The Medicare Part D Coverage Gap

Whether you’re new to Medicare Part D or not, knowing  how it works can help you better understand your costs.  Each plan that provides drug coverage, whether it’s a stand-alone plan or a Medicare Advantage plan that includes drug coverage, will include cost sharing.
Many Medicare beneficiaries are confused by the Part D coverage gap (also know as the “doughnut hole); this is why it is important to understand how the ‘doughnut hole’ works.

How do the Drug Payment Stages work?

You share costs with the plan, usually as copays until the combined total hits $2,840 (2011).  This figure can vary by plan.  This stage is sometimes called the “initial coverage period.”
After you reach $2,840 (2011) in total drug costs, you pay 93% of the cost of generic drugs and about 50% of the cost of most brand-name drugs until your yearly drug costs hit $4,550 (2011).  During this period you pay most of the costs, your plan pays a little.  This is the Coverage Gap or Doughnut hole.

 You pay a small copay or coinsurance on all your drugs until the year’s end.  The plan pays the rest.  This is known as Catastrophic coverage and there is no limit to the amount the plan pays

What do I do if my Medicare drug plan says no to my request that it pay for a drug? (How do I appeal?)

If you have formally asked your plan to pay for a drug, override a restriction, or move your drug to a lower cost tier (requested an “exception”), and your plan turns you down, you should appeal.

Before you can begin the appeals process, you must have already asked for an exception and been officially denied in writing. A “no” at the pharmacy is not an official denial.

The process for appealing is the same whether you are in a Medicare private health plan with drug coverage (MA-PD) or stand-alone private drug plan (PDP).

How to appeal your plan's decision

• Your plan should send you a written denial titled "Notice of Denial of Medicare Prescription Drug Coverage." The notice should clearly explain why the plan is denying coverage for your prescription and tell you where to send your appeal.
• You have 60 days from the date on the "Notice of Denial" to submit your appeal. (Under certain circumstances, you may be able to appeal after 60 days if you have "good cause"—for example, if you were in the hospital and therefore could not appeal earlier.) By appealing, you are asking for a "redetermination" from the plan.
• The plan must respond no later than seven calendar days from the date it received the request. If it is an emergency, you or your doctor can ask for an "expedited" redetermination. Your plan must respond to an expedited appeal within 72 clock hours.
• If you have to pay for your drug out of pocket since your plan denied your exception request, be sure to to submit receipts and request reimbursement from your plan in your appeal.
  If your doctor submits this appeal on your behalf, you will need to appoint your doctor as your representative by signing an "Appointment of Representative" form. Have your physician submit the form along with the letter of medical necessity.
  A signed "Appointment of Representative" form allows your doctor to represent you throughout the appeals process. A signed form also allows your doctor to represent you in any other Medicare prescription drug appeals over the course of the calendar year.
  Medicare Appeals Council (MAC) review.
  If you disagree with the ALJ's decision, you can appeal within 60 days of the date on the ALJ decision to the MAC. The MAC can also review the ALJ decision on its own initiative.

Medicare, CMS interpretation of off label drug standard

Judge Rules that CMS Misinterpreted Off-Label Drug Coverage Standard                   

This week, as a result of a challenge filed in court by the Medicare Rights Center in 2007, a judge held that the current interpretation of the coverage standard for drugs used off-label under the Medicare prescription drug benefit, also known as Part D, is invalid. Since Part D began, the Centers for Medicare and Medicaid Services (CMS) has not covered drugs used for off-label indications—drugs used for treatments other than those approved by the Food and Drug Administration—if the use is not listed in statutorily identified, privately owned and published drug guides known as compendia. However, Judge Harold Baer of the U.S. District Court in the Southern District of New York ruled, as Medicare Rights Center had argued, that the list of compendia in the Medicare law was not meant to be restrictive, but to be an illustrative example of materials that may be used to determine if coverage of a drug used for off-label purposes is appropriate.
                   
Medicare Rights Center filed suit on behalf of plaintiffs Judith M. Layzer, who recently lost her battle with ovarian cancer, and Ray J. Fischer, who suffers from a rare form of muscular dystrophy. Both plaintiffs used off-label drugs as treatment for their conditions. While these uses were supported by peer-reviewed medical literature, they were not included in the compendia listed in the Medicare statute.
                   
In addition to challenging the interpretation of the Part D statute through litigation, the Medicare Rights Center has pursued a legislative remedy, seeking clarification from Congress that off-label drug treatments can be covered under Part D if there is evidence of efficacy in peer-reviewed literature such as the New England Journal of Medicine.
                   
That effort was successful with respect to anticancer chemotherapy drugs with the passage of the Medicare Improvements for Patients and Providers Act (MIPPA) in 2008, which clarified that peer-reviewed medical literature may be used for coverage decisions of off-label drug treatments of cancer. As a result of MIPPA, Medicare Rights Center secured coverage for Mrs. Layzer of her drug going forward, but her estate still requires reimbursement for thousands of dollars of medication she used before MIPPA took effect.
                   

Does my state have a program to help me with my prescription drug costs?

Many states offer a state pharmaceutical assistance program (SPAP) to help their residents pay for prescription drugs. Each program works differently.

Many states coordinate their drug assistance programs with Medicare’s drug benefit (Part D). If you do not have Part D but qualify for your state’s SPAP, you will have the chance to sign up for Part D, and may be required to enroll in a Part D plan. If a drug is covered by both your SPAP and your Part D plan, both what you pay for your prescriptions plus what the SPAP pays will count toward the out-of-pocket maximum you have to reach before your Medicare drug costs go down significantly. Your SPAP may also help pay for your Part D plan’s:

• premium;
• deductible;
• copayments; and/or
• coverage gap. (Many SPAPs give you coverage during your part D plan’s “coverage gap” or “doughnut hole.”)

What is not covered by Medicare?

Medicare does not cover all health care services. Health care services not covered by Medicare include, but are not limited to:

• alternative medicine, including experimental procedures and treatments, acupuncture, and chiropractic services (except when manipulation of the spine is medically necessary to fix a subluxation of the spine. A subluxation is when one or more of the bones of the spine move out of position);
• most care received outside of the United States;
• cosmetic surgery (unless it is needed to improve the function of a malformed part of the body);
• most dental care;
• hearing aids or the examinations for prescribing or fitting hearing aids (except for implants to treat severe hearing loss in some cases);
• personal care or custodial care, such as help with bathing, toileting and dressing (unless homebound and receiving skilled care) and nursing home care (except in a skilled nursing facility if eligible);
• housekeeping services to help you stay in your home, such as shopping, meal preparation, and cleaning (unless you are receiving hospice care)
• non-medical services, including hospital television and telephone, a private hospital room, canceled or missed appointments, and copies of x-rays;
• most non-emergency transportation, including ambulette services;
• Keep in mind that even for Medicare-covered services, Medicare does not usually pay 100 percent of the cost. Unless you have supplemental insurance, you will usually have to pay deductibles and coinsurances. Most preventive services are covered by Original Medicare with no copays or deductibles.
  If you are in a Medicare Advantage plan (sometimes called a Medicare private health plan), your plan may cover some of these services. Check with your plan to find out what additional benefits they offer.

When does Medicare cover eye care?

Medicare will not generally pay for routine eye care, but it will pay for some eye care services if you have a chronic eye condition, such as cataracts or glaucoma. Medicare will cover:

• Surgical procedures to help repair the function of the eye due to these conditions. For example, Medicare will cover surgery to remove the cataract and replace your eye’s lens with a man-made intraocular lens.
• Eyeglasses or contacts only if you have had cataract surgery during which an intraocular lens was placed into your eye. Medicare will cover a standard pair of untinted prescription eyeglasses or contacts if you need them after surgery. If it is medically necessary, Medicare may pay for customized eyeglasses or contact lenses.
• An eye exam to diagnose potential vision problems. If you are having vision problems that indicate a serious eye condition, Medicare will pay for an exam to see what is wrong, even if it turns out there is not anything wrong with your sight.

Medicare will only pay for routine eye care in the following specific circumstances:

• If you have diabetes, Medicare will pay for an eye exam once every 12 months to check for eye disease due to the condition;
• If you are at high risk for glaucoma Medicare will cover an eye exam by a state-authorized eye doctor once every 12 months. You are considered to be at high risk if you:
  • have diabetes;
  • have a family history of glaucoma;
  • are African American and age 50 or older; or
  • are Hispanic and age 65 or older.