Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles: 2012

WHY WE DID THIS STUDY

This memorandum report fulfills the annual reporting mandate from the Patient Protection and Affordable Care Act of 2010 (ACA) for 2012. 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 second report the OIG has produced to meet this mandate.

HOW WE DID THIS STUDY

For this memorandum report, we determined whether the 272 unique formularies used by the 3,107 Part D plans operating in 2012 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. To create the list of the 200 drugs most commonly used by dual eligibles, we used the 2008 Medicare Current Beneficiary Survey. Of these 200 drugs, 191 are eligible for Part D prescription drug coverage and 9 are excluded from coverage by law.

WHAT WE FOUND

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 addition, 61 percent of the commonly used drugs are included by all Part D plan formularies. These results are largely unchanged from OIG's findings for formularies reported in the related 2011 mandated annual report.

We also found that plan formularies increased the number of unique drugs subject to utilization management tools from 2011 to 2012. On average, formularies applied utilization management tools to 24 percent of the unique drugs we reviewed in 2012, compared to 19 percent of the unique drugs we reviewed in 2011. Most of this increase is due to an increase in the use of quantity limits by plan formularies.

This report does not contain recommendations.