Community Oncology Practices Struggle to Cope With the Extra Requirements of Medicare Part D

April 1, 2006

Medicare Part D, the outpatient prescription drug plan that went into effect on January 1, is having a major impact on community oncology practices as they struggle to deal with widespread confusion as well as the extra requirements imposed by the private plans.

WASHINGTON—Medicare Part D, the outpatient prescription drug plan that went into effect on January 1, is having a major impact on community oncology practices as they struggle to deal with widespread confusion as well as the extra requirements imposed by the private plans. "We've all had our Part D nightmares," said Dianne Kube, chief administrative officer for the Community Oncology Alliance, which recently hosted its first annual Community Oncology Conference.

Confusion over the new drug benefit on the part of Medicare beneficiaries has been well publicized in the lay press.

Established by the Medicare Modernization Act of 2003, Part D offers prescription drug coverage through a bewildering array of drug plans, provided through private health insurers.

But patient confusion is only the tip of the Part D iceberg. Part D is also making it harder for patients to obtain certain oncology drugs, impeding the off-label use of drugs, curtailing patient assistance programs, and greatly increasing the work load of oncology office staff, said Mary Kruczynski, practice administrator at Medical Oncology Hematology Associates, Philadelphia.

Restrictive Formularies

For oncology practices, one of the major effects of Part D has been to limit the drugs that patients can get under various plans. Virtually all the plans have restrictive and controlled formularies, Ms. Kruczynski told conference attendees, and many have step requirements, mandating that a patient try one drug before being prescribed another.

Translated into practice, this has meant, for example, that a patient who had been on tamoxifen for 3 years to prevent a recurrence of breast cancer was turned down by her Part D plan when she tried to renew the prescription. As a result, Ms. Kruczynski said, office staff had to institute an appeal process, and the patient had to go without the medication for a number of days or pay out of pocket.

The new system is also rife with confusion when it comes to oral and injected drugs that are given in the physician's office, such as Aranesp (darbepoetin alfa), Procrit (epoetin afla), Sandostatin (octreotide), and others. Although they are listed in the Part D formularies, these drugs are still covered by Medicare Part B, which covers outpatient costs. However, many managed care plans are telling physician offices that patients need to purchase the drugs through part D for patients to administer themselves.

"The information they are giving you is wrong," Ms. Kruczynski said. "Drugs that were given in the Part B setting . . . continue to be able to be given under Part B."

Off-label use of drugs, common in oncology, is also affected by Part D. Under the new law, off-label use is covered in the same way it is covered by Medicaid, and Medicaid recognizes only compendia, not the peer-reviewed literature, in determining whether off-label use will be covered. As a result, "you're not going to be able to do a lot of things [off-label] with these formularies," Ms. Kruczynski said. Physicians who want to prescribe off-label use must now go through an appeal process, writing letters and sending supporting evidence.

Part D Costs

Part D plans are having an impact on how much patients pay for cancer drugs, but ironically the impact has not always been favorable. The patient assistance programs that many pharmaceutical companies previously offered were initially suspended when Part D went into effect. In response to criticism from professional and advocacy groups, Ms. Kruczynski said, Medicare issued change ID6153 recognizing the pharmaceutical assistance programs as a needed benefit for a small segment of the population requiring product assistance even with Part D, and consequently some drug companies are reinstituting their assistance plans.

Part D plans themselves require a hefty out-of-pocket expenditure—up to $3,984 a year for the cheapest plans—including copays and monthly premiums. With cancer drugs, that level can be reached very quickly, Ms. Kruczynski said, and with the average social security benefit at just $12,000 a year, drugs under Part D can consume a large proportion of a retiree's income.

The Centers for Medicare & Medicaid Services (CMS) is offering help for patients with limited resources, including those whose income is less than 150% of the federal poverty level and who have limited savings. But patients have been slow to take advantage of this benefit.

"A lot of our senior citizens do qualify for extra help, but they don't know it. Many got a letter and a form from the Social Security Administration, but they ignored it," Ms. Kruczynski said. She added that she keeps a supply of letters and forms in her office and hands them out "almost every day."

Practices Bear the Burden

The impact of Part D on the day-to-day work in oncology practice is not trivial, she said. Office resources are now consumed in helping patients sort through the complexities of Part D, preauthorizing drugs, doing the extra paperwork for the specialty pharmacies that some companies have established, and conducting appeals when a plan refuses to cover a drug.

"We are being asked to do a phenomenal amount of work for zero pay [from insurance companies]. . . . We are actually enforcing the policies of private insurance companies who are making billions of dollars on insurance plans, and we are getting nothing," Ms. Kruczynski said.

Advice for Practices

What advice is there for oncology practices struggling with Part D requirements? To begin with, familiarize your staff with Part D and know how to identify the drug benefits, Ms. Kruczynski said. She strongly advised downloading a plan's formulary—all are available on their websites—when a patient gets a prescription, so it will be clear from the beginning whether a special appeal will be necessary.

Also, be aware of tiered pricing, she advised, and prescribe the less expensive drug if possible.

Resources online

Finally, Ms. Kruczynski noted, a variety of resources are online, including forms to help pharmacies communicate with physician offices, contacts for the plans, and CMS contacts to report problems with prescription drug coverage and problems specific to Medicare beneficiaries who are unable to get their drugs (see Table).