Medicare Part D and the
Nursing
i Home Sector
S
Haiden A. Huskamp, Tara Sussman
Oakman, and David Stevenson
June 27,
27 2010
This work was funded by the Medicare Payment Advisory Commission. The views expressed
are those of the authors. No endorsement by MedPAC is intended or should be inferred.
Nursing
g Home (NH)
( ) Residents
vs. Community Dwellers


About 5% of Medicare beneficiaries reside in
long term care facilities
long-term
Compared to community-dwelling
beneficiaries, they disproportionately:




Suffer
S
ff ffrom multiple
lti l chronic
h i conditions
diti
Have higher levels of cognitive impairment
Are dually eligible for Medicaid
Have much higher average Rx drug use
Drug
g distribution system
y
is
very different for NH residents

Most NHs use specialized pharmacies called long-term care
pharmacies (LTCPs)

LTCPs perform a variety of functions:

Repackage and dispense unit doses

Provide 24-hour delivery,
y emergency
g
y supplies,
pp
handling
g of unused
medications

Through consultant pharmacists, offer drug regimen reviews,
coordination of medical necessity documentation
documentation, staff trainings

Maintain geriatric-specific formulary
Part D changes
g to LTCP
market


Before Part D, Medicaid financed drugs for
almost 2/3 of residents (duals)
Under MMA off 2003, duals’ drug coverage
shifted to Part D


E ll d in
Enrolled
i private
i t Rx
R drug
d
plans
l
NHs and their LTCPs must work across
multiple Part D plans
Stakeholder Interviews

Round 1: Nov. 2006-Jan. 2007


http://www.medpac.gov/documents/Jun07_Part_
D_contractor.pdf
Round 2: Nov. 2009-Jan. 2010


24 semi-structured interviews
Stakeholders included: NHs,, LTCPs,, Part D plans,
p
,
financial analysts, physicians, policymakers,
advocates
Key Areas of Focus


Part D plan assignment and selection
Formularies and utilization management
processes

Financial impact on NHs and LTCPs

Impact of Part D on resident outcomes
Part D Plan Assignment
g
and
Selection

Duals randomly assigned to plans with premiums at or below regional
benchmarks

Concern that prevalence of cognitive impairment could undercut
consumer choice model

NHs prohibited from “steering” residents

Several NHs and advocates expressed frustration at limits

Practice varies across NH providers

NHs and LTCPs reported that residents generally remain in assigned plans

Bishop et al. 2009 reported that close to ¼ of all duals switched during 2006-07
and institutionalized duals more likely to switch than community-dwellers
Part D Plan Assignment
g
and
Selection (2)

Many reported problems associated with
reassignment of duals – “biggest
biggest challenge
challenge” now



e.g., 3.3 million duals enrolled in plans that lost benchmark
status between ’09 and ’10
Can lead to disruptions in medication regimens and
additional administrative burden
Additional complications for “choosers” (i.e., those
plan exiting
g the duals
who voluntarilyy chose a p
market)

Communication challenges
Formularies and Utilization
Management (UM)

NHs,, LTCPs,, and MDs work across several drug
g plans
p


Stakeholders indicated that coverage is generally
adequate, although important exceptions


Multiple formulary and UM processes
E.g.,
E
g erythropoietins,
erythropoietins Alzheimer’s
Alzheimer s meds
meds, atypical
antipsychotics, ARBs, pain meds, antidepressants, nebulized
inhalants, IV solutions
UM requirements (e.g., prior authorization or PA)
have increased since ’06

Create distinct challenges in NH setting
Formularies and UM (2)

CMS formulary safeguards play important role


e.g.,
e
g protected classes
classes, must cover emergency supply (one fill
OR a 31-day supply) while exception or appeal request is
being adjudicated
Stakeholders requested:

Greater UM standardization across plans

Plans cover 31-day supply while exception/appeal adjudicated

PDPs allow LTCPs to sign PA forms

PDPs inform LTCPs about PA decisions at same time as
physicians
Non-covered Medications and
Withheld Copayments

LTCPs must often dispense meds before payment is assured

NHs required to provide all meds in care plan regardless of
coverage



NH and/or LTCP must absorb costs of uncovered meds
Continued concerns about state/CMS process for identifying
duals
NHs and LTCPs note difficulties securing copayments withheld
before dual eligibility
g
recognized,
g
although
g some improvements
with
h CMS “best
“b
available
l bl evidence”
d
” (BAE)
(
)
Impact of Part D on Outcomes

No perceived change in overall drug use after Part D


No major adverse impact on outcomes perceived



NHs and LTCPs say residents generally receive meds in
timely way regardless of coverage because regs require this
Briesacher et al. found temporary increase in monthly Rx
use per resident in ‘06
A
Acumen
found
f
d no differences
diff
in
i mortality,
t lit IP admissions,
d i i
or
ER visits between those reassigned for ’07 and those who
stayed in plan
Additional empirical analyses needed
Summary of Findings




Tension between allowing freedom to choose PDP and allowing
NHs to encourage
g enrollment in particular
p
plans
p
Reassignment of duals whose plan loses benchmark status
results in disruption and administrative burden
Formulary coverage adequate, although important exceptions
No perceived change in overall use or adverse effects on
outcomes but empirical
p
analyses
y
needed
Summary of Findings (2)



NH or LTCP must absorb costs of uncovered meds
Continued concerns from NHs and LTCPs about
process for identifying duals
Communication between NHs, MDs, LTCPs, and PDPs
tenuous

LTCPs and NHs often not included in communications about
plan assignment and coverage decisions