1 Part D: Implications to Home and Community- Based Waivers Charles Milligan, Executive Director Center for Health Program Development and Management University of Maryland, Baltimore County October 7, 2004

2 Areas to be Discussed Formulary Distribution channels Transition period HCBS Waiver Case Managers Transportation Risk of Cost Shifting/Institutionalization

3 Formulary In FY 04, Maryland had 3,147 dual eligibles in two waivers. The top 10 Rx: Top 10 DrugsNo. Beneficiaries FUROSEMIDE996 PREVACID757 LISINOPRIL666 NORVASC568 LIPITOR513 PLAVIX467 CIPRO426 ZITHROMAX413 ZOLOFT401 AMBIEN394

4 Formulary (con’t) But that’s not the challenge. The challenge is that these 3,147 beneficiaries: Received a total of 218,954 prescriptions in FY 04 (an average of 69.6 each); Received 1,630 unduplicated medications; and 399 separate medications were received by only ONE beneficiary each

5 Distribution Channels Medicaid beneficiaries receive drugs from many sources;network issues will arise: Over-reliance on mail-order for maintenance medications could cause problems

6 Transition Period Will it be affordable, and considered not to be Medicaid fraud, for a state to dispense a 90 day supply of Rx in December 2005? Even assuming auto-enrollment occurs, can/will Medicare plans approve all of the medications necessary, on a timely basis, for HCBS beneficiaries to remain in the community? The number of people, and medications they take which must be transitioned, is extensive

7 Transition Period In FY 04, 68% of HCBS Dual Eligibles in Maryland Received Four or More Drugs Per Month

8 HCBS Waiver Case Managers At present, HCBS waiver case managers generally do not need to coordinate access to Rx for HCBS beneficiaries across multiple vendors and formularies If this role is incorporated into the job description of HCBS waiver case managers, it might change the caseload ratios and/or payment rates related to case management services

9 Transportation Medicaid provides non-emergency transportation only to ensure access to Medicaid-covered benefits – in January 2006 this will not include Rx for dual eligibles Thus, once Rx no longer is covered by Medicaid, HCBS waiver beneficiaries may have more difficulty simply picking up their medications

10 Risk of Cost Shifting and Institutional Care For HCBS beneficiaries covered for Rx under Medicare, the financial incentive to spend funds on Rx to avoid institutional care will not be aligned across payors For institutional residents covered for Rx under Medicare, the financial incentive to develop good community-based plans of care, which depend on Rx, will not be aligned across payors

11 Conclusion The formularies AND how the Rx’s are distributed both matter Access to medications may depend on transportation and case managers, where Medicaid will not have any formal role Thoughtful transition planning will be difficult, and might benefit from 90 day supplies in 12/05, which might both be expensive and constitute Medicaid fraud The financial incentives to spend money on Rx to keep people out of nursing homes are not aligned across payors