U.S. Department of Health and Human Services Office of Inspector General Data Snapshot July 2023, OEI-05-23-00130 Part D Plans Generally Include Drugs Commonly Used By Dual-Eligible Enrollees: 2023 Why OIG Did This Review Key Takeaway For dual-eligible enrollees-that is, people enrolled in both Medicare and Dual-eligible enrollees Medicaid-access to prescription drugs is particularly important. Overall, they have have access to the majority very low incomes and-because they are more likely to be in poorer health than of commonly used drugs other people enrolled in Medicare-tend to use more Medicare services.1 Because in 2023 via Part D plans. Medicare prescription drug coverage is an important tool for ensuring access to This is consistent with prescription drugs, Congress mandated that OIG study whether Part D formularies OIG's findings from cover prescription drugs commonly used by dual-eligible enrollees.2 previous years. Dual-eligible enrollees What OIG Did have several options if their plans do not cover For this report, we determined whether the 445 unique formularies used by the specific drugs; however, 5,619 Part D plans operating in 2023 cover 195 of the 200 drugs most commonly these options may be used by dual-eligible enrollees. See the methodology for more information about burdensome and do how we determined the most commonly used drugs. This is OIG's thirteenth not guarantee access annually mandated report examining dual-eligible enrollees' access to drugs under to the drugs. Medicare Part D. Results A majority of the 445 Part D plan formularies Part D plans with premiums below the covered almost all (at least 97 percent) of the regional benchmark also covered almost all drugs most commonly used by dual-eligible commonly used drugs. enrollees. Similarly, among Part D plans with premiums below Regardless of the plan in which they are enrolled, the regional benchmark, a majority of formularies dual-eligible enrollees can expect to have access to (92 of 130) covered at least 97 percent of the drugs most drugs. commonly used by dual-eligible enrollees. Each year, the Centers for Medicare & Medicaid services (CMS) establishes a premium benchmark for Part D plans that varies by region.3 It is particularly important that plans with premiums below the regional benchmark have high inclusion rates for the most commonly used drugs because: • Dual-eligible enrollees do not need to pay additional amounts in premiums for these plans.4 • When CMS randomly assigns dual-eligible enrollees to Part D plans, it assigns them to plans with premiums below the regional benchmark without considering their specific prescription drug needs.5 1 Results (cont'd) A small number of drugs were covered by While dual-eligible enrollees have several fewer than 75 percent of formularies. options if their formularies do not cover specific drugs, these options require them to take Although formularies frequently omitted eight administrative actions and do not guarantee that commonly used drugs in 2023, they all covered they can get the drugs. alternative drugs in the same respective therapeutic classes, as CMS requires.6 Dual-eligible enrollees have up to three chances during the first 9 months of the year to switch to plans that cover the prescription drugs they require.7 Dual-eligible enrollees can use an exceptions and appeals process to request coverage of nonformulary drugs by their plans.8 Dual-eligible enrollees can work with their prescribers to find an alternative drug covered by their plans. Dual-eligible enrollees can pay out of pocket for the noncovered drugs. Conclusion When establishing formularies, Part D plans are permitted to balance Medicare enrollees' needs for adequate prescription drug coverage against the need to contain costs for plan sponsors and for the Part D program. Part D plans may omit certain drugs from prescription coverage in order to control costs. However, omitting drugs from coverage can also limit the ability of enrollees to access the prescription drugs they need. In general, dual-eligible enrollees have access to nearly all of the most commonly used drugs via their Part D plan formularies in 2023. A majority of these formularies covered almost all commonly used drugs, and only a small number of commonly used drugs were not covered by most formularies. These findings are largely unchanged from OIG's findings reported from 2011 through 2022. Dual-eligible enrollees have several options if their formularies do not cover specific drugs, but these options may be burdensome and do not guarantee access to the drugs. 2 Top 200 Commonly Used Drugs* 3 Top 200 Commonly Used Drugs (cont'd)* 4 Methodology We determined whether the unique formularies used by Part D plans operating in 2023 cover the prescription drugs most commonly used by dual-eligible enrollees. • We used the 2020 Medicare Current Beneficiary Survey (MCBS) Cost and Use data to create a list of drugs with the highest utilization by dual-eligible enrollees. • We used the February 2023 First DataBank National Drug Data File to identify the drug product information for the drugs with the highest utilization by dual-eligible enrollees. • To determine the drugs most commonly used by dual-eligible enrollees, we took the following steps: o We created a list of all drugs reported by dual-eligible enrollees surveyed in the 2020 MCBS, excluding territories. o We collapsed this list to a list of drugs based on their active ingredients. o We ranked the drugs by frequency of utilization, weighting the drug-event information from MCBS by sample weight. o We selected the 200 drugs with the highest utilization by dual-eligible enrollees. • Of the top 200 drugs, we analyzed 195 drugs for this review. We removed four drugs not covered under Part D and one drug for which we were unable to confidently project use to the entire dual-eligible enrollee population. • We collected from CMS the formulary data and the plan data for Part D plans operating in 2023. The • formulary data include Part D plans' formularies for plans operating in 2023. • We then analyzed the unique Part D plan formularies to determine their rates of inclusion of the drugs commonly used by dual-eligible enrollees. We counted a drug as included in a Part D plan's formulary if the formulary included the active ingredient. Standards We conducted this study in accordance with the Quality Standards for Inspection and Evaluation issued by the Council of the Inspectors General on Integrity and Efficiency. Acknowledgments Jonathan Carroll served as the project leader for this study. Office of Evaluation and Inspections headquarters staff who provided support include Robert Gibbons, Sarah Swisher, and Mike Novello. This report was prepared under the direction of Laura Kordish, Regional Inspector General for Evaluation and Inspections in the Chicago regional office; Adam Freeman, Deputy Regional Inspector General; and Hilary Slover, Assistant Regional Inspector General. Sources 1 Kaiser Family Foundation, "What is the role of Medicare for dual-eligible beneficiaries?", A Primer on Medicare: Key Facts About the Medicare Program and the People it Covers. Accessed at https://www.kff.org/report-section/a-primer-on-medicare-what-is-the- role-of- medicare-for-dual-eligible-beneficiaries/ on April 6, 2022. 2 For the mandate, see the Patient Protection and Affordable Care Act, P.L. No. 111-148, § 3313(a). For each study, OIG has reviewed drug coverage under Medicare Part D for all dual-eligible enrollees, rather than only for full-benefit dual-eligible enrollees as specified by the mandate. (Under Social Security Act § 1935(c)(6), full-benefit dual-eligible enrollees are individuals who are eligible for both Medicare and full Medicaid benefits.) With the data available for these studies, we could not confidently identify and separate full-benefit dual-eligible enrollees-and thus the drugs they used-from the total population of dual- eligible enrollees. 3 Social Security Act § 1860D-14(b); 42 CFR § 423.780(b)(2)(i). 4Medicare subsidizes dual-eligible enrollees' premiums, deductibles, and other cost-sharing obligations up to a determined premium benchmark that varies by region. Medicare Prescription Drug, Improvement, and Modernization Act of 2003, P.L. No. 108-173 (enacted Dec. 8, 2003), § 101, Social Security Act § 1860D-14. 5 Sources (cont'd) 5 CMS randomly assigns dual-eligible enrollees to a Part D plan with premiums below the regional benchmark when (1) they become eligible for both Medicare and Medicaid but have not elected a Part D plan, (2) their current Part D plan will have a premium above the regional benchmark for the following year, or (3) the plan to which they were assigned is terminated. CMS, Prescription Drug Benefit Manual (PDBM), ch. 3, § 40.1.4-5. As an additional protection, Section 3305 of the Patient Protection and Affordable Care Act also requires that dual-eligible enrollees who are reassigned to a different plan receive a letter outlining the formulary coverage in their new plan for the drugs they are taking. The Patient Protection and Affordable Care Act, P.L. No. 111-148, § 3305. 6 Plan formularies do not generally have to include every available drug. Rather, to meet CMS's formulary requirements, they must include at least two drugs in each therapeutic category or class. CMS, PDBM, ch. 6, § 30.2.1. 7 83 Fed. Reg. 16440, 16514–19 (Apr. 16, 2018). 8 CMS, Parts C & D Enrollee Grievances, Organization/Coverage Determinations, and Appeals Guidance, §§ 40-60. 6