Dual Eligibles with Mental Disorders and Medicare Part D: How are They Faring?

1. Dual Eligibles with Mental Disorders and Medicare Part D: How are They Faring? Julie Donohue University of Pittsburgh Haiden Huskamp Harvard Medical School Sam Zuvekas Agency for Healthcare Research and Quality

2. Context • 6 million Medicare beneficiaries dually eligible for Medicaid moved to Medicare Part D drug plans. • Random assignment to one of multiple benchmark plans, can switch • Estimated 60% of disabled and 20% of elderly dual-eligibles have mental disorders • Protections • “All or substantially all” rule for antidepressants, antipsychotics, and anticonvulsants • Fixed copay for generics, slightly higher for branded drugs, can’t use cost-sharing tiers • Risk adjusted payments to PDPs

3. Medication Use and Spending: U.S. Community Population SOURCE: Medical Expenditure Panel Survey 2005-2006

4. Medication Use and Spending: Medicare Community Population SOURCE: Medical Expenditure Panel Survey 2005-2006

5. Medication Use and Spending: Dual Eligible Community Population SOURCE: Medical Expenditure Panel Survey 2005-2006

6. Formulary Coverage of Selected Atypical Antipsychotics SOURCE: January 2006, 2007, and 2008 CMS Prescription Drug Formulary and Pharmacy Network Files

7. Formulary Coverage of Selected Antidepressants SOURCE: January 2006, 2007, and 2008 CMS Prescription Drug Formulary and Pharmacy Network Files

8. Use of Utilization Management Tools for Selected Atypical Antipsychotics SOURCE: January 2006, 2007, and 2008 CMS Prescription Drug Formulary and Pharmacy Network Files

9. Use of Utilization Management Tools for Selected Antidepressants SOURCE: January 2006, 2007, and 2008 CMS Prescription Drug Formulary and Pharmacy Network Files

10. Percentage of Benchmark PDPs Requiring Either Step Therapy or Prior Authorization for Any Drug SOURCE: January 2006, 2007, and 2008 CMS Prescription Drug Formulary and Pharmacy Network Files

11. Other Findings from the Literature • Medication Discontinuities • Some evidence of problems accessing particular medications (Hall et al 2007; West 2007, 2009) • Psychotropic Drug Prices • Frank and Newhouse (2008) some evidence that prices for antipsychotics increased under Part D • Plan Choice • Most Dual Eligibles assigned randomly, few switch plans (11% in 2006, Neuman et al. 2007) • Reduction in the Number of Benchmark Plans • 409 plans in 2006 => 308 in 2009 • 2009 Six states have <=5 plans, Nevada has 1

12. Summary and Implications: Out-of-Pocket Costs • Major Change in Financing of Psychotropic Medications: • Out of pocket costs decreased for non dual-eligibles • Out of pocket costs flat for dual-eligibles • Some indirect evidence of medication discontinuities

13. Summary and Implications: Formulary Coverage • Formulary coverage relatively generous • But gaps for some formulations • Increasing use of utilization management • Consider monitoring prior authorization approval rates, include in plan performance • Consider alternatives to random assignment

14. Summary and Implications: PDP Market • PDPs exiting from market • Limits choice • Reassignment may lead to medication discontinuities • Doubling of PDP risk corridors in 2008 exposes plans to greater risk and may lead to further plan exits if risk adjustment doesn’t accurately reflect dual eligibles expected costs • Consider changes in risk adjustment systems to include drug utilization • Consider exposing PDPs to less risk for dual-eligibles

15. More Information Donohue, Julie M, Haiden A. Huskamp and Samuel H. Zuvekas. 2009. “Dual Eligibles with Mental Disorders and Medicare Part D: How Are They Faring?” Health Affairs 28(May/June): 746-759.