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Report (OEI-05-10-00390)

Part D Plans Generally Cover Drugs Commonly Used By Dual Eligibles

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This report was mandated in the Patient Protection and Affordable Care Act of 2010.

Dual eligibles are individuals who are eligible for both Medicare and Medicaid. Overall, we found that the rate of Part D plan formularies' inclusion of the 191 drugs commonly used by dual eligibles is high, with some variation. On average, Part D plan formularies include 96 percent of the 191 commonly used drugs. In fact, 90 percent of dual eligibles are enrolled in Part D plans that use formularies that include at least 90 percent of the commonly used drugs.

Dual eligibles are a particularly vulnerable population. Overall, they are in worse health than the average Medicare beneficiary and typically require and use more prescription drugs, and more health care services in general, than other Medicare beneficiaries.

To control costs and ensure the safe use of drugs, Part D plans are allowed to establish formularies from which they may omit drugs from prescription coverage and control drug utilization through utilization management tools. These tools include prior authorization, quantity limits, and step therapy. CMS annually reviews Part D plan formularies. CMS also assesses the utilization management tools present in each formulary.

We found variation in the rate at which Part D plan formularies apply utilization management tools to the drugs commonly used by dual eligibles. Some Part D plan formularies apply these tools to none of the commonly used drugs, whereas others apply these tools to 45 percent of the commonly used drugs.

We make no recommendations in this memorandum report. However, we have provided CMS the list of 200 drugs commonly used by dual eligibles for its reference.

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