Transcript 2004_SCI_MedicarePartD_hardy

Implications of Part D Medicare Drug
Benefit on State Medicaid Programs for
the Dual Eligibles
Pennsylvania’s Perspective
James Hardy
Project Manager
Pennsylvania Department of Public Welfare
Background
• The Pennsylvania Medical Assistance Program is
divided into three parts
– Capitated Managed Care Program
• 1.1 million members in 04-05
• 12% are dual eligibles
– FFS Managed Care Program
• 500,000 members
• 17% are dual eligibles
– LTC Managed Care Program
• 80,000 members in nursing homes
• 90% are dual eligibles
Managed Care Background
• Pennsylvania operates a mandatory managed care program
(“HealthChoices”) and a smaller voluntary program
– Dual Eligibles are mandated into the HealthChoices Program
– Duals (and other others) are disenrolled from managed care after 30
days in a nursing home and moved to FFS
• In CY 03 dual eligibles represented 12% of the enrollment and 14%
of total cost
• Dual eligible drug costs were 34% of the total drug spend
• Dual eligible drug costs were 78% of total medical costs
Fee For Service Overview
(non nursing home, non waiver)
• In CY 03 Dual eligibles accounted for 17% of the
member months and 20% of the medical costs
• Dual Eligible drugs costs were 44% of total drug spend
• Dual Eligible drug costs were 80% of total dual eligible
medical costs
Part D Implications for Managed Care
• With drugs removed from the benefit, what are the MCOs really
managing?
– MA becomes a true secondary payer for almost all services
– Access to data and ability to influence compliance dramatically reduced
– Care Coordination was never easy – now much harder if not impossible
• The Department is seriously considering carving the duals out of
managed care
– We are evaluating several other options, especially as it related to the
MR membership who have benefited from case management and
special needs programs
• Eliminating the dual eligible drug benefit reduces the potential tax
base for our proposed MCO assessment
Part D Implications for Fee-For-Service
• Had to make a decision about dual eligibles and our new
EPCCM program – Access Plus
– 50% of potential targets for DM were duals
• Decided to carve out of Access Plus
– Not clear financial incentives/penalties work because vendor has
little control over cost or behavior
– Not much direct financial exposure after drugs removed
• Some concern about potential impact on non drug costs
if drug access to duals is restricted
• Concern about impact on negotiating power if we move
to supplemental rebate strategy
Conclusions
• Dual Eligible consumers may be losers in Part D
– Lose benefit of established managed care programs/DM
– Lose potential benefit of Access Plus
– No guarantee that CMS DM pilots will have any short term or
long impact to offset loss
• States ability to control remaining costs further
compromised after Part D
• Pennsylvania comments to CMS on Part D discussed
– Need to require PDPs to have care coordination agreements
with States
– Allowing states to do auto assignment to PDPs of its choosing
on a “random” basis