Mental Health Part D News Alert

December 20, 2005

New Study Examines Medicaid Drug Coverage Policies for Dual Eligibles

American Psychiatric Association Analyzes and Compares Medicaid Coverage in Light of New Medicare Prescription Drug Benefit

While most individuals with both Medicare and Medicaid will have access to mental health medications after January 1, 2006, final Medicaid refill policies and mandatory co-payments for medications will vary by state and may make continuity of care challenging for some patients, according to a new American Psychiatric Association (APA) state-by-state study of the upcoming transition from Medicaid to the new Medicare prescription drug benefit.  The survey was conducted between August 15 and November 4, 2005, and will be updated as new information becomes available (http://www.mentalhealthpartd.org/physicians/10_State_Medicaid_Drug_Coverage
_Policies.php).

“We undertook this study to give us a national perspective on how state Medicaid agencies will be handling the transition of their beneficiaries’ prescription drug coverage to Medicare and to identify any important upcoming challenges,” stated Irvin L. “Sam” Muszynski, J.D., Director, Office of Healthcare Systems and Financing at the APA.  “There is concern that millions of Americans transitioning their prescription drug coverage may not have access to needed medications in January 2006 under the new benefit structure and will experience significant disruptions in the quality of their health care.”

Access to medications under Medicare Part D is of critical importance, and advocacy groups across the country have filed a lawsuit against the federal government to ensure that vulnerable beneficiaries can obtain their medications under the new benefit.  Another issue that is adding to access problems became apparent when CMS stated recently that all required medications are not appearing correctly through their online Formulary Finder that is intended to help patients select a plan.

The APA reviewed how individual Medicaid programs will be approaching the January 1, 2006 transition of patients to the new Medicare prescription drug benefit.  The transition is critical for those currently receiving both Medicare and Medicaid (known as dual eligibles) whose prescription coverage will automatically switch from Medicaid to Medicare prescription drug plans in 2006.  The over six million dual eligibles are low-income and/or disabled Americans, many of whom may have cognitive impairments that make them particularly vulnerable during this transition.
The APA’s study confirmed that the new federal Medicare prescription drug coverage will have different regulations and policies than the current state-run Medicaid programs, with different lists of covered medications (called formularies) and specific implications for access to mental health medications.

Methodology

The survey examined three core areas including:

• Refill policy for medications prior to January 1, 2006.  During the transition of dual eligibles from Medicaid to Medicare, stability and consistency of a prescription drug regimen is essential.  The APA survey found that, for the most part, state Medicaid programs are maintaining their current refill policy on prescriptions for dual eligibles through the end of the year.  For example, a typical state allows Medicaid beneficiaries to obtain a 32-day refill once 75% of their current prescription has been used. 

  Therefore, the refills dual eligibles can obtain during the transition to Medicare will be a matter of timing, based on a state’s current refill policy.  If a patient’s prescription can be refilled at the end of December, the dual eligible could have a supply of medication (on average about a 30-day supply) during the transition.  However, if a patient’s prescription cannot be filled at the end of December because of the timing constraints of the state Medicaid policy (i.e., the patient has only used 50% of their current prescription), a dual eligible might not have a transition supply of medication as Part D begins on January 1, 2006.  This is in conflict with the Center for Medicare and Medicaid Services’ recommendation that all dual eligible patients have access to a transition supply of medications as the new benefit begins. 

• Coverage for drugs specifically excluded from Medicare Part D.  Certain mental health medications, particularly benzodiazepines and barbiturates, are excluded from coverage under Medicare Part D legislation.  The APA survey found that most state Medicaid programs will continue to offer coverage of these medications to all people with Medicaid into 2006.  Therefore, it is likely that dual eligibles will still have access to these medications after their transition to Part D.

  Exceptions include: Tennessee, which will end coverage of these medications on January 1, 2006; Colorado and Missouri, which stated they might re-evaluate their policy at the beginning of 2006; and Ohio, which will begin charging people with Medicaid a small co-payment for these medications in 2006.

• Financial assistance for co-pays associated with Medicare Part D.  While some states did not previously charge dual eligibles for prescription drug co-payments under Medicaid coverage (i.e., all medications were provided at no cost), all dual eligibles will be charged co-payments under Medicare Part D.  Co-payments for dual eligibles will range from $1 to $3, depending on the prescription drug plan and the tier of the medication within the formulary.  The APA survey found that most states will not be offering additional financial assistance or “wrap-around coverage” to help dual eligibles with their co-payments. 

In completing this state survey, the APA will continue to monitor state Medicaid agency decisions and the transition of dual eligibles into 2006.  Some states may change their policies as Medicare Part D evolves, and it will be important to evaluate how the transition progresses for beneficiaries as they attempt to select a new prescription drug plan that meets their medication needs.

Visit the Mental Health Part D website online at http://mentalhealthpartd.org/physicians/10_State_Medicaid_Drug_Coverage_Policies.php for more specific information about the APA survey and its results.

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About the American Psychiatric Association
The American Psychiatric Association is a national medical specialty society whose more than 36,000 physician members specialize in diagnosis, treatment, prevention, and research of mental illnesses including substance use disorders. Visit the APA at www.psych.org and www.healthyminds.org.

Visit www.mentalhealthpartd.org for the latest information on Medicare Part D, including enrollment, costs (including low-income subsidies), formularies, and the appeals process.  This website will also grow to include details on prescription drug plan formularies as well as tools to provide feedback as the new prescription drug benefit begins on January 1, 2006.

Mental Health Part D collaborators include: the American Association of Community Psychiatrists, the American Association for Geriatric Psychiatry, the American Psychiatric Association, the National Alliance on Mental Illness, the National Association of State Mental Health Program Directors, the National Council for Community Behavioral Healthcare, the National Mental Health Association, and Treatment Effectiveness Now.