Transcript Document

Current Status and Future Outlook
for Long Term Care Under
Medicare Part D
Laurie Forrester, PharmD
April 19, 2006
A Presentation for the Medicaid Health Plans of America
Don’t let this happen to you!
Today’s Agenda
• Long term care (LTC) environment
• Medicare D in LTC
• The first 100 days: implementation
challenges
• What lies ahead
o
2007 strategic considerations
• Future Vision
Long Term Care Environment
Long-Term Care Market
Total 2.9 million beds
ALF & Alternate Care
1.2 M beds
LTC SNF
1.7 M beds
Institutional Pharmacy: Annual
Expenditures
LTC spend is more than double the ALF spend
$6
$5
$4
$ in billions
$3
$2
$1
$0
1995
1997
1999
2000
2001
Assited Living Market
2002
2003
2004
LTC Market
Source: IMS data, company reports, and Warburg Dillon Read LLC estimates
Influencing Factors: ALFs vs SNFs
Assisted Living Facilities - Growing Market
• ALFs are generally unregulated by the states
• Increasing level of services provided by ALFs
• Elders with higher incomes choose ALFs
Skilled Nursing Facilities - Flat Market
• SNFs are highly regulated at the state and federal level
• CMS defined as INSTITUTIONALIZED
• Up to 75% of SNF residents will be Dual Eligible beneficiaries
- low paying/ 2.5 year stays/ high # of co-morbid conditions
PDP Enrollment:
What’s Known at This Point…
Institutional Care Settings
CMS requires adequate LTC Pharmacy Network
coverage for all institutional care facilities:
• Skilled Nursing Facilities
• Assisted Living Facilities (wavier beds only)
• Correctional Facilities
• Mental Health/ Mental Retardation
• Group Homes
• Hospice
Influencing Factors: ALFs vs SNFs
• Medicare Part D impacted both but SNF residents qualify
for Special Enrollment Period (SEP) and ALFs do NOT
• Relatively few Low Income Subsidy or Dual Eligible in
the ALFs; most ALF residents are full premium and co-pay
• Residents in both may have Medicare Part B and Part D
but the coverage rules are different:
o ALF residents have infusion therapy and nebulized
medications covered under Part B
o In the SNF, infusion therapy and nebulized meds are
covered under Part D
LTC Residents
Average LTC resident is:
−Female > Male
−83 years old
−6 or more comorbidities
−On 10 scheduled meds
− renal & liver function,  ADRs
−Seen by Physician ~ every 1.3 mo.
−Average stay 2 ½ years
Continuity of care and consistency of drug
regimen is critical.
American Society of Consultant Pharmacists 2004
American Medical Directors Association 2004
LTC Pharmacy: CMS Service and
Performance Standards
•
Services
Offered by:
Retail
1.
Comprehensive Inventory of LTC Meds
2.
Pharmacy Ops and Rx Orders –DUR &
Cost Containment
3.
Special Packaging
4.
I.V. meds and I.V. nutritional therapies
5.
Compounding Alternative Formulations
6.
Pharmacists and nurses available
24 hrs/ day, 365 days/ year
7.
Delivery service available 24 hrs/ day
8.
Emergency Boxes ( E-kits)
9.
E-kit Log Books
10. Miscellaneous Reports & Forms










Hospital
LTC
 


 
 
 
 
 




+/
CMS Long Term Care Guidance. March 16, 2005
LTC Pharmacy: Additional Standard
Service and Performance Offerings
Retail
Hospital
LTC
Consultant Pharmacists to provide
on-site chart review (DRR),
inspections and written reports as
required by law OBRA 90



•
Inservice and educational programs

•
Participation on facility Quality
Assurance & Case Management
teams

Services Offered by:
•
•
Medicare Part A “Senior Safe”

Formulary development and
management for care assurance and
cost containment
 
+/- 


LTC Pharmacy Alliance 2005
LTC Pharmacy Performance &
Service Criteria
•
CMS performance and service criteria are minimum
requirements for a network LTC pharmacy.
•
Payment to LTC pharmacies under Part D only
covers drug ingredient costs and dispensing fees as
defined in the final regulations (42 CFR § 423.100).
•
The LTC service elements, except for drug cost, are
legitimate costs to reflect in the dispensing fee.
 KEY POINT
•
Specialized drug administration services provided after
drugs are dispensed and delivered from the LTC pharmacy,
are NOT covered by the Part D benefit;
•
This means IV pumps and supplies are NOT paid for by Part
D and not covered under Part B the LTC Pharmacy or SNF
must pay; may be covered by some state Medicaid wraparound
CMS Long Term Care Guidance. March 16, 2005
LTC Pharmacy Chains
•Top 3 LTC Pharmacy Providers service nearly 2/3 of market
•Smaller Pharmacies are supplied by LTC GPOs
- MHA, GeriMed, Innovatix
14
12
Omnicare /
Neighborcare
10
Beds
Serviced
in 100,000
8
6
4
2
Other
PharMerica
Kindred
0
Source: IMS and Company web-sites
PDPs and LTC Pharmacy Network
Strategies to Effectively build a LTC Pharmacy Network
• Look to the 3 large chains and 3 LTC GPOs
Strategies to build an Effective LTC Pharmacy Network,
especially MAPDs and SNPs
Look to LTC Pharmacy Providers that can assist with:
- Formulary compliance communications
- Provider education
- Call enters and E-fax capabilities
- Implement Blanket Authorization
- Utilize LTC Consultant Pharmacist but monitor patient
outcomes
The First 100 Days:
Implementation Challenges
Not without problems…..
January 1 – D-Day! - LTC Experience
• Week 1: E1 queries returning info on 30-50%
• Means 50% to 70% of Rxs PENDING
• DE claims returning with deductibles and co-pays
• PDPs/ MAPDs not recognizing
• Beneficiary or Pharmacy
• WellPoint emergency POS enrollment used
broadly
• Retail: some duals leaving pharmacy without
meds
• LTC: all meds must be delivered; pharmacy on the
hook financially
Used with permission PharMerica & Beverly, 2006
Inquiry Volumes to E1 System
Source: Testimony of CMS Administrator McClellan to the
Senate Finance Committee, February 8, 2006.
February 28th - 60 Days
• E1 queries responses up to about 90% to 95%
• Means 5% - 10% of Rxs Pending
• Most state Medicaids covering excluded meds,
some non-formulary, and duals without an
identifiable plan so 5% of these paid
• Some Plans not providing CMS recommended
transition (14 to 30 days) and Part D (B) meds
coverage for SNFs
• Plans inconsistent in use of patient locator codes
(identifying the LTC) results in inappropriately
charged deductibles, co-pays and B/D coverage
• LTC pharmacies still dispensing some meds with
still no identified payor
April 10th - 100 Days
• CMS recommended initial transition period over March
31st
• CMS reiterated to continue 30 day transition period
• E1 queries responses still about 90% to 95%
• 6 states identified as continuing coverage for excluded
meds, some non-formulary, & duals without identifiable plan
• Pharmacies completing Prior Authorization and Appeal
forms for physicians – sending to MDs for additional
information and signature
• 15% of forms completed and submitted by physicians
• Rather are defaulting to formulary meds
• Physician’s complaint – even if sub-optimal therapy they get
no reimbursement for management of pharmacotherapy
Med D Formularies
Full impact of formularies not yet known; what
we know now:
• Some entire classes of drugs require Prior
Authorization (PA) or other administrative burden
- E.g. Influenza, Alzheimer's, & injectable meds
- IN LTC, Physician and medical records separated
• PDPs/ MAPDs all differ in processes, notices &
forms
• Some formularies “promote” less expensive but
potentially inappropriate generic or “Beers List”
meds
Rebates To LTC Pharmacies
• CMS issued Q&A in November 2005
• Felt rebates to LTC pharmacies contrary to spirit
of Medicare law requiring management of
formularies by plans
• Driving to higher tiered products because of
rebates could raise overall price of Rx benefit
• Model is to report ALL price concessions in plans’
bid, including LTC
• Referred to concern about anti-kickback statute
• Issue likely to be considered further in 2006
Source: CMS Part D Q&A #6326 & 6688 on CMS/ rebates/ LTC
pharmacies, Nov. 28, 2005 & Feb. 13, 2006; LTCPA to CMS
on rebate disclosure, Dec. 5, 2005.
Implementation Challenges in LTC
• Cleaning up the duals mess pronto
o
Payer/ state/ CMS reconciliations will take months
• Preparing for the next “tsunamis”
• Coverage gap for non-duals – receiving payment
• Managing operational effects of lock-in
o Does not apply to LTC due to SEPs but does allpy to
ALF
• LTC pharmacy and home infusion B vs D –
coverage mess to figure out
• For MAPDs/ SNPs: mastering risk adjustment
before 2007
What Lies Ahead
2007 to USP Formulary Model :
LTC Implications
• Restructures therapeutic category and classes;
total number changed from 146 to 133 (-13)
• Two “anti-dementia” classes combined into one- could
restrict access to appropriate meds
• Two classes have two different MOAs
• Expansion of GI agents to ensure access to
medications with differing MOAs
2007 Strategic Considerations - LTC
• Sponsors will be facing end of aggregate
reinsurance
• Sponsors will be ratcheting-up control
mechanisms due to decreased risk share
• Step Therapy, Prior Authorization, Quantity Limits,
Strict Formularies
• Will evidence-based practices dictate
preferred drugs or tier placement in a
therapeutic class?
• Administrative burden on MDs for PAs &
Appeals;  role for LTC pharmacies
limited by legislation
LTC Resident Part D Assistance Act
Sponsored by Sen. Chuck Schumer (D-NY)
Provides additional protections for LTC
beneficiaries
• Requires dedicated phone line at plans for LTC staff
• Permits “facilitated” enrollment into plans rather than
auto-assignment
• Reimburses LTC facilities for costs incurred for
prescription coverage, enrollment assistance, and
appeals process
Convergence of Health Policies
Create Opportunities for MA- SNPs
Lock-In
Exemptions
MedicaidManaged
Care
SNPs
Risk
Adjustment
Special Needs Plans:
Sub-set or MA PDs
1. Chronic Care
2. Dual Eligibles
Part D 3. Institutionalized
Auto-Enroll
of Duals
2007 Strategic Considerations - Plans
• Movement into Special Needs Plans (SNPs)
• Plans getting 100% Risk Adjustment will be
marketing to increase enrollment
• SNP-eligibles – have no lock-out period, can
change plans anytime
• Medicaid reforms will move A/B/D
populations to mandatory managed care
plans;
• Managed LTC may become popular
Looking Forward for Plans
• Market Pressures
• “Roadkill” and consolidation inevitable
• Moving system toward “value-based”
program
• Better data on outcomes and quality
• Pay for performance -- quality indicators
• Integrating true disease management and
MTMP
• Plan education to direct prescriber decisionmaking
• Required investment in e-prescribing
Conclusions
• Tectonic shift and major challenges for LTC and
PBMs in particular
• Trends to continue, intensify in 2007
• “Road-kill” expected in the Plan market as plans begins
to consolidate even as late entrants join
• Unexpected “road-kill” possible in the LTC Pharmacy
market – depending on payments for non-covered meds
• Migration from PDPs  MA-PDs  SNPs for many duals
• LTC facility providers interested in implementing
LTC-SNP model as demonstrated by Evercare;
probable 2008 before plans in place
How to Reach Us
Gorman Health Group, LLC
Washington, DC Headquarters
(202) 364-8283
Laurie P. Forrester, PharmD
214-987-2002
[email protected]
Competitive Landscape:
PDPs 2006
Region
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
States
ME, NH
CT, MA, RI, VT
NY
NJ
DE, DC, MD
PA, WV
VA
NC
SC
GA
FL
AL, TN
MI
OH
IN, KY
WI
IL
MO
AR
MS
LA
TX
OK
KS
Medicare
Eligibles
431,000
1,808,000
2,856,000
1,259,000
914,000
2,532,000
1,006,000
1,292,000
657,000
1,050,000
3,095,000
1,702,000
1,519,000
1,794,000
1,614,000
844,000
1,733,000
930,000
480,000
467,000
659,000
2,579,000
551,000
408,000
IA, MN, MT,
NE, ND, SD,
WY
1,929,000
NM
271,000
CO
531,000
AZ
800,000
NV
303,000
OR, WA
1,380,000
ID, UT
433,000
CA
4,334,000
HI
186,000
AK
53,000
Source: CMS,Lehman Brothers
Duals
83,000
377,000
628,000
145,000
110,000
296,000
98,000
235,000
129,000
172,000
401,000
338,000
197,000
152,000
240,000
93,000
160,000
144,000
84,000
146,000
103,000
420,000
71,000
44,000
Total MA
1,102
241,554
549,040
96,348
92,290
528,657
2,648
68,432
424
55,971
603,729
154,055
21,407
237,331
79,027
41,146
67,301
136,172
554
20
73,664
221,212
42,337
2,319
Employer
Covered
90,510
379,680
599,760
264,390
191,940
531,720
211,260
271,320
137,970
220,500
649,950
357,420
318,990
376,740
338,940
177,240
363,930
195,300
100,800
98,070
138,390
541,590
115,710
85,680
242,000
143,324
405,090
35,000
42,351
56,910
60,000
139,580
111,510
82,000
209,918
168,000
20,000
85,726
63,630
165,000
322,063
289,800
31,000
47,539
90,930
932,000
1,420,867
910,140
24,000
28,163
39,060
12,000
0
11,130
and GHG Estimates, 10/05
Estimated
Non-Duals
256,388
809,766
1,079,200
753,262
519,770
1,175,623
694,092
717,248
389,606
601,529
1,440,321
852,525
981,603
1,027,929
956,033
532,614
1,141,769
454,528
294,646
222,910
343,946
1,396,198
321,953
276,001
PDPs
16
17
20
17
18
19
16
16
18
18
18
16
17
17
16
17
16
15
15
15
16
20
16
15
1,138,586
136,739
219,910
340,082
133,644
603,137
263,531
1,070,993
94,777
29,870
18
17
17
18
17
20
18
18
12
11
Impact of Dual Assignments on PDPs
Region
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
States
ME, NH
CT, MA, RI, VT
NY
NJ
DE, DC, MD
PA, WV
VA
NC
SC
GA
FL
AL, TN
MI
OH
IN, KY
WI
IL
MO
AR
MS
LA
TX
OK
KS
Duals
83,000
377,000
628,000
145,000
110,000
296,000
98,000
235,000
129,000
172,000
401,000
338,000
197,000
152,000
240,000
93,000
160,000
144,000
84,000
146,000
103,000
420,000
71,000
44,000
25
26
27
28
29
30
31
32
33
34
IA, MN, MT, NE,
ND, SD, WY
NM
CO
AZ
NV
OR, WA
ID, UT
CA
HI
AK
242,000
35,000
60,000
82,000
20,000
165,000
31,000
932,000
24,000
12,000
Plans with
Average
Average
Auto-Assign MarketShare Membership
12
8.3%
6,917
9
11.1%
41,889
11
9.1%
57,091
10
10.0%
14,500
14
7.1%
7,857
14
7.1%
21,143
14
7.1%
7,000
11
9.1%
21,364
14
7.1%
9,214
13
7.7%
13,231
6
16.7%
66,833
8
12.5%
42,250
13
7.7%
15,154
9
11.1%
16,889
12
8.3%
20,000
13
7.7%
7,154
12
8.3%
13,333
9
11.1%
16,000
12
8.3%
7,000
11
9.1%
13,273
10
10.0%
10,300
14
7.1%
30,000
10
10.0%
7,100
10
10.0%
4,400
11
8
10
7
12
12
8
7
7
5
9.1%
12.5%
10.0%
14.3%
8.3%
8.3%
12.5%
14.3%
14.3%
20.0%
Source: Lehman Brothers and GHG Analysis, September 2005.
22,000
4,375
6,000
11,714
1,667
13,750
3,875
133,143
3,429
2,400
Estimated
PMPM
$130.17
$124.35
$123.91
$125.45
$127.54
$126.67
$128.50
$130.38
$128.96
$127.23
$123.15
$126.41
$127.30
$124.77
$129.77
$125.35
$125.68
$125.45
$129.53
$130.47
$128.22
$125.76
$129.21
$127.52
Potential Avg.
Monthly Revenue
$10,804,110
$62,506,600
$84,889,615
$21,828,300
$12,025,200
$32,137,989
$10,794,000
$33,424,691
$14,259,291
$20,200,209
$98,766,300
$64,089,870
$23,149,015
$25,286,720
$31,144,800
$10,760,815
$20,108,800
$24,086,400
$10,880,520
$20,780,313
$15,847,992
$45,273,600
$11,008,692
$6,733,056
$127.19
$120.03
$123.00
$118.70
$117.54
$124.68
$127.70
$117.33
$121.52
$128.74
$33,578,160
$6,301,575
$8,856,000
$16,685,829
$2,350,800
$20,572,200
$5,938,050
$187,459,817
$4,999,680
$3,707,712