WASHINGTON – Thousands of elderly patients are learning the hard way that it isn't enough to check whether their medicines are covered under a new Medicare drug plan they have chosen.
Insurers are using a broad range of tools to get customers to take the cheaper drugs they want them to take, and failure to follow their instructions can be costly.
In many cases, a patient's doctor has to get prior approval for a drug before the plan will cover it. In others, the plan will limit the quantity of a drug the patient can get.
Plans also divide drugs into tiers. The lowest level requires only nominal out-of-pocket costs, while the highest — called specialty tiers — require the customer to pay for a quarter, a third or even more of the costs.
The tools are not unique to Medicare. The Veterans Affairs Department uses them, and almost all workplace drug plans — including the health plan used by members of Congress — have them.
However, the Medicare plans have taken the tools to a whole new level, said Dan Mendelson, president of Avalere Health, a consulting firm.
While plans in the private sector routinely place 15 to 20 drugs on the specialty tier, Medicare plans "have an average of 88 drugs on the fourth tier. That's unprecedented," he said.
"What they're doing is funding the benefit by shifting the costs onto beneficiaries who have chronic illness," he added.
The government's point man on Medicare, Mark McClellan, said tiering keeps expenses down by directing patients to generic or cheaper brand-name drugs.
He said the federal government closely monitors plans to make sure they don't withhold drugs that are crucial to a patient's health. And the appeals process for doctors and patients is speedy, he said.
"So far, we haven't seen comments that we should do something vastly different from what we're doing now," said McClellan, administrator for the Centers for Medicare and Medicaid Services. "We'll keep looking closely to make sure we're striking that balance."
He said the Medicare drug benefit is more generous than other government programs in the number of drugs that are covered. That's particularly true for the mentally ill, people who have had organ transplants, cancer patents, people prone to seizures and AIDS patients, he said.
But drugs for those problems are also subject to cost-cutting. For instance, Dr. Daniel Hicks of Georgetown University Medical Center prescribed 400 milligrams a day of Seroquel to a patient to treat depression. Her plan, sponsored by Humana, would only cover 300 milligrams a day.
Hicks said he interceded with a Humana official and was told the patient could get the higher dosage, but the patient was told otherwise.
The patient "could easily have died, due to a blatant mistake by the company which may not have been corrected," Hicks said.
Mary Sellers, a spokeswoman for Humana, said the company follows guidelines established by the Food and Drug Administration when establishing quantity limits on drugs. She said the company would contact Hicks to discuss his patient.
Some patient groups said what happened to Hicks' patient is an example of the difficulty certain chronically ill patients can face in getting medicine through the new Medicare drug program. The American Psychiatric Association recently testified before Congress that it has received hundreds of calls from doctors and individuals reporting the denial of essential medications.
McClellan said CMS is tracking complaints and will hold companies accountable when they don't quickly address requests for prior authorization or for exceeding a quantity limit.
On the tiering issue, McClellan noted that the poorest of Medicare beneficiaries are exempted from the tools that would require them to make higher copayments. For those who live in poverty, out-of-pocket expenses are limited to $1 for generics and $3 for brand name drugs.
McClellan noted that wealthier beneficiaries still have some additional protection from the specialty tiers because the government will pay 95 percent of drug costs after beneficiaries pay $3,600 in a particular year. Many beneficiaries taking expensive medication didn't have that sort of protection before Jan. 1.
Mark Merritt, president of the association that represents pharmacy benefit managers, said that restrictions are designed primarily for safety reasons, not profit.
"Sometimes they have cost-savings benefits, sometimes they don't," said Merritt, president of the Pharmaceutical Care Management Association. "But mostly, it's about getting patients the kinds of medicines they need."
Merritt said getting the insurer's approval ensures that patients adhere to safety guidelines established for a particular drug and prevents abuse.
He cited the painkiller OxyContin. "That should have prior authorization every refill," Merritt said