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Medicare Part D and FEHBP: Drug Selection Guidance for Clinicians
Jill Augustine, PharmD, MPH; and Annesha Lovett, PhD, MS, PharmD
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Linnette Yen,† MS, MA; Tara K. Knight, PhD; Gunjan Sharma, MBA; Michael B. Nichol, PhD; John D. McDermott, Jr, MBA; and Paul Hodgkins, PhD

Medicare Part D and FEHBP: Drug Selection Guidance for Clinicians

Jill Augustine, PharmD, MPH; and Annesha Lovett, PhD, MS, PharmD
Medicare Part D and the Federal Employees Health Benefits Program drug plans provide wide coverage of the top 10 therapeutic classes of drugs.
Background: Currently, there are more than 1000 Medicare Part D plans and more than 400 Federal Employees Health Benefi ts Program (FEHBP) plans representing more than 30 million people. The extent to which formularies vary among Medicare Part D and FEHBP plans regarding drug coverage, copayment, and coinsurance is unknown. Formulary variation among plans might make it diffi cult for physicians to determine which drugs are covered.

Objectives: To identify which medications are widely covered by the majority of plans within each of 10 therapeutic classes.

Study Design: A cross-sectional study design was used with data obtained from the Centers for Medicare & Medicaid Services, the Office of Personnel Management, and various health plan websites.

Methods: The data were entered into SPSS 17.0, and descriptive statistics and independent sample t tests were conducted to determine the difference among plans. Wide coverage was defi ned as a medication that was covered by >85% of formularies with a copayment of <$35.

Results: Findings revealed that both programs provide wide coverage of the top 10 therapeutic classes of drugs dispensed and sold in the United States, with the exception of Medicare Part D plans’ coverage of anxiolytics. For all 10 classes, generic medication coverage was greater for FEHBP plans than for Medicare Part D plans. Copayments were similar among all plans. However, the percentage of coinsurance was higher for the FEHBP plans (P <.05).

Conclusions: Identifi cation of widely covered drugs lowers the risk of benefi ciaries inadvertently being prescribed noncovered or higher cost–sharing medications.

(Am J Pharm Benefits. 2013;5(1):e1-e7)
The extent to which formularies vary among Medicare Part D and theFederal Employees Health Benefits Program (FEHBP) plans in regard to drug coverage, copayment, and coinsurance was investigated.

  • Both programs provide wide coverage of the top 10 therapeutic classes of drugs dispensed and sold in the United States, with the exception of Medicare Part D plans’ coverage of anxiolytics.

  •  For all 10 classes, generic medication coverage was greater in the FEHBP plans than in the Medicare Part D plans.

  •  The percentage of coinsurance was higher in the FEHBP plans.
Each year, millions of United States citizens become eligible for Medicare services. It is estimated that by 2030, 79 million Americans will be over the age of 65 years.1 That means that more patients will be taking prescription medications to aid with disease-state management. Patients over age 65 years are eligible to enroll in Medicare Part D insurance plans and to choose from a list of numerous health insurance plans, each having its own unique formulary (ie, a list of medications that are covered under a health insurance plan’s prescription drug benefi t). Most formularies are considered tiered formularies, where the medications are available at different levels of copayment or coinsurance to direct patients and physicians to receive more cost-effective medications as deemed by health insurance plans.2 The large number of different plans allows for wide variations in plan formularies, which results in barriers for patients and physicians alike.3

For 2011, more than 1500 Medicare Part D prescription drug plans were offered across the United States, representing many formularies.1 Due to formulary variations, physicians find it difficult to determine which medications to prescribe. Several studies have shown that physicians are unfamiliar with the majority of patients’ formularies, which leads to diffi culty in prescribing medications that are “preferred.” 2,4,5 A preferred medication is one that is selected for inclusion on a plan formulary because of its effectiveness and cost. To discourage use, nonpreferred drugs are offered at higher copayment or coinsurance rates, meaning consumers must pay a higher out-of-pocket amount if they want to purchase a nonpreferred drug. It should be noted that there are differences between Medicare Part D formularies and commercial formularies. Medicare Part D plans have a set coinsurance percentage for all medications (formulary or nonformulary) based on their coverage phase. This may affect the amount of copayment or coinsurance offered to benefi ciaries. It should be noted that Medicare Part D plans have considerable flexibility around the cost-sharing requirements (ie, deductible levels, copayments and/or coinsurance by tier) as long as they meet the actuarial equivalence tests.

Physicians have stated that the wide variation among formularies also has a negative effect on the quality and efficiency of medical care.6 Authors note that medication adherence was greater in patients who received generic or preferred prescriptions compared with nonpreferred medications.7 Other studies have demonstrated that patient compliance decreased when medication copayments were even slightly increased.8-12 By providing medications at lower copayments that are fully covered or preferred on formularies, patients should have improved medication compliance, disease-state management, and overall health.

The Medicare Part D program provides prescription drug coverage for more than 25 million enrollees, while the largest employer-sponsored program in the world, the Federal Employees Health Benefits Program (FEHBP), provides coverage for an additional 9 million enrollees. Few studies have been published comparing the drugs covered by FEHBP plans with the drugs covered by Medicare Part D plans. Previous research provided an examination of specific drugs covered under Medicare Part D, but the study only explored coverage in 2 states, California and Hawaii.3 In this study we examine Medicare Part D and FEHBP plans’ drug coverage across all states to offer information that could substantially reduce physician administrative burden and lower the risk of beneficiaries being inadvertently prescribed noncovered or higher cost-sharing drugs.

The objective of this study was to compare Medicare Part D and the FEHBP formularies on the coverage, copayment, and coinsurance of medications within each of 10 therapeutic classes.

METHODS

January 2009 data were obtained from the Centers for Medicare & Medicaid Services, the Agency for Health Care Administration, the Office of Personnel Management, and various health plan websites.13-15 The initial sample of Medicare Part D stand-alone prescription drug plans and Medicare Advantage plans consisted of approximately 2500 prescription drug plans. Medicare Advantage plans were excluded because separate data about prescription drug coverage were not available. After this exclusion, there remained approximately 1893 stand-alone prescription drug plans. Examination of the Medicare Part D prescription drug data revealed that multiple plans had the same formulary. Therefore, the plans were collapsed by formulary and ranked in order of total enrollment. Formularies were included in the sample if enrollment was greater than or equal to 0.5% of total enrollment, yielding a final study sample of 19 formularies, covering 63% of total enrollment. These 19 formularies represented 232 stand-alone prescription drug plans (Table 1). When enrollment was less than 0.5% of total enrollment, the enrollment numbers became very small and it was more likely that the characteristics of those smaller plans were not the norm. The organizations with low enrollment may have faced adverse selection concerns and decreased ability to negotiate low drug prices.

The initial sample of the FEHBP prescription drug plans consisted of 222 prescription drug plans. The plans were ranked in terms of total enrollment, and plans representing 70% of total enrollment were selected for the study, resulting in a total of 5 prescription drug plans. These 5 plans represented 5 unique formularies.

The therapeutic class, defined as groups of drugs that are similar in chemistry, method of action, and purpose of use, was determined and entered manually using the US Pharmacopeia Drug Classification System.16

Prior to the development of data sets, comparison of Medicare and the FEHBP programs revealed the need for an appropriate benchmark. After reviewing the literature, IMS Health Data was chosen to obtain a list of the top 200 drugs most commonly used by dispensed prescriptions and the top 200 most commonly used drugs by sales in the United States.17 For instances where the drug name was found on both lists (ie, by dispensed prescriptions and by sales) the drug name was only listed once.

This process yielded a final list of 266 drugs (ie, 134 duplicates out of 400 top drugs were deleted), representing a total of 23 therapeutic classes. This list was further verified through literature review to ensure that these drugs represented at least 75% of all Medicare expenditures.18-21 The analysis focused on the top 10 therapeutic classes in the United States as defined by utilization sales and number of prescriptions dispensed, which yielded a final study drug list of 131 medications. These 131 drugs are referred to as “top drugs” in this study.

Additional data were retrieved to examine copayment and coinsurance amounts. Tier 1 and tier 2 medications were defined as preferred generic and preferred brand name medications, respectively. “Widely covered” was defined as a medication that was covered by 85% or more of formularies with a copayment of $35 or less.3,7,8,22 The definition of widely covered was based on research conducted by Tseng and colleagues.3

The data were entered into SPSS version 17.0 (SPSS Inc, Chicago, Illinois). Descriptive statistics and independent sample t tests were conducted to examine the differences between Medicare Part D and FEHBP prescription drug plans.

RESULTS

Our analysis included a total of 237 prescription drug plans representing 24 formularies and 10 therapeutic classes. These plans provided prescription drug coverage to more than 21 million enrollees in 2009. Drugs that were covered by 85% or more of formularies with a copayment of $35 or less are listed in Table 2.

Widely Covered Medications

Of the 24 formularies included (19 Medicare Part D and 5 FEHBP), all formularies covered at least 1 medication in each therapeutic class, with the exception of Medicare Part D coverage of anxiolytics (ie, clonazepam, diazepam, lorazepam). None of the 19 Medicare Part D formularies covered any of the anxiolytic products. When examining the top 10 therapeutic classes of drugs that were dispensed and sold in the United States, all 5 FEHBP formularies covered 85% or more of the drugs examined in this study. However, only 9 out of 19 Medicare Part D formularies covered 85% or more of the drugs examined in this study. Specifically, the 9 Medicare Part D formularies covered 89% of the 131 medications listed by therapeutic class, while FEHBP covered an average of 94% of medications (P = .16) (Table 3).

Coverage of Brand and Generic Medications

In the analysis of brand name drug versus generic drug coverage, it was first determined which formularies among the Medicare Part D and the FEHBP plans provided wide coverage. A total of 9 out of 19 Medicare Part D formularies and 5 out of 5 FEHBP formularies provided wide coverage. Further examination of these plans revealed that there were no statistically significant differences in the coverage of brand name medications between Medicare Part D and FEHBP (P = .11) (Table 4). On the other hand, when examining widely covered generic medications, there was a statistically significant difference between Medicare Part D and FEHBP (P <.001) (Table 4). Examination of the generic medications showed that an average of 90% were covered by Medicare Part D formularies compared with an average of 98% by the FEHBP formularies.



Copayment and Coinsurance


Findings revealed that the average tier 1 generic drug copayment for Medicare Part D formularies was $6.25, while the verage for FEHBP formularies was $7.67. Furthermore, the average copayment for tier 2 brand name drugs was $34.55 for Medicare Part D and $35.00 for FEHBP (Table 5). Overall, the analysis showed there were no statistically significant differences in the copayments for Medicare Part D compared with FEHBP for tier 1 (P =.19) or tier 2 (P = .47) medications.

However, there was a statistically significant difference in the average coinsurance between the Medicare Part D and FEHBP formularies for both tier 1 (P <.001) and tier 2 (P = .046) medications. Examination of tier 1 drugs revealed the average coinsurance was 15% for Medicare Part D and 20% for FEHBP. For tier 2 drugs the average coinsurance was 25% for Medicare Part D and 34% for FEHBP (Table 5).

Limitations

 
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