Part D Event (PDE) Cost Information Barbara Frank, M.S., M.P.H. - PowerPoint PPT Presentation

Part D Event (PDE) Cost Information Barbara Frank, M.S., M.P.H. Director of Workshops, Outreach, & Research University of Minnesota

Part D Event (PDE) Cost Information  Researchers cannot determine “true” costs to Medicare or Plan for Prescription Drugs  Researchers can determine “point of sale” cost to beneficiary 2

PDE Cost Information  To protect commercially sensitive plan data, the final rule addresses only the elements of PDE data and does not extend to Part D plan-specific bid data, rebates, risk-sharing, reinsurance, or payment information collected outside of a Part D event. 3

PDE Cost Variables Gross Drug Cost  Gross Drug Cost* (Total Cost of Drug) is derived from the sum of 3 or 4 variables submitted by Plans to CMS, but not available to researchers: ˗ Ingredient Cost Paid ˗ Dispensing Fee Paid ˗ Total Amount Attributed to Sales Tax ˗ Beginning 2010, Vaccine Administration Fee  Mean = $65.20  Median = $21.70 4

PDE Cost Variables  Gross Drug Cost = $65.20 ˗ Patient Pay Amount + $11.06 ˗ Low-Income Cost-Sharing Subsidy Amt + $14.67 ˗ Other True Out-of-Pocket Amount + $0.50 ˗ Patient Liability Reduction due to Other Payer Amt + $0.09 ˗ Covered D Plan Paid Amount + $35.32 ˗ Non-Covered Plan Paid Amount $3.55 $65.20 = 11.06 + 14.67+ 0.50 + 0.09 + 35.32 + 3.55 5

PDE Cost Variables Gross Drug Cost  Limitation: Beginning with 2011 PDE data, the variable gross drug cost: ˗ Continues to include full cost of the drug ˗ Does NOT reflect any Coverage Gap Discounts that may have been applied ˗ Therefore, if the sum of the 6 variables is less than the gross drug cost (TOT_RX_CST_AMT), and if the event was in the coverage gap phase of the benefit, then the difference in these amounts can be assumed to be the gap discount amount. 6

PDE Cost Variables  Gross Drug Cost = $65.20 (Bene in coverage gap) ˗ Patient Pay Amount + $5.53 ˗ Low-Income Cost-Sharing Subsidy Amt + $14.67 ˗ Other True Out-of-Pocket Amount + $0.50 ˗ Patient Liability Reduction due to Other Payer Amt + $0.09 ˗ Covered D Plan Paid Amount + $35.32 ˗ Non-Covered Plan Paid Amount $3.55 5.53 + 14.67+ 0.50 + 0.09 + 35.32 + 3.55 = $59.67 Difference of $5.53 assumed to be the gap discount to the beneficiary (i.e. 50% discount) 7

PDE Cost Variables Patient Pay Amount  Patient Pay Amount – Amount that the beneficiary paid that is NOT reimbursed by a third party.  Amount contributes to True Out-of-Pocket amount (TrOOP) only for covered drugs.  Drug Coverage Status Codes ˗ Covered 99.34% ˗ Enhanced 0.44% ˗ OTC 0.22% 8

PDE Cost Variables Patient Pay Amount ($)  Total population ˗ Minimum $0.00 ˗ Mean $11.06 ˗ 25 th Percentile is $0.00, 50% $3.10  Those with LICS Amounts ˗ Minimum $0.00 ˗ Mean $1.71 ˗ 25 th Percentile is 0.00, 50% $1.05  Without LICS Amounts ˗ Minimum $0.00 ˗ Mean $17.91 ˗ 25 th Percentile is $2.00, 50% $5.03 9

PDE Cost Variables  Gross Drug Cost = ˗ Patient Pay Amount + ˗ Low-Income Cost-Sharing Subsidy Amt + ˗ Other True Out-of-Pocket Amount + ˗ Patient Liability Reduction due to Other Payer Amount + ˗ Covered D Plan Paid Amount + ˗ Non-Covered Plan Paid Amount 10

PDE Cost Variables Low Income Cost Sharing Subsidy Amount (LICS)  Low Income Cost Sharing Subsidy Amount (LICS) – Amount the Plan reduced patient liability due to a beneficiary’s LICS status.  CMS reconciles prospective LICS payments made to Plans with actual LICS amounts incurred by Plan at point of sale. 11

PDE Cost Variables Low Income Cost Sharing Subsidy Amount (LICS)  Total Population ˗ Minimum $0.00 ˗ Mean $14.67 ˗ Median $0.00 ˗ 75 th percentile is $5.95  LICS amounts only - Minimum $0.01 - Mean $34.69 - Median $8.71 - 75 th percentile is $31.23 12

PDE Cost Variables  Gross Drug Cost = ˗ Patient Pay Amount + ˗ Low-Income Cost-Sharing Subsidy Amt + ˗ Other True Out-of-Pocket Amount + ˗ Patient Liability Reduction due to Other Payer Amount + ˗ Covered D Plan Paid Amount + ˗ Non-Covered Plan Paid Amount 13

PDE Cost Variables Other True Out-of-Pocket Amount  Other TrOOP Amount – records all qualified third party payments on behalf of beneficiary.  Does not include LICS Subsidy Amount or Patient Pay Amount.  Examples are qualified State Pharmacy Assistance Programs, charities, or other TrOOP- eligible parties. 14

Part D Event Variables Other True Out-of-Pocket Amount  Total Population  Minimum $0.00  Mean $0.50  Median $0.00  95 th percentile is $0.00  99 th percentile $5.73  When populated Mean = $23.58  Populated records 2.14% 15

PDE Cost Variables Patient Liability Reduction Due to Other Payer Amount (PLRO)  Amount patient liability amount is reduced due to other benefits. Examples are VA and TRICARE. These other payers are not TrOOP-eligible and do not participate in Medicare Part D. 16

PDE Cost Variables Patient Liability Reduction Due to Other Payer Amount (PLRO)  Minimum - negative amount??  Mean $0.09  99 th Percentile $0.00  Less than 0.4 % of records have PLRO amounts  When correctly populated, Mean = $24.09 17

PDE Cost Variables  Gross Drug Cost = ˗ Patient Pay Amount + ˗ Low-Income Cost-Sharing Subsidy Amt + ˗ Other True Out-of-Pocket Amount + ˗ Patient Liability Reduction due to Other Payer Amount + ˗ Covered D Plan Paid Amount + ˗ Non-Covered Plan Paid Amount 18

PDE Cost Variables Covered D Plan Paid Amount (CPP)  Minimum $0.00  Mean $35.32  Median $6.46  25 th Percentile is $0.00 19

PDE Cost Variables  Gross Drug Cost = ˗ Patient Pay Amount + ˗ Low-Income Cost-Sharing Subsidy Amt + ˗ Other True Out-of-Pocket Amount + ˗ Patient Liability Reduction due to Other Payer Amount + ˗ Covered D Plan Paid Amount + ˗ Non-Covered Plan Paid Amount 20

PDE Cost Variables Non-Covered Plan Paid Amount (NPP)  Total Population ˗ Minimum Negative Amount?? ˗ Mean $3.56 ˗ 75 th Percentile $0.00  When NPP populated ˗ Mean $11.04 ˗ Median $1.37 21

PDE Cost Variables Non-Covered Plan Paid Amount (NPP)  The following patterns occur when costs are mapped to the defined standard benefit: ˗ When the plan pays more than what is covered in a given benefit phase under the standard benefit, the NPP will be a positive amount. ˗ When the plan and the defined standard benefit payment amounts are the same, the NPP is zero. ˗ When the plan pays less than what is covered in a given phase under the defined standard benefit, the NPP will be a negative amount. 22

Non-Covered Plan Paid Amount (NPP) Example of Negative Amount  The beneficiary’s YTD total covered drug costs = $1,500. The beneficiary purchases a covered Part D drug for $100. The copay for this drug is $40.  Explanation: According to the standard benefit, the beneficiary is in the initial coverage period where the beneficiary pays 25% cost share and the plan pays 75%. In Plan B’s benefit structure, the beneficiary has a flat $40 copay, which is 40% of the total drug cost. The plan liability is $60 under Plan B’s benefit structure as compared with $75 under the standard defined benefit. The difference between the plan liability in the Plan’s benefit structure and the standard benefit plan structure is a supplemental benefit. In this case, the amount is negative because the plan paid less than under the defined standard. This amount is reported in the NPP field. 23

Non-Covered Plan Paid Amount (NPP) Example of Negative Amount 24

PDE Cost Variables  Drug costs are shared by ˗ Beneficiary Responsibility = » Patient Pay Amount + » LICS Amount + » Other TrOOP Amount + » PLRO Amount ˗ Net Amount Part D Plan paid for drug = » Covered D Plan Paid Amount + » Non-Covered Plan Paid Amount 25

PDE Cost Variables Please note that CMS uses only the Covered D  Plan Paid Amount in the reconciliation with the Plan  Non- Covered Plan Paid Amount is “recouped” by the Plan through higher premiums for the Enhanced Benefits 26

PDE Cost Variables  True Out-of-Pocket Cost (TrOOP) = ˗ Patient Pay Amount + ˗ LICS Amount + ˗ Other TrOOP Amount  MIN is $0.00 and Mean is $26.24 27

PDE Cost Variables Summary  Gross Drug Cost = ˗ Patient Pay Amount + ˗ Low-Income Cost-Sharing Subsidy Amt + ˗ Other True Out-of-Pocket Amount + ˗ Patient Liability Reduction due to Other Payer Amount + ˗ Covered D Plan Paid Amount + ˗ Non-Covered Plan Paid Amount  $65.20 = 11.06 + 14.67+ 0.50 + 0.09 + 35.32 + 3.55  TrOOP = $26.24  Covered D Plan Paid Amount = $35.32 28

PDE Cost Variables Catastrophic Coverage Code  Values  A = Attachment point met on event 0.25%  C = Above attachment point 8.35%  Blank = Attachment point not met 91.40% 29

Top 10 Drugs by Cost 2009 Drug Name Drug Cost Drug Fills Drug Users $2,721,330,618 2,308,965 PLAVIX 15,091,816 $2,288,410,393 2,797,156 LIPITOR 16,124,928 $1,676,860,707 1,538,131 NEXIUM 8,186,015 $1,647,172,156 778,877 SEROQUEL 6,117,828 $1,585,291,207 1,107,900 ARICEPT 7,537,588 $1,394,195,358 1,360,521 ADVAIR DISKUS 5,919,728 $1,341,371,884 328,814 ZYPREXA 2,730,705 $1,188,291,746 839,030 ACTOS 5,105,667 $1,079,251,761 337,862 ABILIFY 2,210,032 30 $958,924,218 1,226,259 FLOMAX 6,533,806