Medicare Prescription Drug Improvement Research Articles

Do Wise Choices Translate Into Cost Savings and Improved Outcomes?

Do Wise Choices Translate Into Cost Savings and Improved Outcomes?

High-deductible health plans.

High-deductible health plans (HDHPs) are insurance policies with higher deductibles than conventional plans. The Medicare Prescription Drug Improvement and Modernization Act of 2003 linked many HDHPs with tax-advantaged spending accounts. The 2010 Patient Protection and Affordable Care Act continues to provide for HDHPs in its lower-level plans on the health insurance marketplace and provides for them in employer-offered plans. HDHPs decrease the premium cost of insurance policies for purchasers and shift the risk of further payments to the individual subscriber. HDHPs reduce utilization and total medical costs, at least in the short term. Because HDHPs require out-of-pocket payment in the initial stages of care, primary care and other outpatient services as well as elective procedures are the services most affected, whereas higher-cost services in the health care system, incurred after the deductible is met, are unaffected. HDHPs promote adverse selection because healthier and wealthier patients tend to opt out of conventional plans in favor of HDHPs. Because the ill pay more than the healthy under HDHPs, families with children with special health care needs bear an increased cost burden in this model. HDHPs discourage use of nonpreventive primary care and thus are at odds with most recommendations for improving the organization of health care, which focus on strengthening primary care.This policy statement provides background information on HDHPs, discusses the implications for families and pediatric care providers, and suggests courses of action.

Pills, Power, and Policy: The Struggle for Drug Reform in Cold War America and Its Consequences (review)

Reviewed by: Pills, Power, and Policy: The Struggle for Drug Reform in Cold War America and Its Consequences Scott H. Podolsky Dominique A. Tobbell. Pills, Power, and Policy: The Struggle for Drug Reform in Cold War America and Its Consequences. California/Milbank Books on Health and the Public. Berkeley: University of California Press/New York: Milbank Memorial Fund, 2012. xv + 294 pp. $26.95 (978-0-520-27114-2). Today, concerns regarding the incentivizing of the pharmaceutical industry, the affordability of medicines, and the “capture” of the medical profession by industry reverberate throughout both academic and congressional debate. Yet as Dominique Tobbell relates, these are not new concerns. Daniel Carpenter has recently analyzed in detail the means by which the FDA enlarged its scope of regulation throughout the latter half of the twentieth century to become arguably the most important regulatory agency in the world. Yet the federal government could have gone still further. And Tobbell, in this well-researched and skillfully argued volume, explores how the pharmaceutical industry and its allies in the medical profession forestalled still more aggressive reform in the second half of the twentieth century, setting the stage for the ongoing debate and reform efforts of the twenty-first century. The 1938 Federal Food, Drug and Cosmetic Act, as Carpenter has written, mandated that drugs be determined safe prior to their release for interstate sale, necessitating increased investment in the testing of drugs. Expanding upon the work of John Swann and Nicolas Rasmussen, Tobbell begins by examining how the drug industry and academic medicine expanded their mutually beneficial relationships in the post–World War II era partly to meet this need. For an increasingly research-oriented drug industry, relationships with medical schools and their faculty not only provided access to leading scientists but also helped to enable the training of the emerging cadre of “clinical pharmacologists” who could evaluate their products. For academia, industry funding provided the support required by their faculty, independent of government direction or oversight. Such relationships would be put to the test by the end of the 1950s. As concerns regarding the prices of the wonder drugs escalated, the leading research-oriented pharmaceutical firms banded together. They could not, however, fend off Senator Estes Kefauver’s muckraking investigation and congressional hearings into the drug industry beginning in 1959, as lines were drawn between reformers in Congress and academic medicine on the one hand, and the pharmaceutical industry, the American Medical Association, and cultivated allies from academic medicine on the other. Industry and its allies invoked Cold War rhetoric regarding the need for an unshackled wonder-drug-producing industry both for the health of the American people and for a potential worldwide battle against communist pharmaceutical purveyors. And while the Kefauver–Harris Amendments of 1962 mandated the formal proof of drug efficacy and introduced the phased system of drug review existing today, more radical measures attending to patents were successfully kept out of the final bill. The 1962 amendments still entailed a significant expansion of FDA oversight. Yet as Tobbell explains, industry and its academic allies, recognizing the degree to which the FDA’s increased powers seemingly outstripped its personnel, formed [End Page 486] a Commission on Drug Safety as an advisory body to the FDA. The commission evolved into the Drug Research Board (DRB), under the auspices of the National Academy of Sciences–National Research Council, but still well represented by industry representatives and their academic allies. The DRB, from the mid-1960s through the mid-1970s, would serve to counter FDA attempts to control a national drug compendium and blocked federal efforts to mandate the substitution of generic for brand-name drugs (which would instead occur in piecemeal fashion at the state level). Years of alliance building had apparently borne fruit and would again in the Hatch–Waxman Act in 1984 (which extended patent durations even as it supported the expansion of the generic drug industry), the Medicare Prescription Drug Improvement and Modernization Act in 2003, and even the Patient Protection and Affordable Care Act in 2010. My only quibble with Tobbell’s analysis is that notions of medical “capture” by industry run the risk of being overly simplistic (as Tobbell...

PDP or MA-PD? Medicare part D enrollment decisions in CMS Region 25

Background The Medicare Prescription Drug Improvement and Modernization Act of 2003 provides outpatient prescription drug coverage for Medicare beneficiaries through private insurers. This coverage is available through 2 primary venues: stand-alone prescription drug plans (PDPs) and integrated managed care (or Medicare Advantage) plans that also provide prescription drug coverage (MA-PDs). Objectives The first objective was to describe factors associated with Medicare beneficiaries choosing to enroll in any Medicare part D PDP. The second objective was to describe factors associated with the choice of an MA-PD, given enrollment in the part D program. Methods The study used a cross-sectional, survey design. Data were collected from a stratified random sample of 5000 community-dwelling adults, aged 65 years and older in the Center for Medicaid and Medicare Services Region 25. Data were collected by means of a mailed questionnaire. Data analyses included univariate and bivariate descriptive statistics and multivariate probit modeling. Results The overall adjusted response rate was 50.2% (2309 of 4603). Data from 1490 respondents (32.4% of those attempted) were analyzed in this study. Nearly 75% of sample members elected to enroll in one of the Medicare part D coverage options in 2007, with more than 3 times as many choosing a PDP compared with a MA-PD option (57.2% vs 17.8%). A variety of variables including rurality, plan price, perceived future need for medications, and preferences emerged as important predictors of choosing to enroll in any Medicare part D drug plan, whereas rurality, state of residence, and number of diagnosed medical conditions were associated with the decision to enroll in a MA-PD. Conclusions Models of health insurance demand and plan choice applied in this context appear to be modestly effective. Rurality and state of residence were particularly important contributors to both of these decisions, as were a variety of individual characteristics.

Govt. Ups Payments for Medicaid, Adopting Health Technology

Back to table of contents Previous article Next article Professional NewsFull AccessGovt. Ups Payments for Medicaid, Adopting Health TechnologyMark MoranMark MoranSearch for more papers by this authorPublished Online:19 Mar 2010https://doi.org/10.1176/pn.45.6.psychnews_45_6_010AbstractHealth and Human Services (HHS) Secretary Kathleen Sebelius announced last month the availability of federal money to stimulate use of health information technology among physicians and to provide financial relief to struggling state Medicaid programs.The money for both initiatives is made possible by the American Recovery and Reinvestment Act of 2009, according to a statement by HHS.Sebelius announced that the federal government was providing a $4.3 billion increase to states in the federal share of Medicaid costs, referred to as “federal medical assistance percentage payments” (FMAP).The additional money will be used to reduce the amount that states have to pay the federal government under the Medicare Prescription Drug Improvement and Modernization Act to offset the cost of prescription drug coverage for “dual eligibles”—those state residents who qualify for both Medicare and Medicaid. Many such patients are mentally ill.(Prior to enactment of the law, which created the Part D prescription drug program, state Medicaid programs covered prescription drug costs for dual-eligible individuals. Now states must make a “clawback” payment—that is, reimburse the federal government for a portion of the costs of drug coverage assumed by the federal government.)Sebelius said in a written statement that the higher FMAP provided by the recovery act funds results in a temporary reduction of the states' share of spending and therefore in their clawback obligation.“We believe today's action will help states as they struggle to maintain Medicaid and other budget priorities in these difficult economic times,” said Sebelius. “This relief will help states continue to provide critical health care services to the nearly 60 million beneficiaries who depend upon it.”The temporary adjustment in the clawback payments will be applied for the period October 1, 2008, through December 31, 2010.Additionally, Sebelius and Labor Secretary Hilda Solis announced more than $750 million in recovery act awards to help health care providers advance the adoption of health information technology and train workers for the health care jobs of the future.Of the over $760 million investment, $386 million will go to 40 states and qualified State Designated Entities to facilitate health information exchange at the state level, while $375 million will go to support the development of “regional extension centers” to help health professionals implement and use health information technology.“These grant awards, the first of their kind, will help develop our electronic infrastructure and give doctors and other health care providers the support they need as they adopt this powerful technology,” Sebelius said in a statement.More information about the health information technology grants and the State Designated Entities and regional extension centers is posted at <www.hhs.gov/healthit/>. ISSUES NewArchived

Impact of the medicare modernization act of 2003 on utilization and spending for medicare part B–covered biologics in rheumatoid arthritis

To examine changes in utilization and expenditures for infliximab in rheumatoid arthritis (RA) patients associated with the 2 changes implemented by the Medicare Prescription Drug Improvement and Modernization Act (MMA) of 2003, specifically 1) reductions in physician reimbursement for Part B drugs between 2003 and 2005 and 2) availability of alternative RA biologics in 2006. Using 2002-2006 5% Medicare files, nationally representative estimates of infliximab use and expenditures were estimated in annual cross-sectional samples of RA beneficiaries. Infliximab initiation and continuation rates were estimated in 2-year longitudinal cohorts (2005-2006 versus 2002-2003, 2003-2004, and 2004-2005). Total payments (in 2006 dollars) for infliximab increased from $357 million in 2002 to $492 million in 2006. The largest annual increase in infliximab payments occurred in the pre-MMA period from 2002 to 2003, wherein payments per RA patient increased by 31%. From 2003 to 2004, despite the reduction in payments brought by the MMA, there was a 4% increase in total expenditures for infliximab per RA patient driven by an increase in utilization factors. Total payments for infliximab per RA patient actually decreased from 2004 to 2005, when reimbursement was further reduced. Continuation and initiation rates for infliximab use remained unchanged in 2006, as compared with previous years. Infliximab expenditures increased from 2002 to 2006, yet the passage of the MMA was associated with a remarkable slowdown in the rate of increase in expenditures. There was no evidence of significant substitution of infliximab with other biologics made available in 2006.

Medicare reimbursement and the use of biologic agents: Incentives, access, the public good, and optimal care

Medicare reimbursement and the use of biologic agents: Incentives, access, the public good, and optimal care

Using Matched Survey and Administrative Data to Estimate Eligibility for the Medicare Part D Low Income Subsidy Program

This article uses matched survey and administrative data to estimate, as of 2006, the size of the population eligible for the Low-Income Subsidy (LIS), which was designed to provide "extra help" with premiums, deductibles, and copayments for Medicare Part D beneficiaries with low income and limited assets. We employ individual-level data from the Survey of Income and Program Participation and the Health and Retirement Study to cover the potentially LIS-eligible noninstitutionalized and institutionalized populations of all ages. The survey data are matched to Social Security administrative data to improve on potentially error-ridden survey measures of income and program participation. Our baseline estimate, based on the matched data, is that about 12 million individuals were potentially eligible for the LIS as of 2006. A sensitivity analysis indicates that the use of administrative data has a relatively small effect on the estimates, but does suggest that measurement error is important to account for.

Well-Being of Marital Groups in Later Life: Are Divorced Elders Disadvantaged?

ABSTRACT Data from a community assessment of health survey were used to examine economic and health indicators of elderly marital groups (N = 208) residing in North Carolina. The author found divorced elders (1) owned few assets, (2) were likely to be diagnosed with two of the major risk factors for contracting diabetes, (3) had a “fair” to “poor” self-assessed health, and (4) were likely to have sought financial support from family and/or friends to help pay for prescription drugs during the past year. It was concluded that family policy advocates and policymakers should be aware that many divorced elders in poorer health are unable to financially provide for prescription drugs that are needed to manage their chronic health problems. Implications for the 2003 Medicare Prescription Drug Improvement and Modernization Act (Medicare Part D) are discussed.

Biologic drugs for rheumatoid arthritis in the medicare program: A cost‐effectiveness analysis

Since the introduction of the Medicare Prescription Drug Improvement and Modernization Act and its associated demonstration project, coverage of selected biologic drugs has been expanded for Medicare beneficiaries. For rheumatoid arthritis, coverage was extended to etanercept, adalimumab, and anakinra in addition to the previously covered infliximab. We undertook to develop a model to compare the costs and quality-adjusted life years (QALYs) generated by each of the 4 biologic agents. Data were drawn from meta-analysis of randomized controlled trials and from a large longitudinal outcomes databank. Uncertainty was addressed using probabilistic and one-way sensitivity analyses. A lifetime horizon and Medicare viewpoint were adopted. In the base case analysis, anakinra was the least effective and least costly strategy. Etanercept, adalimumab, and infliximab were similar in terms of effectiveness, but infliximab was more costly. If decision makers are willing to pay a maximum of $50,000/QALY, the probability that infliximab is cost-effective is <1%. Findings were robust to a range of sensitivity analyses. Only if the dose of infliximab remains constant over time is this likely to be a cost-effective strategy. Infliximab is unlikely to be cost-effective in the Medicare population compared with either etanercept or adalimumab. Anakinra is substantially less costly but is also less effective than the 3 tumor necrosis factor alpha inhibitors.

Prescription Drug Coverage and Effects on Drug Expenditures among Elderly Medicare Beneficiaries

To identify determinants of drug coverage among elderly Medicare beneficiaries and to investigate the impact of drug coverage on drug expenditures with and without taking selection bias into account. The primary data were from the 2000 Medicare Current Beneficiary Survey (MCBS) Cost and Use file, linked to other data sources at the county or state-level that provided instrumental variables. Community-dwelling elderly Medicare beneficiaries who completed the survey were included in the study (N=7,525). A probit regression to predict the probability of having drug coverage and the effects of drug coverage on drug expenditures was estimated by a two-part model, assuming no correlation across equations. In addition, the discrete factor model estimated choice of drug coverage and expenditures for prescription drugs simultaneously to control for self-selection into drug coverage, allowing for correlation of error terms across equations. Findings indicated that unobservable characteristics leading elderly Medicare beneficiaries to purchase drug coverage also lead them to have higher drug expenditures on conditional use (i.e., adverse selection), while the same unobservable factors do not influence their decisions whether to use any drugs. After controlling for potential selection bias, the probability of any drug use among persons with drug coverage use was 4.5 percent higher than among those without, and drug coverage led to an increase in drug expenditures of $308 among those who used prescription drugs. Given significant adverse selection into drug coverage before the implementation of the Medicare Prescription Drug Improvement and Modernization Act, it is essential that selection effects be monitored as beneficiaries choose whether or not to enroll in this voluntary program.

Our Health Care System at the Crossroads: Single Payer or Market Reform?

Our Health Care System at the Crossroads: Single Payer or Market Reform?

DME Suppliers Face Big Changes Next Year

DME Suppliers Face Big Changes Next Year

The Medicare Prescription Drug Improvement and Modernization Act and the delivery of cancer chemotherapy

Pharmacists' increasing need for assistance in understanding the financial aspects of cancer treatment in physician office-based and hospital outpatient-based cancer programs, and the impact of changes in Medicare reimbursement rates associated with the Medicare Prescription Drug Improvement and Modernization Act (MMA) on providers of cancer chemotherapy and patients are discussed. Most cancer drugs are covered under Medicare Part B, although there is limited coverage under Part D. The financial burden on patients of paying for cancer chemotherapy has increased under both Part B and Part D. Changes in the basis for Medicare reimbursement for chemotherapy have reduced payment rates, and some currently available cancer drugs are reimbursed less than their actual cost. Pharmacy costs (i.e., overhead) were not accounted for in MMA, and quantifying these costs and finding a way to pay for them present challenges. Pharmacists need to be involved in discussions about Medicare spending and cost sharing by providers and patients. Providing cancer chemotherapy presents patients and providers with unique financial challenges. Pharmacists have a stake in and need to provide input into Medicare decisions about reimbursement for cancer chemotherapy and cost sharing by patients and providers.

Impact of Medicare changes in pharmacy reimbursement on patient care: Two case reports

Two case reports illustrate the impact of changes in pharmacy reimbursement associated with the Medicare Prescription Drug Improvement and Modernization Act (MMA) on patient care. The Medicare Part D benefit is complex and difficult for patients to understand. A patient's personal financial situation and quality of life issues may enter into decisions about enrolling in Part D and the use of drug therapy. Local coverage decisions by the Centers for Medicare and Medicaid Services can limit access to drug therapy and raise ethical dilemmas. Changes in pharmacy reimbursement associated with MMA has the potential to markedly impact patient care and outcomes.

Impact of the Medicare Prescription Drug Improvement and Modernization Act on pharmacy reimbursement: One year of experience

Impact of the Medicare Prescription Drug Improvement and Modernization Act on pharmacy reimbursement: One year of experience

Perspectives one year after implementation of the Medicare Prescription Drug Improvement and Modernization Act: A socratic panel discussion

### Dr. Brill: In your experience, has implementation of Medicare Part D been a positive or negative experience? ### Dr. Siegel: In my experience, Medicare Part D has been positive for some patients and negative for other patients. Helping patients understand the provisions of Part D and

Medical Student, Medicine Resident, and Attending Physician Knowledge of the Medicare Prescription Drug Modernization and Improvement Act of 2003

Background: The Medicare Prescription Drug Modernization and Improvement Act of 2003 (MMA) will undoubtedly influence health care delivery and affect how physicians practice medicine in the United States. Purpose: To evaluate the extent to which medical students, medicine residents, and physicians are informed about key provisions of the MMA. Methods: Eighty-four attending physicians, 104 medicine residents, and 115 fourth-year medical students at the University of Pennsylvania were surveyed over a 2-week period in February–March 2004. The brief survey instrument consisted of 10 multiple-choice questions: 9 questions assessing how well-informed respondents were about the MMA and 1 question assessing their knowledge of general current events. Results: Most respondents (77.8%) either “strongly disagreed” or “disagreed” that they were adequately informed about the MMA. While more than half of all respondents correctly answered the two questions about drug importation from Canada and general current events, a majority did not provide the correct answer to each of the other questions. No significant differences appeared by training. Conclusions: Attending physicians, medicine residents, and medical students at the University of Pennsylvania were generally ill informed about the MMA. Physician ignorance about important health care legislation continues to be a significant problem. More effective means of educating and informing medical students and physicians at all levels of training about important health policy changes may be warranted.

Competitive bidding: an update.

1. Linda Comeaux 2. Judy Davis 3. Don Lavanty Competitive bidding for Medicare Part B clinical laboratory services - it's been the most powerful unifier of the clinical laboratory industry due to the propensity to dilute the quality of laboratory services, impede access for beneficiaries, and remove any future laboratory competition within the demonstration sites. The first phase of the demonstration, called for in the Medicare Prescription Drug Improvement and Modernization Act of 2003, was to begin April 1, 2007. At this writing in February, the final plan is still pending approval of the Office of Management and Budget (OMB). No announcement has been made regarding the site location, the demonstration design, the application form, or other final plans. While ASCLS concurs that the current clinical laboratory fee schedule is outdated and needs revision, competitive bidding is not the most effective way to accomplish that goal. Let's look at how CMS proposes the demonstration occur and at actions ASCLS and other laboratory groups are taking in opposition to the proposal. The demonstration will exclude hospital inpatient and outpatient testing and physician office testing, except when the facility acts as a reference laboratory and performs testing on patients from other facilities. Each laboratory performing $100,000 of testing annually on beneficiaries residing in the bidding area will be required to submit a bid for each of over 1000 CPT codes reimbursed by the fee schedule. Laboratories must bid on all CPT codes but can form consortia with other laboratories. While multiple winners will be awarded, losing laboratories will not be able…

Competitive bidding--the continuing saga.

1. Paula Garrott Competitive bidding is an approach that has long been favored by Congress to attempt to control costs in a variety of arenas by allowing the marketplace to competitively determine prices. Some would argue it is, on the surface, the “American Way”. However, each time this approach has been suggested to control the cost of laboratory services the clinical laboratory community has staunchly argued that while competitive bidding for durable goods may be effective, it will not work for services that are provided by highly skilled professionals in diverse settings to even more diverse populations. For many years a competitive bidding strategy was discussed by Congress, but the laboratory community effectively lobbied against it. However in 2003, in the wake of public pressure over provision of prescription drugs for Medicare recipients, the Medicare Prescription Drug Improvement and Modernization Act (MMA) was passed by Congress and included a mandate for a competitive bidding demonstration project for clinical laboratory services. The proposed purpose of the project was to determine if market driven competitive bidding could be used to decrease costs to the Medicare program to provide quality clinical laboratory services. Although the project was to begin in April 2007, the complexities involved in the development of bidding guidelines have delayed the implementation. The current mechanism for reimbursing laboratories for services provided to Medicare beneficiaries is a fee schedule that was established in 1984. Although most laboratory stakeholders recognize that the fee schedule is outdated and irrational based on today's technology, they are united…