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Supplementing PACE through Medicare Part D Thomas Snedden Director Pennsylvania PACE Program

Supplementing PACE through Medicare Part D Thomas Snedden Director Pennsylvania PACE Program State Coverage Initiatives Invitational Summit Conference October 7, 2004 Philadelphia, PA. Pennsylvania Pharmaceutical Assistance Contract for the Elderly (PACE) -- Implemented 1984

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Supplementing PACE through Medicare Part D Thomas Snedden Director Pennsylvania PACE Program

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  1. Supplementing PACE through Medicare Part D Thomas Snedden Director Pennsylvania PACE Program State Coverage Initiatives Invitational Summit Conference October 7, 2004 Philadelphia, PA

  2. Pennsylvania Pharmaceutical Assistance Contract for the Elderly (PACE) -- Implemented 1984 -- Funded by state lottery -- Currently serving 290,000 older Pennsylvanians -- Eligibility increase implemented January 1, 2004 -- Gross annualized expenditure of $480 Million -- Projected 2005 enrollment 335,000

  3. Program Eligibility Criteria -- Sixty-five years of age or older --Pennsylvania resident --Limited income PACE =< $14,500 (Single) =< $17,700 (Married) PACENET =< $23,500 (Single) =< $31,500 (Married) -- Not enrolled in Medicaid Rx -- No asset test -- Criteria makes eligible two-thirds of Pennsylvania’s 65+ population (1.25 million out of 1.9 million)

  4. Program Benefit Structure PACE -- First dollar coverage -- Low copays ($6 generics / $9 brands) -- 2003 state share for average participant was $2,189 PACENET -- $40 monthly deductible -- $8 generic copay and $15 brand copay -- 2003 state share for average participant was $1,249 BOTH PROGRAMS -- Open formulary -- Open network -- Open enrollment -- No quarterly or annual dollar limits on enrollees -- Concurrent drug utilization review (with mandatory edits) and step therapy requirements

  5. Program Provider Environment -- Open Pharmacy Network (3,021 Providers: 1,701 chains; 1,131 independents; 189 others) -- No formulary or Preferred Drug List (PDL) -- Average Wholesale Price (AWP) – 10% + $4.00 -- On-line, real time claims adjudication (No administrative transaction fees) -- No mail-order incentives or mandates -- Seventeen day turnaround on claim remittance deposit

  6. The “PACE Cardholder” -- 79 years old -- widow -- four or five maintenance medications (anti-inflammatory, anti-platelet, osteoporosis treatment, lipid-lowering agent, and gastrointestinal agent) -- less than 10th grade education -- lives alone in a private residence -- and overweight

  7. Medicare Prescription Drug Discount Card -- $600 annual Transitional Assistance(TA) Rx credit for Medicare beneficiaries with incomes less than 135% of FPL -- 151,000 PACE enrollees meet TA criteria (30,000 of which are also enrolled in Medicare HMO) -- PACE pharmacy benefit administrator (First Health) aapproved as exclusive Medicare card sponsor in effort to facilitate TA enrollment of qualified PACE enrollees -- PACE will “auto-enroll” TA eligibles, unless enrolled in Medicare HMO -- PACE pays TA coinsurance and waives PACE copay for its TA enrollees -- Net PACE savings of $150 million in ’04 / ’05

  8. ` Medicare Part D Rx -- Need final regs and Part D carriers -- Maintain PACE as stand alone benefit -- Auto-enroll low income subsidy eligibles in exclusive part D carrier -- Establish seamless COB interface -- Offset $200 million in annual PACE costs -- Expand PACE eligibility in 2006

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