The United States Department of Health and Human Services Office of Inspector General (HHS OIG) recently issued its annual report covering Part D plans, and whether they include drugs commonly used by dual eligibles. Under the Patient Protection and Affordable Care Act (PPACA), HHS OIG is required to conduct an annual study to examine the extent to which formularies used by Medicare Part D plans include drugs that are commonly used by full benefit dual eligible individuals (those who are eligible for both Medicare and full Medicaid benefits), who generally get drug coverage through Medicare Part D.
HHS OIG notes that dual eligibles tend to be a particularly vulnerable population as most dual eligibles have very low incomes—86 percent have annual incomes below 150 percent of the Federal poverty level. Additionally, dual eligibles are often in worse health than the average Medicare beneficiary—half are in “fair” or “poor” health, more than double the rate of other Medicare beneficiaries.
Methodology
For the 2021 report, OIG determined whether the unique formularies used by the 5,128 Part D plans operating in 2021 cover the 200 drugs most commonly used by dual eligibles. To create the list of 200 drugs, HHS OIG used the 2018 Medicare Current Beneficiary Survey (the most recent data available). Of the top 200 drugs, 195 are eligible for Part D prescription drug coverage, 2 are excluded from coverage, 1 is no longer offered as a prescription, and 1 is a medical supply item covered by Part D. The final drug is eligible for Part D coverage but is excluded from the analysis because HHS OIG could not “confidently project” the use of the drug to the entire dual-eligible population.
Report Findings
OIG found that the rate of Part D plan formularies’ inclusion of the 195 drugs that are commonly used by dual eligibles is significant, but with some variation. For example, Part D plan formularies include 97% of the 195 commonly used drugs (on average) and 74% of the commonly used drugs are included by all Part D plan formularies. This has not changed much since the initial report in 2011. The range of inclusion rates remained the same from 2020 and 2021; inclusion rates ranged from 89 to 100 percent in both 2020 and 2021.
OIG also examined the utilization management tools that Part D plan formularies apply to the drugs commonly used by dual eligibles. In 2021, OIG found that the percentage of drugs to which plan formularies applied utilization management tools was largely unchanged between 2020 and 2021 at 29%.
Conclusion and Recommendations
OIG concluded that inclusion rates for the 195 drugs that are commonly used by dual eligibles are mostly unchanged from the inclusion rates in the prior reports, with Part D formularies including roughly the same high percentage of the commonly used drugs in 2021 as they did in 2020. OIG noted that because some variation does exist in the formularies’ inclusion and utilization management of these drugs, some dual eligibles may need to take additional steps (such as appealing coverage decisions) to access the drugs they are prescribed.
While OIG did not make any recommendations at this time, it will continue to monitor and produce annual reports on the extent to which Part D plan formularies cover commonly used drugs by dual eligibles.