The patient has transitioned to the next phase of coverage
Medicare Part D has four phases of coverage: Deductible, Initial Coverage, Coverage Gap (aka "Donut Hole"), and Catastrophic Coverage. If drug costs reach certain defined thresholds, patients move from one phase of coverage to the next. Often, copays are different in each phase, with the Deductible and Donut Hole usually being the most expensive phases for patients. You can easily identify the phases of coverage a patient will move through and during which months using Amplicare.
There have been drug formulary changes
Insurance companies create formularies (essentially lists of medications), which determine the formula for a patient's copay/coinsurance depending on the tier of the medication. There are five tiers that categorize a plan's formulary. Tier 1 medications are usually preferred generics – the cheapest formulary tier. Tier 4 medications are usually non-preferred brands and are generally much more expensive. The highest-cost tier, Tier 5, are specialty medications. From year-to-year plan formularies change pretty significantly, which is why it is imperative that your Medicare patients are reviewing their plan options every Open Enrollment.
Insurance plans can move drugs to lower tiers at any point during the year, in which case the copay/coinsurance would decrease, however plans are NOT allowed to move drugs to a higher tier after October 15th of the previous year (when Open Enrollment begins). They are also not allowed to take a drug off their formulary after October 15th, unless there's a new generic introduced into the market or the drug is no longer considered safe. In these instances, they must give beneficiaries 60 days notice. If the insurance plan does not abide by these rules they are penalized. If your patient's drug costs have increased because of such formulary changes, please contact us so we can help you report this to the CMS.
The drug's full cost has changed
Insurance plans are not allowed to move drugs to higher tiers after October 15th, but they are allowed to change the full cost of a drug at any point during the year. This can consequently change what the patient pays for their medications. During Initial Coverage, the patient will pay a portion of the drug's full cost, depending on the plan's formulary. Some plans have fixed copays while others have percentage-based "coinsurances".
If the medication has a percentage-based coinsurance, the amount the patient has to pay is completely dependent on the drug's full cost during Initial Coverage. In the example above with the Cigna-Healthspring Rx Secure-Extra plan, if Levemir's full cost doubles, the patient's coinsurance will increase from $187.63 to $375.26 because he/she will still have to pay 20% of that doubled value. So, even though plans with a coinsurance can sometimes appear cheaper, there is always a risk that the coinsurance will fluctuate throughout the year, and there is no limit on this fluctuation.
If the medication has a fixed copay, the patient's payment can fluctuate based on the full cost of the medication, but it can never exceed the tier copay during Initial Coverage. This CMS rule is called "Lesser of Logic." If the full cost of a medication is less than the fixed copay amount, the patient will pay the full cost. If the full cost suddenly increases above the fixed copay, the patient's payment will increase to the fixed copay amount, but it will never increase above that threshold. In the example above with AARP MedicareRx Preferred, the patient will never have to pay more than $47 for Levemir during Initial Coverage, regardless of its full cost.
Since insurance companies and manufacturers control drug prices, it can be difficult for patients and pharmacists to obtain insight into when and why price hikes occur. While this can be frustrating, local pharmacies have the ability to search for cheaper therapeutic alternatives if prescription costs were to change at any point during the year. Amplicare's Formulary Lookup is a quick and easy way to do this!