Helping patients navigate Medicare Part DCopyright 2008 by Virgo Publishing.
http://www.renalbusiness.com/ Posted on: 09/30/2008
Renal Business Today
Editor's Note: The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 went into effect on Jan. 1, 2006, and created the Part D program, which is a federal program that subsidizes the cost of prescription drugs for Medicare beneficiaries. In 2007, the American Kidney Fund created a Part D program to financially assist kidney disease patient in obtaining drugs. RBT spoke with LaVarne A. Burton, president and CEO, American Kidney Fund, to discuss the program.
What was the reason behind starting the grant program to help dialysis patients cover the costs of their prescription medication under Medicare Part D?
We realized with the enactment of Medicare Part D that, like all other patients, dialysis patients were going to have to pay a certain amount out of pocket. Since their prescription costs are at least double those of the average Medicare patient, we knew that was going to be a considerable burden on them. In order to help them take advantage of the Part D program, we wanted to help them be able to pay those out-of-pocket costs.
Has Medicare Part D had a positive or negative impact on dialysis patients, and how much trouble is the donut hole for them?
It certainly has helped. A few years ago, even before the pharmacy benefit card, there was no assistance with medication. Certainly, I think every little bit helps, and this has been a great help to have these plans available. However, both because of the cost and sometimes the complexity of the program, the help has not been as widespread among all patients. We did a survey of social workers last year asking them to talk about the impact they think Medicare Part D has had on patients. We included, in that survey, about 700 social workers who are responsible for care of about 58,000 patients—so we covered about 15 percent of the ESRD population. What they told us is they believe about 60 percent of patients are having some difficulty in terms of paying for drugs, especially when they get in that donut hole, the coverage gap.
Is there a reason for the lack of coverage? Is it the complexity and maybe not enough education?
I think it’s both of those. Particularly, when you come to the donut hole, more than anything else, when these patients have to pay 100 percent of the costs of medication in that donut hole, it’s a matter of the cost of that medication and their ability to pay. These are patients who, very often, are not working because of the frequency of their treatments—they’re on dialysis three times a week. The disease itself imposes quite a bit of financial burden both for themselves and their families. Sometimes the difficulty of getting through that system and understanding what they are eligible for and what they are not eligible for can be a barrier. As an example, we require that everyone who receives assistance through the American Kidney Fund program first must be a participant in the Medicare Part D Program. And if you’re eligible for the Medicare low-income subsidy, you need to apply for that. We require everyone to apply before they come to American Kidney Fund because we are a resource of last resort. We were not initially able to help about half the people who came to us because they had not applied for the low-income subsidy, and in many cases this was because they didn’t understand that it was available or didn’t know how to access it. One of the other things that we’ve done is increase our ability to help people walk though this Part D system. We have a toll-free HelpLine, (866) 300-2900, where people may call and get information. We try to help them understand the Part D system, as well as to refer them to other resources that can help them to understand the program. So it’s a cost issue, and it’s also a complexity issue.
Can you briefly explain how the donut hole works?
In the Medicare Part D program, a patient has a deductible, and this year that deductible is about $275. You have to pay that out-of-pocket for your medication before the federal government will help you with the cost of medication. Then you go through an initial coverage limit where the government will pay 75 percent of the cost of your medications if they are listed on your Part D plan formulary, and the patient has to pay 25 percent out of pocket, until the patient and government combined have spent $2,235 (about $558 of which the patient pays). Once you get past the $2,235 mark, the patient has to cover the full cost of medication for another $3,216—this is the phase known as the donut hole. After spending that $3,216 on medications in the donut hole, the patient enters “catastrophic coverage,” where all but 5 percent of the cost of medication is covered. So, in all, the patient must incur just over $4,000 in out-of-pocket costs in order to reach catastrophic coverage—the initial $275, the $558 incurred during the initial coverage period, and the $3,216 incurred in the donut hole. That’s a considerable amount for many patients.
It seems there have been some cost issues, but has there been an increase in the access to more medications for patients as a result of Part D?
Certainly. I want to be clear that Medicare Part D is good for patients. As with most things, it may not solve all of your issues, but it certainly is something that has been good for patients. We want to help patients take advantage of it. That’s why we set up a program, because patients have to spend out of pocket in order to get through the donut hole. So what we’ve done in the American Kidney Fund Part D program is to provide financial assistance to patients to help them with the amount they would have to pay out of pocket so they can get through this donut hole. That really is one of those things that is unique about our program. There are many pharmaceutical companies and others that provide in-kind assistance or financial assistance to help patients with the cost of their medications, but the payments and in-kind payments from those programs don’t help patients meet the criteria to get through the donut hole. We operate under an opinion from the Inspector General of the Department of Health and Human Services that allows the money we provide to patients to be counted as if those payments came directly out of the patients’ pockets. That helps them get through the donut hole—and that’s a big advantage of the American Kidney Fund program.
How large is the AKF grant program today?
We have grown tremendously. We started in April 2007. In June of last year, we had about 200 patients. Today, we have about 1,800 patients enrolled in this program. We have activated that part of the program that helps patients with bone disease medication. We’ve decided to activate this program by different classes of medications, and we started with bone disease medications because they are very expensive, and we were able to identify pharmaceutical manufacturers that were willing to make financial contributions to us, so we could in turn help patients. We’re now looking to add to that, diabetes medications. So we are reaching out to manufactures of diabetes medications and requesting that they make grants to us, so that we can set up a special program that would allow renal patients access to dollars that will help them purchase diabetes medications.
Can you explain how the AKF works with pharmaceutical companies in order to help kidney patients pay for their medications?
First, we identify a class of drugs that we want to cover. For example, we started with bone disease medications then went to the manufacturers that produced these drugs and asked for grants to the American Kidney Fund. With those grants, we set up a special program for patients who need these medications. We then made that information available to our very broad network of dialysis centers and patients. The HHS advisory opinion allows us to accept money from the manufacturers to give it to patients to help with the cost of these medications, and to have that count towards the patients’ out-of-pocket costs so the patients move through the donut hole.
Have the pharmaceutical companies been receptive to this program?
They have been very receptive to using this program as a means to help patients. Particularly, since they know we operate under this advisory opinion, they understand that we are fully in compliance with all of the federal requirements. The other advantage of this program is that we have developed a pharmacy benefit card. That card is developed around each particular class of medications that we have. For example, we now have an American Kidney Fund Part D bone disease pharmacy card. A patient gets that pharmacy card, and it’s programmed to allow them to spend up to a certain limit. In the case of those eligible for the low-income subsidies, they can get a card that allows them up to $500 in assistance. For those who are not eligible for low-income subsidy from Medicare, they get a card that allows them to spend up to $2,000. The monies are activated when they go into their retail pharmacy, or a couple mail-service pharmacies that we deal with. The monies are not actually drawn down until the patient actually gets the medication. The card is programmed for that particular class of medications, so you can’t use it for something else.
I think that the pharmaceutical manufacturers also value the fact that the American Kidney Fund has a very strong patient network and history of effectively delivering assistance to patients. For example in 2007, we provided more than $100 million to 68,000 kidney patients, assisting them with health insurance, transportation to and from dialysis, medications, nutritional supplements and other health-related needs.
What qualifies a kidney disease patient to become eligible for this program?
There is an income limit, and the patient has to be at 350 percent of federal poverty level or lower. They have to submit an application to us in which they attest to their income, or they provide copies of their tax return, W-2 or pension statement.
Why have the donut hole in the first place if it places such a burden on patients?
We’re dealing with a difficult issue, and a costly one. The coverage gap or donut hole was included in Part D as a cost-savings measure to help reduce the cost of the program.
When Part D was first designed, overall, it was assumed that a little less than one-third of Medicare patients would eventually spend into the donut hole, and about half that number—about 14 percent or so—would eventually get out of that donut hole and return to a point where the federal government would assist them. That’s the general Medicare population, but the ESRD population is very hard-hit here. Even in the initial design and estimates for the program, the estimate was that 70 percent of ESRD patients would get into the donut hole, and about 39 percent would get out. We understand the overall design of the program; the difficulty is that our patients who have such high medical costs are going to be more adversely affected than others because of the coverage gap. They’re spending into the donut hole much earlier. Some estimates are that by late spring of each year, the average ESRD patient has already reached the donut hole and very much needs assistance, which is why we designed the American Kidney Fund Part D program.
Where do you see the grant program heading in the future?
Kidney disease patients have a wide list of comorbidities—diabetes, hypertension, cardiovascular, any number of issues. We’re working to expand our Part D program to assist patients to obtain a full range of medications that they need for the comorbidities that they experience along with kidney disease. We’re currently targeting diabetes drugs as the next class of drugs we’ll seek to cover through this program. RBT
SIDEBAR: About 3.4 million enrollees reached donut hole in 2007
A new study of Medicare Part D prescription drug use found that one in four (26 percent) Part D enrollees who filled any prescriptions in 2007 reached the coverage gap, better known as the “donut hole,” in which beneficiaries must cover the cost of their drugs.
The Kaiser Family Foundation study also found that 22 percent remained in the gap for the remainder of the year, and 4 percent ultimately received catastrophic coverage. Applying this estimate to the entire population of Part D enrollees, the analysis suggested that about 3.4 million beneficiaries (14 percent of all Part D enrollees) reached the coverage gap and faced the full cost of their prescriptions in 2007.
Beneficiaries taking drugs for serious chronic conditions had a substantially higher risk of a gap in coverage under their Medicare drug plan, according to the Kaiser study. For example, 64 percent of enrollees taking medications for Alzheimer’s disease reached the coverage gap in 2007, as did 51 percent of those taking oral anti-diabetic medications and 45 percent of patients on antidepressants. These percentages are among Part D plan enrollees who did not receive low-income subsidies.
In addition, the study found evidence of patients changing their use of prescription drugs when they are required to pay the full cost of medications in the coverage gap. Across eight classes of drugs examined—used to treat a variety of relatively common chronic conditions—15 percent of Part D enrollees who reached the gap stopped their drug therapy for that condition, 5 percent switched to another medication in the class, and 1 percent reduced the number of drugs they were taking in the class.
“The Medicare drug benefit has produced tangible relief for millions of people, despite the unusual coverage gap that was created to make the benefit fit within budget constraints,” Kaiser CEO and President Drew Altman said. “But if a new president and Congress consider changes to the drug benefit, it will be important to keep in mind that the coverage gap has consequences for some patients with serious health conditions.”
Beneficiaries who reached the coverage gap faced substantial increases in out-of-pocket spending, according to the Kaiser study. For example, among Part D enrollees who reached the coverage gap, but did not receive catastrophic coverage, average monthly out-of-pocket costs nearly doubled from $104 prior to the coverage gap, to $196 in the “donut hole.” The vast majority (84 percent) of the Part D enrollees who reached the coverage gap did not have sufficient additional drug spending during the year to receive catastrophic coverage, at which point their Part D plan would pay 95 percent of drug costs, according to Kaiser. The study also found that people who reached the gap paid the full cost of their medications, without any help from their Part D plan, for an average of just over 4 months and received catastrophic coverage for less than one month.
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