using the Elixhauser method. High volume was
defined as a hospital that performed 10 or more AAA repairs
on Medicare beneficiaries per year.
Principal Findings: Beneficiaries who received either open
(n=1,466) or endovascular (n=1,392) repairs were similar in
terms of demographics. The endovascular repair group had a
significantly higher proportion of the following comorbidities:
congestive heart failure (3% open; 4 % endo), hypertension
(19%; 23%), neurological disorders (0.6%; 1%), diabetes (3%;
6%), and fluid and electrolyte disorders (4%; 6%). A larger
proportion of endovascular repair was performed in high
volume hospitals (71% open; 88% endo). Significantly more
beneficiaries who received open repair were discharged to a
SNF compared to those who received endovascular repair
(open: 10%, n=143; endo: 3%, n=47; p<0.001). When
controlling for other factors, a beneficiary who underwent
open repair was 3.52 times more likely to be discharged to a
SNF than a beneficiary who underwent endovascular repair
(OR=3.52.; 95% CI 2.413-5.135; p<0.0001). Other factors that
predicted discharge to a SNF include: prior SNF admission
(OR=20.20; p<0.0001), age (OR=1.032; p=0.03), history of
solid tumor (OR=6.12; p<0.01), obesity (OR=4.57; p=0.01),
and depression (OR=3.31; p=0.02).
Conclusions: An open repair of AAA significantly increases
the likelihood of a discharge to a SNF compared to an
endovascular repair. This study used administrative data and
was unable to control for the size of the AAA.
Implications for Policy, Delivery, or Practice: Repair of AAA
is important to Medicare because of the prevalence, mortality,
and cost associated with the condition. There is some debate
over whether the advantages of endovascular over open repair
of AAA justify the difference in hospital related costs for the
procedure. The cost and decreased quality of life that may be
associated with a SNF stay should be considered in evaluating
the benefits of endovascular repair of AAA and ensuring
access to this treatment for Medicare beneficiaries.
Primary Funding Source: WL Gore & Associates
●Evaluating the Generosity of Medicare Prescription Drug
Plans among Beneficiaries with Hypercholesterolemia
Janice Tzeng, BSPH, Shelby Reed, Ph.D, Lesley Curtis, Ph.D,
Joelle Friedman, M.P.A.
Presented By: Janice Tzeng, BSPH, Data Technician, Center
for Clinical and Genetic Economics, Duke Clinical Research
Institute, P.O. Box 17969, Durham, NC 27715; Tel: (919) 6685957; Fax: (919) 668-7124; Email: janice.tzeng@duke.edu
Research Objective: This study explores the generosity of the
Medicare prescription drug plans offered in North Carolina,
and examines their impact on the estimated out-of-pocket
(OOP) spending among enrollees who require the use of a
statin, a widely-recommended class of cholesterol-lowering
drugs.
Study Design: We evaluated ‘generosity’ by examining the
formulary inclusion of statins for each fee-for-service
prescription drug plan, measuring the mean monthly OOP
costs across all nine statins for each plan, and measuring the
number of individual statins available within a plan at various
levels of monthly OOP costs. The final measure allowed us to
examine the extent to which enrollees within a plan could
switch from one statin to another while maintaining a given
level of monthly OOP costs.
Population Studied: We limited the hypothetical population
to Medicare fee-for-service enrollees in the state of North
Carolina, who require the chronic use of a statin and no other
prescription drug.
Principal Findings: All 38 prescription drug plans in North
Carolina, representing 13 organizations, offered at least one of
the following statins: lovastatin, rosuvastatin, fluvastatin,
atorvastatin, pravastatin, and simvastatin. The three most
covered drugs were brand atorvastatin (94.7% of plans),
generic lovastatin (92.1%), and brand simvastatin (86.8%).
Every plan included at least two of the nine statins on their
formularies. Ten plans (26.3%) included all nine statins on
their formularies, seven plans (18.4%) included five to eight
statins, and 16 plans (42.1%) included four or fewer statins.
The mean monthly OOP cost per plan (across all nine statins)
ranged from $51.46 to $120.35, and correlated negatively (0.53) with the number of statins included on each plan’s
formulary. In addition, the five plans with the lowest monthly
OOP costs each included at least seven statins on their
formularies. The five plans with the highest monthly OOP
costs included six or fewer statins on their formularies.
Seven plans offered only one statin for less than $40 in
monthly OOP costs; none of the plans offered more than one
statin at this cost level. Twenty-nine (76.3%) plans offered
one to three statins for less than $80 in monthly OOP costs,
six (15.8%) plans offered four to six statins, and three (7.9%)
offered seven to nine statins.
Conclusions: Although hypercholesterolemia is a highly
prevalent condition among seniors and aging baby boomers,
the average OOP costs for individual statins can vary
considerably across plans and within plans. Many patients
who select plans on the basis of their OOP costs for an
individual statin may experience a significant increase in OOP
expenditures if they decide to switch to an alternative statin.
Implications for Policy, Delivery, or Practice: This study
demonstrates a significant need for improvement in policies
affecting the design and generosity of Medicare prescription
drug plans. It presents policy-makers with the likely impact of
plan generosity on the OOP expenditures for Medicare
beneficiaries, particularly for those who are locked in to their
plan after enrollment and require midyear changes in their
prescription drug regimens.
Primary Funding Source: No Funding
●Medicare Advantage: Costs, Coverage and Economic
Theory
Greg Watson, M.S.
Presented By: Greg Watson, M.S., Principle, The Moran
Company, 1655 N Fort Myer Dr, #1250, Arlington, VA 22209;
Tel: (703)841-8404; Email: gjwatson@themorancompany.com
Research Objective: This analysis first projects how MMA
payment polices for MA plans may effect private plan
decisions regarding plan participation and marketing
strategies. The analysis then projects how decisions by MA
plans may effect: (1) Medicare costs; and (2) decisions by
Medicare beneficiaries to enroll in MA plans.
Study Design: MMA policies provide that MA plans will be
paid different amounts: (1) in geographic areas across the
nation at the county level; and (2) in each of the next five
years. MA payment rules give plans the potential to maximize
revenues based on the differential between local plan and
regional PPO payment rates. This study is based on a county
level MA plan enrollment model incorporating CMS data on
MA payment rates, risk characteristics, and fee-for-service
(FFS) costs. The study includes simulations that assume
plans can offer both local and regional plans with generally
only modest differences in health care costs (consistent with
“CBO’s Analysis of Regional Preferred Provider Organizations
under the Medicare Modernization Act”, October, 2004). The
analysis assumes that enrollment is disproportionately more
likely in those counties where the model projects that MA
plans payment rates are more than risk adjusted FFS costs.
Applying rational decision rules, the study analyzes the impact
including costs to Medicare of alternative budget neutrality
assumptions, enrollment scenarios, and selection incentives
into local versus regional PPO plans. The study also explores
the Medicare costs of alternative enrollment paths, with the
projections of the Medicare Office of the Actuary providing the
upper bound and of CBO the lower bound.
Population Studied: The study is based on a MA plan
enrollment model that incorporates CMS data on MA
payment rates, risk characteristics, and fee-for-service (FFS)
costs.
Principal Findings: Study findings are consistent with
economic theory that suggests that MA private plans will (a)
not enter markets where costs exceed revenues, and (b)
maximize net revenues when confronted with a choice
between local MA and regional rates by steering enrollment to
the most profitable area and plan type which will generally be
the one with the higher reimbursement.
Conclusions: The study projects that Medicare costs will
increase significantly if MA plans opt to maximize revenue by
steering enrollment into geographic areas and plans with
higher payments. MA plan coverage may also be less
available, or less actively marketed, to beneficaries in some
areas of the nation than has been projected.
Implications for Policy, Delivery, or Practice: The study
suggests that the great variation in Medicare payments to MA
plans across the nation may lead private plans to target
geographic areas where they participate and seek to enroll
beneficiaries. This behavior, consistent with economic theory,
may result in a MA program with higher overall costs to
Medicare and with enrollment focused in specific geographic
areas.
Primary Funding Source: Private funding
●Assessing the Feasibility HEDIS® quality of care
reporting by Medicare PPOs
Amanda Zides, M.H.S., Lok Wong, M.H.S., Joachim Roski,
Ph.D., Karen Onstad, M.P.H./M.P.P., Russell Mardon, Ph.D.
Presented By: Amanda Zides, M.H.S., Senior Health Care
Analyst, Quality Measurement, NCQA, 2000 L Street, NW,
Suite 500, Washington, DC 20036; Tel: 2029551716;
Fax: 2029553599; Email: zides@ncqa.org
Research Objective: This study assesses the feasibility of
HEDIS® quality of care reporting by Preferred Provider
Organizations (PPO). Results of this study will assist the
Centers for Medicaid and Medicare Services (CMS) in
determining new quality improvement program requirements
for PPO health plans in the Medicare Advantage program
starting in 2006.
Study Design: A comprehensive assessment of PPOs’ ability
to report HEDIS quality of care measures was conducted. We
identified a cross-section of commercial and Medicare PPO
health plans to provide feedback in semi-structured interviews
and submit health plan data for analysis on select HEDIS
measures using administrative claims data only and two
HEDIS patient experience surveys.
Population Studied: A total of 30 plans - 19 Medicare and 11
commercial submitted HEDIS data in 2005; 13 participated in
qualitative interviews. PPO plans’ enrollment varied from
30,000 to 4 million in commercial, and from 1000 to 400,000
in Medicare.
Principal Findings: Most PPOs interviewed indicated no
technical barriers to reporting HEDIS measures using existing
administrative data. Some PPOs indicated issues with HEDIS
reporting due to small eligible population, coding, and
different database systems for PPOs. The number of
measures reported varied by plan; the highest number
reported was 18 out of 22 Medicare-relevant measures and 17
out of 20 commercial-relevant measures. A third of all plans
submitted at least one patient experience survey. Most
Medicare and commercial plans were able to report a majority
of selected measures with complete data, especially the 7
clinical care measures addressing diabetic care, mental health
and breast cancer screening). Less plans reported
cardiovascular care measures. Plans indicated less interested
in reporting utilization or access measures. The range of
performance among PPOs in the study was wide and
appeared generally to be lower in commercial PPOs compared
to average national HMO performance, but was more similar
for Medicare PPOs and HMOs. However rates reported are
not reliable as PPO data was not audited. Statistical
differences between HMOs and PPOs, and among PPOs
could not be determined due to the small number of plans.
Therefore limited conclusions can be drawn on the relative
performance of PPOs in the study compared to HMOs.
Conclusions: Quantitative and qualitative findings
demonstrated the feasibility of PPOs’ to report multiple
HEDIS measures using a variety of administrative data,
therefore we conclude PPOs can feasibly report all 41
administrative HEDIS measures. Although PPOs did not
anticipate technical barriers to reporting quality measures
using clinical data from medical records, further investigation
is needed to assess feasibility of reporting measures not
included in this study that rely on abstracting enrollees’
medical records from their primary care provider.
Implications for Policy, Delivery, or Practice: PPOs'
participation in the Medicare Advantage program has
increased interest for previously unavailable information on
quality of care in PPOs to inform Medicare beneficiaries’
choice of HMO and PPO plans. Study results will have a
significant impact on federal policy in defining initial quality
reporting requirements for Medicare Advantage PPO plans.
Primary Funding Source: CMS