Part B versus Part D Drug Benefit Reform is Long Overdue

Injectable drug therapy administration is generally covered as a medical expense under Medicare Advantage Plans. The member typically goes to an outpatient facility or hospital to receive the drug treatment and pays the associated medical visit copayment or deductible as required by the member’s plan, until he or she reaches the policy’s out-of-pocket maximum. Once the individual has paid the maximum amount, the policy pays in full. 

For those who take their drug therapy orally, either in tablet or liquid form, treatment is covered as a Part D prescription drug, not as a medical expense. The beneficiary must pay the related prescription drug copayment or deductible. Depending on the plan’s terms, the amount an individual has to pay out of pocket for the oral chemotherapy can be higher than if it were treated as a medical expense.

However, there is a very grey middle ground for crossover drug therapies that have multiple uses such as methotrexate, which can be used to treat cancer or arthritis, or prednisone, which can be used to treat a wide range of dermatological issues, asthma, or be used as an anti-rejection drug in transplant patients. In the world of Medicare Advantage, these drugs are known as Part D versus Part B Drugs.

B vs. D Drugs have been problematic since the beginning of Part D in 2006. Generally, the patient must take the prescription for a B vs. D drug to the pharmacy where the pharmacist transmits an electronic claims to the PBM who denies payment for the drug because a B vs. D Determination. Coverage under Part D or Part B must be made determined by the plan sponsor or its delegated PBM based on the prescriber’s intended use, the patient’s treatment location (home, LTC, hospital, etc.), route of administration , and who administers the drug. CMS expects Plan Sponsors to do the due diligence in making such determinations. CMS Compliance Audits focus on the methodology and accuracy of the Part B versus Part D Coverage Determination process.

CMS has the opportunity to make a meaningful reform of a clumsy and costly regulation by eliminating the B vs. D Coverage Determination requirement. Drugs falling in this grey area should be moved into Part D or Part B. This would eliminate member confusion on cost-sharing, source of obtaining the drug, and the delay at the point of service caused by the due diligence process the Plan is required to make.

In 2010, Milliman, Inc, a health care actuarial firm, completed an analysis sponsored by GlaxoSmithKline on the cost of creating parity between injectable and oral therapies and leveling the cost-share playing field between paying as a medical or as a pharmacy benefit. The result indicated that for most plans, the cost would be well below $1 PMPM whereas the drug claims alone added as much a $300 PMPM to cost.

The inconvenience to the member, the added cost to the provider, and the decreased cost to the plan through eliminating the due diligence process of a Coverage Determination makes logical sense to reform the B versus D Policy. CMS could eliminate one complexity to an extremely complex benefit while improving member satisfaction and reducing overall cost. This is truly a win-win opportunity for Medicare.