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Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles: 2014


This memorandum report fulfills the annual reporting mandate from the Patient Protection and Affordable Care Act of 2010 (ACA) for 2014. 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 fourth report that OIG has produced to meet this mandate.


For this memorandum report, we determined whether the 329 unique formularies used by the 3,309 Part D plans operating in 2014 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 2010 Medicare Current Beneficiary Survey (the most recent available). Of these 200 drugs, 195 are eligible for Part D prescription drug coverage, 3 are excluded from coverage, 1 is no longer prescribed in the form taken by beneficiaries, and 1 is no longer available in the United States.


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 2013 mandated annual report.

We also found that the percentage of drugs subject to utilization management tools remained the same between 2013 and 2014. On average, formularies applied utilization management tools to 28 percent of the unique drugs we reviewed in 2014.