Understanding Tier Structure and the Coverage Gap

Transcription

1 Understanding Tier Structure and the Coverage Gap Presented by: Savi Lenis Lisa Lenzi Clinical Pharmacists

2 Learning Objectives The purpose of this course is to introduce the learner to: Tier and Tier Structure within a Medicare Part D plan The Coverage Gap/Donut Hole 2

3 Completion Statement After successful completion of this course, you will understand: What is a Tier within a Medicare Part D plan How is a general Tier Structure set up What is the process to request a change in the tier of a drug What is the Coverage Gap/Donut Hole What are ways to delay going into the Coverage Gap How can Care Managers assist members in the Coverage Gap 3

4 Definitions Coinsurance: a percentage of total drug cost. Member pays this amount instead of a copay. Copay: a set amount member pays for each prescription filled. Deductible: a preset, fixed amount the member pays before Medicare or other insurance starts to pay. Out-of-pocket costs: the amount a member pays (or others pay on their behalf) for prescription drugs starting January 1 of each year, NOT including premiums. This is also referred to as TrOOP or True Outof-Pocket costs. Total drug cost: The amount a member and the plan pay for prescription drugs starting January 1 of each year. This does not include premiums. 4

5 Tier Structure within Medicare Plans What is a Tier? All Part D plans have a specific list of drugs or formularies that they will cover. Formularies are broken into different tier levels. These tier levels determine the copay structure of each drug. All drug plans have different formularies and different tier levels with varying copays. 5

6 Tier Structure within Medicare Plans Drug plans may also differ in the number of tiers they use. Some plans may have 5 tiers while others may have 4 tiers. The highest tier of any plan is non-preferred and will have the highest copay or coinsurance. 6

7 Tier Structure Tier Structure Tier Types of Drugs Included Cost Tier 1 Most generic drugs Lowest copay Tier 2 Tier 3 Tier 4 Tier 5 Preferred brand name drugs Some high-cost generics Non-preferred brand name drugs Non-preferred generic drugs Non-preferred brand name drugs Specialty drugs Non-preferred brand name drugs Specialty drugs *General tier structure may vary with different plans Medium copay High copay Highest copay/coinsurance (percentage of total drug cost) Highest copay/coinsurance (percentage of total drug cost) 7

8 Can a member request that a medication change from one tier to another? YES! This process is called a tier exception. Tier exceptions may be considered when certain criteria are met. Call Humana Clinical Pharmacy Review (HCPR) at to ask if a drug is eligible for a tier exception request. 8

9 Can a member request that a medication change from one tier to another? Not all drugs are eligible for a tier exception. Prescribers MUST submit documentation to show that ALL drugs in the lower cost tier(s) used to treat the member s condition have been tried and failed, are not effective, or would likely cause adverse effects. The highest tier in any plan AND non-formulary drugs are NOT eligible for a tier exception. 9

10 The Coverage Gap or Donut Hole 10

11 What is the Donut Hole? Also known as the coverage gap. A period of coverage in Medicare Part D prescription drug plan where the member has used up initial coverage. In 2014, this will occur when total drug cost exceeds $2,850. While in the coverage gap, the Part D plan provides partial coverage between $2,850 and $4,550. The coverage gap ends when member spends $4,550 of true out-of-pocket cost (TrOOP). Not all members will enter the coverage gap. 11

12 Prescription Drug Plan Stages Prescription Drug Plan STAGES Stage Cost Plan Benefit Stage 1 (Annual Deductible) Deductible amount (if applicable). Member pays deductible Stage 2 (Initial Coverage) Stage 3 (Coverage Gap) Initial total drug cost limit of $2,850 After $2,850 in total drug cost spent, coverage gap ends when member spends $4,550 in true out-of-pocket (TrOOP) cost. Member pays copay or coinsurance Plan pays remaining costs for each drug Member pays 47.5% of brand name drugs and 72% of generic drugs Plan pays remaining costs for each drug Manufacturers provide 50% discount on brand name drugs covered by plan Stage 4 (Catastrophic Coverage) After $4,550 in TrOOP cost, there is no cost limit. Member pays 5% coinsurance OR $2.55 for covered generics/$6.35 for all other drugs (whichever is greater) *All costs apply only to drugs covered by plan Plan pays 95% of remaining costs until end of year 12

13 Coverage Gap: Brand Drugs Members pay 47.5% of the price for brand-name drugs while in the coverage gap in 2014 The entire price (including the discount amount the drug company pays) will count as out-of-pocket costs 13

14 Brand Coverage Gap Example: Mrs. Anderson Mrs. Anderson has reached the coverage gap in her Medicare drug plan. She goes to her pharmacy to fill a prescription for a covered brand-name drug. The price for the drug is $60, and there's a $2 dispensing fee that gets added to the cost. Mrs. Anderson will pay 47.5% of the plan's cost for the drug and dispensing fee: $62 x.475 = $

15 Brand Coverage Gap Example: Mrs. Anderson Mrs. Anderson will pay $29.45 for her prescription $59.45 will be counted as out-of-pocket spending and will help Mrs. Anderson get out of the coverage gap both the amount that Mrs. Anderson pays ($29.45) plus the manufacturer discount payment ($30.00) count as out-of-pocket spending. The remaining $2.55, which is 5% of the drug cost and 55% of the dispensing fee paid by the drug plan, isn't counted toward Mrs. Anderson's out-of-pocket spending. 15

16 Coverage Gap: Generic Drugs In 2014, Medicare will pay 28% of the price for generic drugs during the coverage gap. Members pay the remaining 72% of the price. What members pay for generic drugs during the coverage gap will decrease each year until it reaches 25% in 2020 in 2015, members will pay 65% of the price for generic drugs during the coverage gap. The coverage for generic drugs works differently from the discount for brand-name drugs. For generic drugs, only the amount member s pay counts toward getting out of the coverage gap. 16

17 Generic Coverage Gap Example: Mr. Evans Mr. Evans has reached the coverage gap in his Medicare drug plan. He goes to his pharmacy to fill a prescription for a covered generic drug. The price for the drug is $20, and there's a $2 dispensing fee that gets added to the cost. Mr. Evans will pay 72% of the plan s cost for the drug and dispensing fee: $22 x.72 = $ The $15.84 amount he pays will be counted as out-of-pocket spending to help him get out of the coverage gap. 17

18 What items count towards the coverage gap? Items that count towards the coverage gap: Yearly deductible, coinsurance, and copayments The discount on brand-name drugs in the coverage gap What members pay in the coverage gap Items that don't count towards the coverage gap: The drug plan premium Pharmacy dispensing fee What members pay for drugs that aren t covered 18

19 Ways to Delay Going into the Coverage Gap Suggest to Members: Speak with your doctor about switching to appropriate lower-tier alternatives Fill new prescriptions in small amounts until drug effects are known Fill medications at preferred pharmacies within the plan s network, preferably mail-order Contact Humana Pharmacy Benefits to see how close a member is to the coverage gap Check if a Medicare Part D drug can be billed under Medicare Part B (insulin for use with pump, nebulizer solution, etc.). Call HCPR at to ask if drug is eligible. 19

20 Patient Assistance Programs RxAssist.org Manufacturer Assistance Programs Needymeds.org How can Care Managers assist Members in the Coverage Gap? RightSource Specialty Pharmacy Financial Department Dual Eligibility Department (LIS) 20

21 Samples from doctor How can Care Managers assist Members in the Coverage Gap? Local community resources (churches, etc.) Organizations (American Diabetes Association) If member has tried every option and will not have medication to take, refer the member to his/her doctor. 21

22 Coverage Gap: Looking to the future By 2020, members will pay only 25% for covered brand and generic drugs during the coverage gap. This is the same percentage members pay from the time they meet their deductible (if their plan has one) until they reach the out-of-pocket spending limit (up to $4,550 in 2014, and up to $4,700 in 2015). 22

23 Coverage Gap: Looking to the future Year Percent members pay for brand-name drugs in the coverage gap Percent members for generic drugs in the coverage gap % 72% % 65% % 58% % 51% % 44% % 37% % 25% 23