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Part D Plans Generally Include Drugs Commonly Used by Dual Eligible: 2013


This memorandum report fulfills the annual reporting mandate from the Patient Protection and Affordable Care Act of 2010 (ACA) for 2013. The ACA requires that OIG conduct a study of the extent to which formularies used by stand-alone prescription drug plans and Medicare Advantage prescription drug plans (referred to jointly as Part D plans) under Medicare Part D include drugs commonly used by full-benefit dual-eligible individuals (i.e., individuals who are eligible for both Medicare and Medicaid and who receive full Medicaid benefits and assistance with Medicare premiums and cost-sharing). Pursuant to the ACA, OIG must annually issue a report with recommendations as appropriate. This is the third report the OIG has produced to meet this mandate.


For this memorandum report, we determined whether the 302 unique formularies used by the 3,330 Part D plans operating in 2013 cover the 200 drugs most commonly used by dual eligibles. We also determined the extent to which those commonly used drugs are subject to utilization management tools, which include prior authorization, quantity limits, and step therapy. To create the list of the 200 drugs most commonly used by dual eligibles, we used the 2009 Medicare Current Beneficiary Survey (the most recent available). Of these 200 drugs, 195 are eligible for Part D prescription drug coverage and 4 are excluded from coverage by law. The final drug is eligible for Part D prescription drug coverage. However, we did not include it in our analysis because we could not confidently project the use of this drug for the entire dual eligible beneficiary population.


Overall, we found that the rate of Part D plan formularies' inclusion of the 195 drugs commonly used by dual eligibles is high, with some variation. On average, Part D plan formularies include 96 percent of the 195 commonly used drugs. In addition, 64 percent of the commonly used drugs are included by all Part D plan formularies. These results are largely unchanged from our findings from our 2012 mandated annual report.

We also found that plan formularies increased the number of unique drugs subject to utilization management tools from 2012 to 2013. On average, formularies applied utilization management tools to 28 percent of the unique drugs we reviewed in 2013, compared to 24 percent of the unique drugs we reviewed in 2012. Most of this increase is due to an increase in plan formularies' use of quantity limits.

This report does not contain recommendations.