Keeping you updated on the latest Medicare and Part D news

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CMS reports that Medicare Part D rebates to insurers not passed onto government, beneficiaries

CMS reported this week that despite pharmacies and drug companies paying higher rebates to insurers over time, the savings are infrequently passed on to government health programs and beneficiaries.  The growth in rebates from drug makers to insurers has far outpaced the growth in Medicare Part D drug costs since 2010, the CMS report shows. This has helped private insurers in Part D keep costs down, but it is not translating to lower costs for consumers. In some cases, it has resulted in more drug costs being shifted to the government.

The full report can be found here.


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CMS Medicare Drug Spending Dashboard Updated with CY2015 Data

This week, CMS updated their interactive Medicare Drug Spending Dashboard with data from 2015.  The online tool provides users with Part B and Part D spending information for drugs with high spending on a per user basis, drugs with high overall spending, and drugs with large per unit cost increases.  The tool returns relevant spending, utilization, and trend data as well as drug information, manufacturer, and uses in a user-friendly format.

Detailed methodology and the underlying data set are also available for download.

Part D Total Spending, Top 5 Drugs CY2015


Part D Dashboard Summary for CY2014 and CY2015

# of Drug Products* Total Program Spending Percent of Program Spending
2014 2015 2014 2015 2014 2015
All Drugs 3,761 3,812 $121.5B $137.4B 100% 100%
All Drugs with Total Program Spending >$250M 115 119 $76.7B $88.0B 63% 64%
Top 15 Total Program 15 15 $29.1B $35.6B 24% 26%
Spending Drugs
All Drugs with Annual Per-User Spending >$10K 267 335 $26.2B $37.9B 22% 28%
Top 15 Drugs with Annual Per-User Spending >$10K 15 15 $9.3B $9.2B 8% 7%
All Drugs with Unit Cost Increases >25% 540 538 $13.7B $8.7B 11% 6%
Top 10 Drugs with Unit Cost Increases >25% 10 10 $1.3B $1.4B 1% 1%
All Drugs Included in Dashboard 40 40 $39.7B $46.2B 33% 34%
* Drug Products defined by distinct Brand Name and Generic Name (First Databank), excluding over the counter drugs.

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2016 Medicare Part D Low-Income Subsidy and Plan Performance

Wrapping up our coverage of the recently released Medicare Part D in 2016 and Trends over Time report from the Health Policy Institute at Georgetown University and the Kaiser Family Foundation are findings related to the Low-Income Subsidy (LIS) program and plan performance ratings.

The report found that nearly 3 in 10 Part D beneficiaries receive financial subsidies through the Low-Income Subsidy program.  This number has grown steadily over the past decade, reaching 12 million in 2016.  About two thirds of LIS enrollees  (roughly 8 million) are enrolled in stand-alone PDPs; others are in standard MA-PD plans, Special Needs Plans (SNPs), Medicare-Medicaid plans participating in financial alignment demonstrations, cost plans, or PACE plans.  PDP LIS enrollment has been relatively constant since the program began, but MA-PD plan enrollment has expanded greatly since 2006.


In 2016, MA-PD plans are far more likely than PDP plans to have 4 or more stars out of a possible 5 stars for the rating factors based on their Part D performance.  The average PDP plan star rating average has fluctuated in recent years while the MA-PD plan average has been increasing steadily.  Both plan types are rated on the same Part D performance factors.


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2016 Medicare Part D Benefit Design and Cost Sharing

Last week’s Medicare Part D in 2016 and Trends over Time report from the Health Policy Institute at Georgetown University and the Kaiser Family Foundation found that most PDP and MA-PD enrollees in 2016 were in plans with tiered pharmacy networks, no additional gap coverage, enhanced benefits, 5 tier formularies, and low deductibles.  PDPs and MA-PDs differ in some significant categories though – a much larger percentage of MA-PD enrollees are in enhanced plans and more PDP enrollees are in plans with tiered pharmacy networks.


The report also found that close to 60% of beneficiaries enrolled in PDP plans have plans that offer only the basic benefit. This is down from 83% a decade earlier.  Additionally, about half of all enrollees in 2016, in PDPs and MA-PDs, are in plans that do not charge the Part D deductible.  Tiered pharmacy networks have grown in recent years and are now the new norm in PDP plans.


8915-exhibit-3-13.pngNext week we will conclude this exploration of the Medicare Part D in 2016 and Trends over Time report by digging deeper into the Low Income Subsidy and Plan Performance Ratings.

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2016 Medicare Part D Premiums

Last week’s Medicare Part D in 2016 and Trends over Time report from the Health Policy Institute at Georgetown University and the Kaiser Family Foundation provides a snapshot of Part D in 2016 and trends over the past decade.  A previous post covered Part D enrollment trends from over the past decade.  Part D premiums for most beneficiaries enrolled in PDP plans increased in 2016.  This increase marked the end of 6 years of little change.  As the chart below indicates, MA-PD plans in 2016 continued the recent trend of modest growth.  Close to 50% of beneficiaries in 2016 enrolled in MA-PD plans paid no monthly premium for Part D coverage.8915-exhibit-2-1.png

As might be expected, geography plays a considerable role in Part D premiums.  PDPs offering comparable benefits can vary by as much 6 times the cost, depending on the region.  Even within the same geographic area, there can be large differences in stand-alone PDP premiums.


In the coming days, we will take a closer look at 2016 Medicare Part D benefits, the LIS program, and plan performance ratings.

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2016 Medicare Part D Enrollment Trends

A report published today by the Health Policy Institute at Georgetown University and the Kaiser Family Foundation exploring the current state of Medicare Part D and trends over the last decade presents a number of interesting findings.  The percent of beneficiaries enrolled in a Part D plan has increased from 52% in 2006 to 71% in 2016.  The chart below presents a high level view of current Part D  enrollment.8915-exhibit-s-1.png

A closer examination of 2016 Part D enrollment data reveals that the three largest Part D sponsors, UnitedHealth, Humana, and CVS Health, account for 52% of enrollees.  The ten largest sponsors have enrolled 80% of Part D beneficiaries.  The average Medicare beneficiary ha 26 PDP plans available in 2016, the lowest amount in the past ten years.  On average, there were 16 MA-PD plans available to beneficiaries, a number that has remained relatively stable since 2011.


A closer look at 2016 Part D premiums, benefits, the LIS program, and plan performance ratings will be covered in the coming days.


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Avoidable Hospital Readmissions Down Nationwide, According to CMS Data

The Hospital Readmissions Reduction Program, implemented as part of the Affordable Care Act, was implemented to reduce preventable hospital  readmissions for targeted conditions by adjusting payments for hospitals with higher than expected rates. CMS has additional quality improvement initiatives in place, including Partnership for Patients which seeks to improve care for beneficiaries as they change health care settings.  Hospital readmissions are expensive and can be an indicator of poor quality care.  Discharging patients with the proper medication, instructions for follow-up care, and clear instructions are simple steps that can reduce preventable hospital readmissions.

Newly released data from CMS indicates that these and other measures are proving effective, evidenced by a significant reduction in the number of Medicare beneficiaries readmitted to hospitals in the 30 days after being discharged. In fact, the readmission rate fell between 2010 and 2015 in every state and the District of Columbia except for Vermont. The readmission rate declined by 8 percent nationally in the same time period.


CMS Announcement