WASHINGTON - Thousands of elderly patients are learning the hard
way that it isn't enough to check whether their medicines are
covered under a new Medicare drug plan they have chosen.
Insurers are using a broad range of tools to get customers to
take the cheaper drugs they want them to take, and failure to
follow their instructions can be costly.
In many cases, a patient's doctor has to get prior approval for a
drug before the plan will cover it. In others, the plan will
limit the quantity of a drug the patient can get.
Plans also divide drugs into tiers. The lowest level requires
only nominal out-of-pocket costs, while the highest - called
specialty tiers - require the customer to pay for a quarter, a
third or even more of the costs.
The tools are not unique to Medicare. The Veterans Affairs
Department uses them, and almost all workplace drug plans -
including the health plan used by members of Congress - have
However, the Medicare plans have taken the tools to a whole new
level, said Dan Mendelson, president of Avalere Health, a
While plans in the private sector routinely place 15 to 20 drugs
on the specialty tier, Medicare plans "have an average of 88
drugs on the fourth tier. That's unprecedented," he said.
"What they're doing is funding the benefit by shifting the costs
onto beneficiaries who have chronic illness," he added.
The government's point man on Medicare, Mark McClellan, said
tiering keeps expenses down by directing patients to generic or
cheaper brand-name drugs.
He said the federal government closely monitors plans to make
sure they don't withhold drugs that are crucial to a patient's
health. And the appeals process for doctors and patients is
speedy, he said.
"So far, we haven't seen comments that we should do something
vastly different from what we're doing now," said McClellan,
administrator for the Centers for Medicare and Medicaid Services.
"We'll keep looking closely to make sure we're striking that
He said the Medicare drug benefit is more generous than other
government programs in the number of drugs that are covered.
That's particularly true for the mentally ill, people who have
had organ transplants, cancer patents, people prone to seizures
and AIDS patients, he said.
But drugs for those problems are also subject to cost-cutting.
For instance, Dr. Daniel Hicks of Georgetown University Medical
Center prescribed 400 milligrams a day of Seroquel to a patient
to treat depression. Her plan, sponsored by Humana, would only
cover 300 milligrams a day.
Hicks said he interceded with a Humana official and was told the
patient could get the higher dosage, but the patient was told
The patient "could easily have died, due to a blatant mistake by
the company which may not have been corrected," Hicks said.
Mary Sellers, a spokeswoman for Humana, said the company follows
guidelines established by the Food and Drug Administration when
establishing quantity limits on drugs. She said the company would
contact Hicks to discuss his patient.
Some patient groups said what happened to Hicks' patient is an
example of the difficulty certain chronically ill patients can
face in getting medicine through the new Medicare drug program.
The American Psychiatric Association recently testified before
Congress that it has received hundreds of calls from doctors and
individuals reporting the denial of essential medications.
McClellan said CMS is tracking complaints and will hold companies
accountable when they don't quickly address requests for prior
authorization or for exceeding a quantity limit.
On the tiering issue, McClellan noted that the poorest of
Medicare beneficiaries are exempted from the tools that would
require them to make higher copayments. For those who live in
poverty, out-of-pocket expenses are limited to $1 for generics
and $3 for brand name drugs.
McClellan noted that wealthier beneficiaries still have some
additional protection from the specialty tiers because the
government will pay 95 percent of drug costs after beneficiaries
pay $3,600 in a particular year. Many beneficiaries taking
expensive medication didn't have that sort of protection before
Mark Merritt, president of the association that represents
pharmacy benefit managers, said that restrictions are designed
primarily for safety reasons, not profit.
"Sometimes they have cost-savings benefits, sometimes they
don't," said Merritt, president of the Pharmaceutical Care
Management Association. "But mostly, it's about getting patients
the kinds of medicines they need."
Merritt said getting the insurer's approval ensures that patients
adhere to safety guidelines established for a particular drug and
He cited the painkiller OxyContin. "That should have prior
authorization every refill," Merritt said.