1. Supplementing PACE through Medicare Part D
Thomas Snedden
Director
Pennsylvania PACE Program
State Coverage Initiatives
Invitational Summit Conference
October 7, 2004
Philadelphia, PA

2. Pennsylvania Pharmaceutical Assistance Contract for the Elderly (PACE)
-- Implemented 1984
-- Funded by state lottery
-- Currently serving 290,000 older Pennsylvanians
-- Eligibility increase implemented January 1, 2004
-- Gross annualized expenditure of $480 Million
-- Projected 2005 enrollment 335,000

3. Program Eligibility Criteria
-- Sixty-five years of age or older
--Pennsylvania resident
--Limited income
PACE =< $14,500 (Single)
=< $17,700 (Married)
PACENET =< $23,500 (Single)
=< $31,500 (Married)
-- Not enrolled in Medicaid Rx
-- No asset test
-- Criteria makes eligible two-thirds of Pennsylvania’s 65+ population (1.25 million out of 1.9 million)

4. Program Benefit Structure
PACE
-- First dollar coverage
-- Low copays ($6 generics / $9 brands)
state share for average participant was $2,189
PACENET
-- $40 monthly deductible
-- $8 generic copay and $15 brand copay
state share for average participant was $1,249
BOTH PROGRAMS
-- Open formulary
-- Open network
-- Open enrollment
-- No quarterly or annual dollar limits on enrollees
-- Concurrent drug utilization review (with mandatory edits) and step therapy
requirements

5. Program Provider Environment
-- Open Pharmacy Network
(3,021 Providers: 1,701 chains; 1,131 independents;
189 others)
-- No formulary or Preferred Drug List (PDL)
-- Average Wholesale Price (AWP) – 10% + $4.00
-- On-line, real time claims adjudication
(No administrative transaction fees)
-- No mail-order incentives or mandates
-- Seventeen day turnaround on claim remittance deposit

6. The “PACE Cardholder” -- 79 years old -- widow
-- four or five maintenance medications
(anti-inflammatory, anti-platelet, osteoporosis treatment, lipid-lowering agent, and gastrointestinal agent)
-- less than 10th grade education
-- lives alone in a private residence
-- and overweight

7. Medicare Prescription Drug Discount Card
-- $600 annual Transitional Assistance(TA) Rx credit for Medicare beneficiaries with incomes less than 135% of FPL
,000 PACE enrollees meet TA criteria (30,000 of which are also enrolled in Medicare HMO)
-- PACE pharmacy benefit administrator (First Health) aapproved as exclusive Medicare card sponsor in effort to facilitate TA enrollment of qualified PACE enrollees
-- PACE will “auto-enroll” TA eligibles, unless enrolled in Medicare HMO
-- PACE pays TA coinsurance and waives PACE copay for its TA enrollees
-- Net PACE savings of $150 million in ’04 / ’05

8. ` Medicare Part D Rx -- Need final regs and Part D carriers
-- Maintain PACE as stand alone benefit
-- Auto-enroll low income subsidy eligibles in exclusive part D carrier
-- Establish seamless COB interface
-- Offset $200 million in annual PACE costs
-- Expand PACE eligibility in 2006