W ith much hoopla, a program to assist Medicare recipients paying for prescription medications was passed in 2004 but did not take effect immediately. Now in January 2006, “D day” has arrived — Medicare Part D day, that is. As you’re surely aware, the implementation of this prescription plan called Medicare Part D or the Medicare Modernization Act (MMA), is now underway. But how will it affect the way in which we practice dermatology? This article will explore the possibilities. The Program in a Nutshell Medicare Part D is a voluntary Medicare program available to all those who are enrolled in Medicare Parts A and B. This program was designed to help patients with Medicare Parts A and B pay for prescription medications. Medicare will certify private insurance companies, which can be stand-alone prescription providers or traditional insurance companies, to provide Medicare prescription drug coverage. Certified insurance companies will enroll participants in prescription plans and collect a monthly premium from participants and from Medicare. The plans will pay for specified percentages of medication costs at fixed levels of patients’ medical expenditures. Enrollment Medicare Part D enrollment started Nov. 15, 2005, and coverage for those enrolled in plans started on Jan. 1, 2006. Patients with prescription plans can keep their plans and do not need to enroll in Medicare Part D. However, on May 15, 2006, open enrollment period ends and after this time, those who enroll in a Medicare prescription drug plan will have to pay an additional 1% premium for each month that has passed since open enrollment closed and coverage will not begin until January 2007. Patients who have current prescription drug coverage that is, on average, as good as or better than Medicare (one-third of the nation’s seniors who have substantial drug coverage through a former employer, union or the military) or who get their medications through the Veterans Administration can join Medicare Part D at a later date penalty-free. Eligibility and Cost There are 42 million elderly and disabled Americans eligible for Medicare Part D. As of Jan. 1, 2006, Medicare Part D will provide extensive coverage for routine medication expenses and nearly complete insurance against drug costs that exceed $3,600 in any year. Beneficiaries who enroll will save an average of $1,200 on their drug purchases in 2006, according to federal Medicare officials. The typical beneficiary nationally will pay $32.20 a month for Part D coverage, according to Medicare officials. The federal government pays the private insurers an average of $94.08 per month for every person who enrolls for drug coverage. Coverage The coverage that Medicare Part D affords participants is a bit complicated. (See Table 1.) A participant using Medicare Part D must first pay a $250 deductible and the premiums of the plan before coverage kicks in. For the next $250 to $2,250 a participant spends on medications on the Medicare Part D’s formulary, Medicare picks up 75% of the medication spending. For spending levels of $2,250 to $5,100, the participant is required to pay 100% of medication costs. This uncovered spending range is termed the “doughnut hole.” There are safeguards for certain low-income beneficiaries. After a beneficiary incurs out-of-pocket expenses up to a certain amount (the “true out-of-pocket threshold” or “TrOOP” threshold), for expenditures above $5,100, the participant need only pay 5% of the cost of medications in this so-called catastrophic coverage. What a more expensive plan (one that costs more than $40 a month) does, that a cheaper plan (that costs less than $10) doesn’t, is: 1. have more medications on the formulary of the plan (e.g. all biologics for psoriasis and not just one or coverage of brand medications such as Penlac, Duac or TriLuma), which a cheaper plan would not have on its formulary. 2. have lower co-payments for medications a participant buys (e.g. tier-3 drugs have a $30 deductible while in the cheaper plan tier-3 drugs have a $100 deductible). Generic medications (even isotretinoin) seem to have low deductibles in both inexpensive and expensive plans. Obviously, with an expensive plan you will get to buy more medication before you fall into the doughnut hole. Few plans are offering any coverage for medication expenses in the doughnut hole, but a few are. Tiers and Medicare Part D plans In coverage for medications, insurance companies utilize a complex system for determining what a patient must pay for medications. Many plans have three- and four-tier formularies, which range from generic (tier 1) to preferred brand (tier 2) to non-preferred brand (tier 3) to special-situation medications needing approval (tier 4). These tiers relate to the fact that each plan can set its formulary. Plans also have considerable flexibility in designing formulary structures, in creating these tiered cost-sharing arrangements whereby certain “preferred” formulary drugs have lower beneficiary cost-sharing than “non-preferred” formulary drugs, and in setting participants’ co-payments based upon the a drugs preferred or non-preferred status. An appeals process exists whereby a participant can seek a plan to cover a non-formulary medication covered. Formulary Medicare has a set list of medications that can be part of a formulary, which it has derived from medications covered by Medicaid; however, some medications are not on the formulary of Medicare Plan D, such as benzodiazepines. Medicare has divided these medications into therapeutic categories based on coordination with the United States Pharmacopoeia (USP). The USP is an independent medication standard setting entity based in Bethesda, MD. For Medicare Part D, the USP developed a model set of guidelines listing drug categories and classes that may be used by Part D plan sponsors to develop formularies. The final USP guidelines list 146 unique therapeutic categories and pharmacologic classes. While conforming with the USP guidelines is voluntary, it would protect a plan from charges that its formulary classifications violate Medicare Part D by substantially discouraging enrollment of potential participants who utilize specific medications. Medications paid for by Medicare Part D must be available only by prescription, be FDA-approved, used and sold in the United States, and used for a medically-accepted indication. Weight loss or gain, barbiturates, benzodiazepines and outpatient drugs for which the manufacturer seeks to require associated tests purchased exclusively from the manufacturer will not be paid for by Medicare Part D. Drugs will not be covered under Part D if they can be paid for under Parts A or B (e.g. infliximab [Remicade], IVIG, and including the limited drug benefit covering drugs furnished “incident to” a physician’s service, pneumococcal pneumonia vaccines, hepatitis B vaccines, and influenza virus vaccines). State Medicaid programs may elect to cover drugs that are not covered under Part D. A Part D plan’s formulary must include at least two drugs in each therapeutic category and class. Money spent on medicines “on formulary” count toward TrOOP; money spent on “non-formulary” drugs does not count toward TrOOP. A doctor or health professional can assist the beneficiary in obtaining an exception if a medicine he or she needs is not “on formulary”. If approved, the patient’s share of that drug’s cost would count toward TrOOP. Dermatology and Formulary Rules I have reviewed the formularies of a number of plans. Most medications used by dermatologist are covered. A few are not. For example, several plans (a minority for sure) do not carry the brands Ultravate (halobetasol propionate cream), Desowen (desonide) lotion, Solaraze (diclofenac sodium) or Duac (clindamycin 1%, benzoyl peroxide 5%) on their formularies. Branded and specialized medications, for the most part, are covered but are in tiers 3 and 4 of payment structures, or if they're very expensive, then they require prior authorization or proof that use of less expensive medications did not work. So, if a biologic is on a formulary, then it is on the top tier at an expense of as much as $60 to $100 a month and/or it requires prior authorization and/or proof that other less expensive agents were tried and failed to elicit a clinical improvement. Interestingly, some expensive medications are not in the top tiers. Isotretinoin is for the most part in tier 1 of most plans, not that may seniors will use it. Also, thalidomide is usually in tier 2, not that many dermatologists prescribe it. I think that Medicare Part D will increase the preference of its participants for generic medications whenever possible. This is so even though, for example, brand-name topical steroids tend to work “better” because of their special recipes than generics that are merely biologically equivalent. Also, to me, some of the tiering seems out of line with the pricing of medications. Many plans place Klaron (sodium sulfacetamide) in Tier 3 along with Targretin (bexarotene), even though their prices differ logarithmically. CellCept and dapsone are both usually tier 2 despite a great difference in retail price. It remains to be seen if price differences of medications given to patients, mostly seniors who have little disposable income, will change our prescribing patterns. Linking Coverage to Diagnosis Another interesting element of the Medicare Part D is its linking of coverage of medications to diagnosis. In New York, where I practice, Medicaid covers almost everything except non-sedating antihistamines (which need answering questions in a phone tree), no questions asked — this means you could use a TNF-alpha inhibitor for dissecting cellulitis for a Medicaid patient with no questions asked. Medicare Part D requires some firm evidence that the medication fits the disease. Medicare Part D will approve “off-label” use of medication prescriptions under certain circumstances. Off-label drug prescriptions will only be paid for if they are FDA-approved drugs used for off-label indications that are recognized as effective for treatment in certain sources, which are: 1. in one of the standard reference compendia 2. in the majority of relevant peer-reviewed medical literature, if not recognized in one of the standard reference compendia 3. by the federal Secretary of Health and Human Services. Medicare Part D has defined “Standard Reference Compendia” as: 1. The American Hospital Formulary Service-Drug Information 2. The American Medical Association Drug Evaluation 3. The United States Pharmacopoeia-Drug Information 4. Other authoritative compendia as identified from time to time by the federal Secretary of Health and Human Services or the insurance commissioner. Peer-reviewed medical literature is defined as scientific studies printed in journals or other publications in which original manuscripts are published only after having been critically reviewed for scientific accuracy, validity and reliability by unbiased independent experts. Peer-reviewed medical literature does not include in-house publications of pharmaceutical manufacturing companies. If a medication or compound does not meet these criteria, it is considered to be experimental and investigational and is not covered. No benefits will be provided for any drug when the FDA has determined its use to be contraindicated. What does this mean practically as all dermatologists use medications off-label? Gleevec (imatinib mesylate), which is approved to treat lymphoma, would likely be approved if used to treat dermatofibrosarcoma protuberans because 20 articles (many with multiple patients) report it is effective. On the other hand, the use of efalizumab (Raptiva) to treat intractable atopic dermatitis would not because although it might have a scientific basis, there is little literature to prove it’s effective to treat atopic dermatitis. The approval of some drugs may be complex if some sources site the drug’s effectiveness in an off-label use while other sources question it. A Complex Plan The Medicare drug plan is complex in rules of coverage. It’s likely to increase the use of medications as seniors, who have little disposable income, will have more access to medications. Medicare Part D’s effects on dermatology will be complex and might change the prescribing habits of physicians as seniors seek to maximize coverage and migrate to generics. On the other hand, medications that were out of reach of middle- and upper- middle-income seniors with complex medical conditions only treatable with expensive medications will be obtainable because the maximum out-of-pocket expense is about $3,600 before catastrophic coverage kicks in. The future of medicine and the provision of care is about to become more interesting.
Medicare Part D: A Primer and Discussion of its Effects on Dermatology
W ith much hoopla, a program to assist Medicare recipients paying for prescription medications was passed in 2004 but did not take effect immediately. Now in January 2006, “D day” has arrived — Medicare Part D day, that is. As you’re surely aware, the implementation of this prescription plan called Medicare Part D or the Medicare Modernization Act (MMA), is now underway. But how will it affect the way in which we practice dermatology? This article will explore the possibilities. The Program in a Nutshell Medicare Part D is a voluntary Medicare program available to all those who are enrolled in Medicare Parts A and B. This program was designed to help patients with Medicare Parts A and B pay for prescription medications. Medicare will certify private insurance companies, which can be stand-alone prescription providers or traditional insurance companies, to provide Medicare prescription drug coverage. Certified insurance companies will enroll participants in prescription plans and collect a monthly premium from participants and from Medicare. The plans will pay for specified percentages of medication costs at fixed levels of patients’ medical expenditures. Enrollment Medicare Part D enrollment started Nov. 15, 2005, and coverage for those enrolled in plans started on Jan. 1, 2006. Patients with prescription plans can keep their plans and do not need to enroll in Medicare Part D. However, on May 15, 2006, open enrollment period ends and after this time, those who enroll in a Medicare prescription drug plan will have to pay an additional 1% premium for each month that has passed since open enrollment closed and coverage will not begin until January 2007. Patients who have current prescription drug coverage that is, on average, as good as or better than Medicare (one-third of the nation’s seniors who have substantial drug coverage through a former employer, union or the military) or who get their medications through the Veterans Administration can join Medicare Part D at a later date penalty-free. Eligibility and Cost There are 42 million elderly and disabled Americans eligible for Medicare Part D. As of Jan. 1, 2006, Medicare Part D will provide extensive coverage for routine medication expenses and nearly complete insurance against drug costs that exceed $3,600 in any year. Beneficiaries who enroll will save an average of $1,200 on their drug purchases in 2006, according to federal Medicare officials. The typical beneficiary nationally will pay $32.20 a month for Part D coverage, according to Medicare officials. The federal government pays the private insurers an average of $94.08 per month for every person who enrolls for drug coverage. Coverage The coverage that Medicare Part D affords participants is a bit complicated. (See Table 1.) A participant using Medicare Part D must first pay a $250 deductible and the premiums of the plan before coverage kicks in. For the next $250 to $2,250 a participant spends on medications on the Medicare Part D’s formulary, Medicare picks up 75% of the medication spending. For spending levels of $2,250 to $5,100, the participant is required to pay 100% of medication costs. This uncovered spending range is termed the “doughnut hole.” There are safeguards for certain low-income beneficiaries. After a beneficiary incurs out-of-pocket expenses up to a certain amount (the “true out-of-pocket threshold” or “TrOOP” threshold), for expenditures above $5,100, the participant need only pay 5% of the cost of medications in this so-called catastrophic coverage. What a more expensive plan (one that costs more than $40 a month) does, that a cheaper plan (that costs less than $10) doesn’t, is: 1. have more medications on the formulary of the plan (e.g. all biologics for psoriasis and not just one or coverage of brand medications such as Penlac, Duac or TriLuma), which a cheaper plan would not have on its formulary. 2. have lower co-payments for medications a participant buys (e.g. tier-3 drugs have a $30 deductible while in the cheaper plan tier-3 drugs have a $100 deductible). Generic medications (even isotretinoin) seem to have low deductibles in both inexpensive and expensive plans. Obviously, with an expensive plan you will get to buy more medication before you fall into the doughnut hole. Few plans are offering any coverage for medication expenses in the doughnut hole, but a few are. Tiers and Medicare Part D plans In coverage for medications, insurance companies utilize a complex system for determining what a patient must pay for medications. Many plans have three- and four-tier formularies, which range from generic (tier 1) to preferred brand (tier 2) to non-preferred brand (tier 3) to special-situation medications needing approval (tier 4). These tiers relate to the fact that each plan can set its formulary. Plans also have considerable flexibility in designing formulary structures, in creating these tiered cost-sharing arrangements whereby certain “preferred” formulary drugs have lower beneficiary cost-sharing than “non-preferred” formulary drugs, and in setting participants’ co-payments based upon the a drugs preferred or non-preferred status. An appeals process exists whereby a participant can seek a plan to cover a non-formulary medication covered. Formulary Medicare has a set list of medications that can be part of a formulary, which it has derived from medications covered by Medicaid; however, some medications are not on the formulary of Medicare Plan D, such as benzodiazepines. Medicare has divided these medications into therapeutic categories based on coordination with the United States Pharmacopoeia (USP). The USP is an independent medication standard setting entity based in Bethesda, MD. For Medicare Part D, the USP developed a model set of guidelines listing drug categories and classes that may be used by Part D plan sponsors to develop formularies. The final USP guidelines list 146 unique therapeutic categories and pharmacologic classes. While conforming with the USP guidelines is voluntary, it would protect a plan from charges that its formulary classifications violate Medicare Part D by substantially discouraging enrollment of potential participants who utilize specific medications. Medications paid for by Medicare Part D must be available only by prescription, be FDA-approved, used and sold in the United States, and used for a medically-accepted indication. Weight loss or gain, barbiturates, benzodiazepines and outpatient drugs for which the manufacturer seeks to require associated tests purchased exclusively from the manufacturer will not be paid for by Medicare Part D. Drugs will not be covered under Part D if they can be paid for under Parts A or B (e.g. infliximab [Remicade], IVIG, and including the limited drug benefit covering drugs furnished “incident to” a physician’s service, pneumococcal pneumonia vaccines, hepatitis B vaccines, and influenza virus vaccines). State Medicaid programs may elect to cover drugs that are not covered under Part D. A Part D plan’s formulary must include at least two drugs in each therapeutic category and class. Money spent on medicines “on formulary” count toward TrOOP; money spent on “non-formulary” drugs does not count toward TrOOP. A doctor or health professional can assist the beneficiary in obtaining an exception if a medicine he or she needs is not “on formulary”. If approved, the patient’s share of that drug’s cost would count toward TrOOP. Dermatology and Formulary Rules I have reviewed the formularies of a number of plans. Most medications used by dermatologist are covered. A few are not. For example, several plans (a minority for sure) do not carry the brands Ultravate (halobetasol propionate cream), Desowen (desonide) lotion, Solaraze (diclofenac sodium) or Duac (clindamycin 1%, benzoyl peroxide 5%) on their formularies. Branded and specialized medications, for the most part, are covered but are in tiers 3 and 4 of payment structures, or if they're very expensive, then they require prior authorization or proof that use of less expensive medications did not work. So, if a biologic is on a formulary, then it is on the top tier at an expense of as much as $60 to $100 a month and/or it requires prior authorization and/or proof that other less expensive agents were tried and failed to elicit a clinical improvement. Interestingly, some expensive medications are not in the top tiers. Isotretinoin is for the most part in tier 1 of most plans, not that may seniors will use it. Also, thalidomide is usually in tier 2, not that many dermatologists prescribe it. I think that Medicare Part D will increase the preference of its participants for generic medications whenever possible. This is so even though, for example, brand-name topical steroids tend to work “better” because of their special recipes than generics that are merely biologically equivalent. Also, to me, some of the tiering seems out of line with the pricing of medications. Many plans place Klaron (sodium sulfacetamide) in Tier 3 along with Targretin (bexarotene), even though their prices differ logarithmically. CellCept and dapsone are both usually tier 2 despite a great difference in retail price. It remains to be seen if price differences of medications given to patients, mostly seniors who have little disposable income, will change our prescribing patterns. Linking Coverage to Diagnosis Another interesting element of the Medicare Part D is its linking of coverage of medications to diagnosis. In New York, where I practice, Medicaid covers almost everything except non-sedating antihistamines (which need answering questions in a phone tree), no questions asked — this means you could use a TNF-alpha inhibitor for dissecting cellulitis for a Medicaid patient with no questions asked. Medicare Part D requires some firm evidence that the medication fits the disease. Medicare Part D will approve “off-label” use of medication prescriptions under certain circumstances. Off-label drug prescriptions will only be paid for if they are FDA-approved drugs used for off-label indications that are recognized as effective for treatment in certain sources, which are: 1. in one of the standard reference compendia 2. in the majority of relevant peer-reviewed medical literature, if not recognized in one of the standard reference compendia 3. by the federal Secretary of Health and Human Services. Medicare Part D has defined “Standard Reference Compendia” as: 1. The American Hospital Formulary Service-Drug Information 2. The American Medical Association Drug Evaluation 3. The United States Pharmacopoeia-Drug Information 4. Other authoritative compendia as identified from time to time by the federal Secretary of Health and Human Services or the insurance commissioner. Peer-reviewed medical literature is defined as scientific studies printed in journals or other publications in which original manuscripts are published only after having been critically reviewed for scientific accuracy, validity and reliability by unbiased independent experts. Peer-reviewed medical literature does not include in-house publications of pharmaceutical manufacturing companies. If a medication or compound does not meet these criteria, it is considered to be experimental and investigational and is not covered. No benefits will be provided for any drug when the FDA has determined its use to be contraindicated. What does this mean practically as all dermatologists use medications off-label? Gleevec (imatinib mesylate), which is approved to treat lymphoma, would likely be approved if used to treat dermatofibrosarcoma protuberans because 20 articles (many with multiple patients) report it is effective. On the other hand, the use of efalizumab (Raptiva) to treat intractable atopic dermatitis would not because although it might have a scientific basis, there is little literature to prove it’s effective to treat atopic dermatitis. The approval of some drugs may be complex if some sources site the drug’s effectiveness in an off-label use while other sources question it. A Complex Plan The Medicare drug plan is complex in rules of coverage. It’s likely to increase the use of medications as seniors, who have little disposable income, will have more access to medications. Medicare Part D’s effects on dermatology will be complex and might change the prescribing habits of physicians as seniors seek to maximize coverage and migrate to generics. On the other hand, medications that were out of reach of middle- and upper- middle-income seniors with complex medical conditions only treatable with expensive medications will be obtainable because the maximum out-of-pocket expense is about $3,600 before catastrophic coverage kicks in. The future of medicine and the provision of care is about to become more interesting.
W ith much hoopla, a program to assist Medicare recipients paying for prescription medications was passed in 2004 but did not take effect immediately. Now in January 2006, “D day” has arrived — Medicare Part D day, that is. As you’re surely aware, the implementation of this prescription plan called Medicare Part D or the Medicare Modernization Act (MMA), is now underway. But how will it affect the way in which we practice dermatology? This article will explore the possibilities. The Program in a Nutshell Medicare Part D is a voluntary Medicare program available to all those who are enrolled in Medicare Parts A and B. This program was designed to help patients with Medicare Parts A and B pay for prescription medications. Medicare will certify private insurance companies, which can be stand-alone prescription providers or traditional insurance companies, to provide Medicare prescription drug coverage. Certified insurance companies will enroll participants in prescription plans and collect a monthly premium from participants and from Medicare. The plans will pay for specified percentages of medication costs at fixed levels of patients’ medical expenditures. Enrollment Medicare Part D enrollment started Nov. 15, 2005, and coverage for those enrolled in plans started on Jan. 1, 2006. Patients with prescription plans can keep their plans and do not need to enroll in Medicare Part D. However, on May 15, 2006, open enrollment period ends and after this time, those who enroll in a Medicare prescription drug plan will have to pay an additional 1% premium for each month that has passed since open enrollment closed and coverage will not begin until January 2007. Patients who have current prescription drug coverage that is, on average, as good as or better than Medicare (one-third of the nation’s seniors who have substantial drug coverage through a former employer, union or the military) or who get their medications through the Veterans Administration can join Medicare Part D at a later date penalty-free. Eligibility and Cost There are 42 million elderly and disabled Americans eligible for Medicare Part D. As of Jan. 1, 2006, Medicare Part D will provide extensive coverage for routine medication expenses and nearly complete insurance against drug costs that exceed $3,600 in any year. Beneficiaries who enroll will save an average of $1,200 on their drug purchases in 2006, according to federal Medicare officials. The typical beneficiary nationally will pay $32.20 a month for Part D coverage, according to Medicare officials. The federal government pays the private insurers an average of $94.08 per month for every person who enrolls for drug coverage. Coverage The coverage that Medicare Part D affords participants is a bit complicated. (See Table 1.) A participant using Medicare Part D must first pay a $250 deductible and the premiums of the plan before coverage kicks in. For the next $250 to $2,250 a participant spends on medications on the Medicare Part D’s formulary, Medicare picks up 75% of the medication spending. For spending levels of $2,250 to $5,100, the participant is required to pay 100% of medication costs. This uncovered spending range is termed the “doughnut hole.” There are safeguards for certain low-income beneficiaries. After a beneficiary incurs out-of-pocket expenses up to a certain amount (the “true out-of-pocket threshold” or “TrOOP” threshold), for expenditures above $5,100, the participant need only pay 5% of the cost of medications in this so-called catastrophic coverage. What a more expensive plan (one that costs more than $40 a month) does, that a cheaper plan (that costs less than $10) doesn’t, is: 1. have more medications on the formulary of the plan (e.g. all biologics for psoriasis and not just one or coverage of brand medications such as Penlac, Duac or TriLuma), which a cheaper plan would not have on its formulary. 2. have lower co-payments for medications a participant buys (e.g. tier-3 drugs have a $30 deductible while in the cheaper plan tier-3 drugs have a $100 deductible). Generic medications (even isotretinoin) seem to have low deductibles in both inexpensive and expensive plans. Obviously, with an expensive plan you will get to buy more medication before you fall into the doughnut hole. Few plans are offering any coverage for medication expenses in the doughnut hole, but a few are. Tiers and Medicare Part D plans In coverage for medications, insurance companies utilize a complex system for determining what a patient must pay for medications. Many plans have three- and four-tier formularies, which range from generic (tier 1) to preferred brand (tier 2) to non-preferred brand (tier 3) to special-situation medications needing approval (tier 4). These tiers relate to the fact that each plan can set its formulary. Plans also have considerable flexibility in designing formulary structures, in creating these tiered cost-sharing arrangements whereby certain “preferred” formulary drugs have lower beneficiary cost-sharing than “non-preferred” formulary drugs, and in setting participants’ co-payments based upon the a drugs preferred or non-preferred status. An appeals process exists whereby a participant can seek a plan to cover a non-formulary medication covered. Formulary Medicare has a set list of medications that can be part of a formulary, which it has derived from medications covered by Medicaid; however, some medications are not on the formulary of Medicare Plan D, such as benzodiazepines. Medicare has divided these medications into therapeutic categories based on coordination with the United States Pharmacopoeia (USP). The USP is an independent medication standard setting entity based in Bethesda, MD. For Medicare Part D, the USP developed a model set of guidelines listing drug categories and classes that may be used by Part D plan sponsors to develop formularies. The final USP guidelines list 146 unique therapeutic categories and pharmacologic classes. While conforming with the USP guidelines is voluntary, it would protect a plan from charges that its formulary classifications violate Medicare Part D by substantially discouraging enrollment of potential participants who utilize specific medications. Medications paid for by Medicare Part D must be available only by prescription, be FDA-approved, used and sold in the United States, and used for a medically-accepted indication. Weight loss or gain, barbiturates, benzodiazepines and outpatient drugs for which the manufacturer seeks to require associated tests purchased exclusively from the manufacturer will not be paid for by Medicare Part D. Drugs will not be covered under Part D if they can be paid for under Parts A or B (e.g. infliximab [Remicade], IVIG, and including the limited drug benefit covering drugs furnished “incident to” a physician’s service, pneumococcal pneumonia vaccines, hepatitis B vaccines, and influenza virus vaccines). State Medicaid programs may elect to cover drugs that are not covered under Part D. A Part D plan’s formulary must include at least two drugs in each therapeutic category and class. Money spent on medicines “on formulary” count toward TrOOP; money spent on “non-formulary” drugs does not count toward TrOOP. A doctor or health professional can assist the beneficiary in obtaining an exception if a medicine he or she needs is not “on formulary”. If approved, the patient’s share of that drug’s cost would count toward TrOOP. Dermatology and Formulary Rules I have reviewed the formularies of a number of plans. Most medications used by dermatologist are covered. A few are not. For example, several plans (a minority for sure) do not carry the brands Ultravate (halobetasol propionate cream), Desowen (desonide) lotion, Solaraze (diclofenac sodium) or Duac (clindamycin 1%, benzoyl peroxide 5%) on their formularies. Branded and specialized medications, for the most part, are covered but are in tiers 3 and 4 of payment structures, or if they're very expensive, then they require prior authorization or proof that use of less expensive medications did not work. So, if a biologic is on a formulary, then it is on the top tier at an expense of as much as $60 to $100 a month and/or it requires prior authorization and/or proof that other less expensive agents were tried and failed to elicit a clinical improvement. Interestingly, some expensive medications are not in the top tiers. Isotretinoin is for the most part in tier 1 of most plans, not that may seniors will use it. Also, thalidomide is usually in tier 2, not that many dermatologists prescribe it. I think that Medicare Part D will increase the preference of its participants for generic medications whenever possible. This is so even though, for example, brand-name topical steroids tend to work “better” because of their special recipes than generics that are merely biologically equivalent. Also, to me, some of the tiering seems out of line with the pricing of medications. Many plans place Klaron (sodium sulfacetamide) in Tier 3 along with Targretin (bexarotene), even though their prices differ logarithmically. CellCept and dapsone are both usually tier 2 despite a great difference in retail price. It remains to be seen if price differences of medications given to patients, mostly seniors who have little disposable income, will change our prescribing patterns. Linking Coverage to Diagnosis Another interesting element of the Medicare Part D is its linking of coverage of medications to diagnosis. In New York, where I practice, Medicaid covers almost everything except non-sedating antihistamines (which need answering questions in a phone tree), no questions asked — this means you could use a TNF-alpha inhibitor for dissecting cellulitis for a Medicaid patient with no questions asked. Medicare Part D requires some firm evidence that the medication fits the disease. Medicare Part D will approve “off-label” use of medication prescriptions under certain circumstances. Off-label drug prescriptions will only be paid for if they are FDA-approved drugs used for off-label indications that are recognized as effective for treatment in certain sources, which are: 1. in one of the standard reference compendia 2. in the majority of relevant peer-reviewed medical literature, if not recognized in one of the standard reference compendia 3. by the federal Secretary of Health and Human Services. Medicare Part D has defined “Standard Reference Compendia” as: 1. The American Hospital Formulary Service-Drug Information 2. The American Medical Association Drug Evaluation 3. The United States Pharmacopoeia-Drug Information 4. Other authoritative compendia as identified from time to time by the federal Secretary of Health and Human Services or the insurance commissioner. Peer-reviewed medical literature is defined as scientific studies printed in journals or other publications in which original manuscripts are published only after having been critically reviewed for scientific accuracy, validity and reliability by unbiased independent experts. Peer-reviewed medical literature does not include in-house publications of pharmaceutical manufacturing companies. If a medication or compound does not meet these criteria, it is considered to be experimental and investigational and is not covered. No benefits will be provided for any drug when the FDA has determined its use to be contraindicated. What does this mean practically as all dermatologists use medications off-label? Gleevec (imatinib mesylate), which is approved to treat lymphoma, would likely be approved if used to treat dermatofibrosarcoma protuberans because 20 articles (many with multiple patients) report it is effective. On the other hand, the use of efalizumab (Raptiva) to treat intractable atopic dermatitis would not because although it might have a scientific basis, there is little literature to prove it’s effective to treat atopic dermatitis. The approval of some drugs may be complex if some sources site the drug’s effectiveness in an off-label use while other sources question it. A Complex Plan The Medicare drug plan is complex in rules of coverage. It’s likely to increase the use of medications as seniors, who have little disposable income, will have more access to medications. Medicare Part D’s effects on dermatology will be complex and might change the prescribing habits of physicians as seniors seek to maximize coverage and migrate to generics. On the other hand, medications that were out of reach of middle- and upper- middle-income seniors with complex medical conditions only treatable with expensive medications will be obtainable because the maximum out-of-pocket expense is about $3,600 before catastrophic coverage kicks in. The future of medicine and the provision of care is about to become more interesting.
