Medicare Drug Benefit ... The ABCDs

J Clin Pathways. 2021;5(8):16-17. doi:10.25270/jcp.2021.10.4

Medicare provides a drug benefit under each of the current Medicare Parts. Medicare Part A providing drug coverage of part of a hospital, skilled nursing facility–short-term, or hospice stay. Part D is used most often for outpatient oral medications, while Part B covers physician administered infused medications. Part C is the managed care benefit that provides coverage for Parts A, B, and D through a single managed care organization. In most situations, the coverage is well defined; however, when it comes to Part B and Part D, which benefit applies can be subject to how a treatment is positioned. Part B coverage by Medicare is for medications, in their most basic form, that are either physician administration or require durable medical equipment (DME) for administration (Table 1).

Since Medicare began 50 years ago, pharmaceutical delivery has become more sophisticated and innovative, which has shifted some medications from Part D to Part B due to the need for physician administration.¹

The Medicare benefit currently affords the greatest opportunity for use under Medicare Part B, especially for the >30% of beneficiaries with Medigap. This is because Medicare Part B currently requires no pre-use authorization. Instead, use management is done retrospectively to identify issues of potential fraud and abuse. Medicare could perform a national coverage determination or local coverage determination. This combination of Medicare benefit and secondary insurance results in no authorization requirements and no patient barriers, as they have no out-of-pocket (OOP) expenses (Table 2).

Obtaining coverage under Medicare Part B can take some work. This starts with the method of which the medication is delivered, especially for subcutaneous medications that could be self-administered. This requirement can be justified in the design of the clinical studies and the device design itself as companies can position themselves under Part D or B based on which is most beneficial for their targets in terms patients, providers, and price.

Because Medicare Part D did not become available until 2006, at the time Medicare was introduced in 1965, Part B was the only benefit for drug coverage. As the only Medicare drug coverage, Part B covered oncology treatments and several of the vaccines available at the time. Because of the coverage for oncology treatments and no other drug benefit, Medicare made special rules to cover additional cancer treatments. This includes coverage of some oral cancer drugs if the same drug is available in injectable form or is a prodrug of the injectable drug. Also oral antinausea drugs, Medicare coverage includes oral antinausea drugs used as part of an anticancer chemotherapeutic regimen. The drugs must be administered immediately before, at, or within 48 hours after chemotherapy, and must be used as a full therapeutic replacement for an intravenous antinausea drug.

Durable Medical Equipment

Beyond cancer treatments, Medicare also provided coverage under Part B for treatments administered via DME. This includes insulin pumps worn outside the body (external) and the insulin used with the pump. However, if the equipment is not DME or can only be used with that specific product rather than many than Medicare does not cover under Part B. An example of this is Sunovion’s Brovana (Arformoterol tartrate), which requires a device; however, the Brovana device only can be used with Brovana. As such, it does not meet the qualifications of a DME and is instead considered a Medicare Part D benefit rather than Medicare Part B, which requires a DME for delivery.

Physician Administered

Medicare looks to the US Food and Drug Administration for determination if a treatment requires physician administration. Such is the case with Amgen’s Xgeva (denosumab). Clinical studies for denosumab were designed to require physician administration for this subcutaneous injection. Because this is indicated for the prevention of skeletal-related events in patients with multiple myeloma and in patients with bone metastases from solid tumors, it is primarily used by oncologists. Because oncologists are well familiar with Medicare Part B Buy&Bill, the use would be more favored under Part B as opposed to Part D if considered self-administered.

Future Medicare Design

Medicare continues to change by reducing a beneficiary’s OOP costs while assuring access to medically necessary treatments. Such coverage under Medicare Part D Prescription Drug Plans (PDP), whose incentive is to reduce medication cost through tight use controls and high OOP, may not produce the best clinical or financial results. Shifting from Medicare Part D PDPs toward either Medicare Part C/Medicare Advantage Plans that focus is on reduction of total cost of care, or even Medicare Part B, which is solely clinically focused, may produce better outcomes. One thing is certain; Medicare and its key stakeholders will continue to evolve.

References

1. US Department of Health and Human Services. Information partners can use on: drug coverage under different parts of Medicare. Accessed October 4, 2021. https://www.cms.gov/outreach-and-education/outreach/partnerships/downloads/11315-p.pdf

2. Freed F, Damico A, Neuman T. A dozen facts about Medicare Advantage in 2020. Kaiser Family Foundation website. Accessed October 4, 2021. https://www.kff.org/medicare/issue-brief/a-dozen-facts-about-medicare-advantage-in-2020/#:~:text=1.,doubled%20over%20the%20past%20decade&text=In%202020%2C%20nearly%20four%20in,time%20since%20the%20early%202000s

3. America’s Health Insurance Plans. State of Medigap 2019. Accessed October 4, 2021. https://www.ahip.org/wp-content/uploads/IB_StateofMedigap2019.pdf

4. Anderson A. How Medicaid supports 1 in 5 Medicare enrollees. Medicareresources.org. Published August 26, 2021. Accessed October 4, 2021. https://www.medicareresources.org/medicare-benefits/how-medicaid-supports-1-in-5-medicare-enrollees/#:~:text=In%202018%2C%20an%20estimated%2012.2,eligible%20beneficiaries%20or%20dual%2Deligibles

5. Kaiser Family Foundation. Medicare Part D beneficiaries who reach the catastrophic coverage limit can expect to pay more out-of-pocket for their prescription drugs next year. Published October 11, 2019. Accessed October 4, 2021. https://www.kff.org/medicare/press-release/medicare-part-d-beneficiaries-who-reach-the-catastrophic-coverage-limit-can-expect-to-pay-more-out-of-pocket-for-their-prescription-drugs-next-year/

Author Information

Author: Richard G. Stefanacci, DO, MGH, MBA, AGSF, CMD

Affiliation: EVERSANA™, Berkeley Heights, NJ

Disclosures: Dr Stefanacci is the chief medical director for the managed markets agency of EVERSANA™.