Getting Medicare Prescription Drug Plans to Consider Long-Term Outcomes

A new review of Medicare prescription drug plans (PDPs) suggests that these plans need incentives that will push them to consider long-term outcomes and costs because they tend to consider only short-term clinical outcomes and costs related only to the pharmacy benefit.

Greater efforts are needed to develop mechanisms to align Medicare PDP incentives with long-term outcomes and costs associated with both medical and pharmacy benefits, Anna Hung, PharmD, and Eleanor M. Perfetto, PhD, of the University of Maryland School of Pharmacy in Baltimore, concluded in the July 2016 issue of the Journal of Managed Care & Specialty Pharmacy. Presently, there are very few incentives encouraging PDPs to consider these long-term outcomes when making formulary decisions, they wrote.

The authors noted that Medicare PDPs do not cover both medical and pharmacy benefits, unlike Medicare Advantage plans. Additionally, Medicare PDPs do not retain enrollees for long periods of time; approximately 50% of enrollees in PDPs leave their original PDPs 3 years after they enroll—switching plans to save money and seek more choices in other plans. Thus, both the fragmentation of pharmacy and medical benefits and the short time horizon considered when making drug formulary decisions are the 2 main factors influencing short-term costs over long-term outcomes, the authors point out.

Hung and Perfetto used PubMed and Google to search for quality measures, payment models, and public reporting tools by using search terms such as Medicare Part D, quality improvement, quality measures, quality indicators, and formulary. Several databases and collections including the National Quality Forum and the National Quality Measures Clearinghouse were searched. Quality measures were classified into 3 categories of quality problems as set forth by the Institute of Medicine: misuse or avoidable complications preventing patients from receiving full potential benefit of a service; overuse; and underuse. Hung and Perfetto found no quality measures directly related to the formulary decision-making process specifically for Medicare PDPs, but they did use 7 quality measures indirectly related to formulary decision-making processes that were identified and used to measure underuse of medications, adherence, and misuse.

The authors concluded that Medicare Part D star ratings of quality measures and their use by CMS have potential as incentives for PDPs to consider long-term outcomes and costs associated with both medical and pharmacy benefits, although adherence measures for more than 3 chronic conditions are needed. The Medicare Plan Finder website can also be an incentive for PDPs to consider long-term outcomes and costs associated with both medical and pharmacy benefits if they add quality measures and display longer-term information on the website.

Finally, they found that URAC (which accredits health plans, pharmacy benefit management [PBM] and specialty pharmacies) PBM Accreditation standards and measures provide incentives for PBMs that contract with Medicare PDPs to consider medical outcomes and costs, although not necessarily for the long term.

However, the authors concluded that there is a need to develop more incentives for PDPs to consider long-term outcomes when making formulary decisions regarding overage; tier placement and cost sharing; and use of prior authorization, quantity limits, and step therapy.

“Successfully creating such incentives could lead to better health, better care, and lower costs in the long term,” they concluded.