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New Recommendations May Increase Out-of-Pocket RA Treatment Costs for Medicare Part D Recipients

Rheumatology Practice Management June 2018 Vol 6 No 3 - Value Proposition, Financial Issues
Recommendations May Increase Out-of-Pocket RA Treatment Costs for Medicare Part D Recipients

Current Medicare Part D plans concentrate the highest out-of-pocket (OOP) costs at the beginning of the benefit year, but recent recommendations by the Medicare Payment Advisory Commission (MedPAC) to alleviate the OOP expense burden for users of high-cost specialty drugs, such as those used to treat rheumatoid arthritis (RA), could instead lead to increased yearly OOP costs.

Jalpa Doshi, PhD, Professor of Medicine, Perelman School of Medicine, Leonard Davis Institute of Health Economics, University of Pennsylvania, Philadelphia, and colleagues examined data from Medicare beneficiaries in 2012 who underwent treatment with high-cost specialty medications for RA, multiple sclerosis, and chronic myeloid leukemia. They found that high OOP costs during the first few months of the coverage year and through the catastrophic coverage phase were not lowered for the most costly medications, and left patients who use specialty drugs to treat RA with higher yearly OOP costs using the proposed MedPAC recommendations.

Using the Medicare data, Dr Doshi and colleagues found that patients with RA spent approximately $3485 per year on specialty drugs to treat their condition, and a yearly OOP average of $3949 on all drugs combined. These costs were front-loaded at the beginning of the year, with the January mean OOP costs for the RA group at $977, followed by $858 in February, and $775 in March. After patients moved through the coverage cycle phases (deductible, initial coverage, coverage gap, and catastrophic coverage), the 5% coinsurance under catastrophic coverage led to a more stable mean OOP cost range from April through December of $128 to $154 per month.

Proposed MedPAC changes to prescription drug coverage would eliminate the 5% coinsurance during the catastrophic coverage phase and the 50% manufacturer discount that is given to patients who purchase brand name drugs under Medicare part D. This manufacturer discount would no longer count toward the patient’s yearly OOP cost threshold that triggers catastrophic phase drug coverage, which would be raised to $4700 per year under the proposal.

Dr Doshi and colleagues used the study sample to predict what costs would have been using the MedPAC proposals and found that for patients using specialty RA drugs, the OOP costs would remain front loaded into the beginning of the year, ranging from $512 to $1076 per month from January to May. This would level off for the remainder of the year, with the majority of the months costing the patient ≤$10 per month. However, the yearly OOP costs would increase under the MedPAC proposal to $4540 compared with $3949 per year under the current Medicare Part D rules. The reason for the increase, Dr Doshi and colleagues observed, was the elimination of the 50% manufacturer’s discount being applied to the yearly OOP maximum allowed under Medicare Part D.

“Medicare Part D policies that support access and adherence are critically important. Our analyses indicate that efforts to alleviate financial barriers to specialty drug adherence should include attention to both the amount and timing of OOP costs,” the investigators concluded. Doshi JA, et al. Am J Manag Care. 2017;23(3 suppl):S39-S45.

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Last modified: June 27, 2018
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