The Social Security Act gives the Secretary of Health and Human Services flexibility to require Medicare prescription drug plans to cover all products in select classes that meet certain criteria:

• First, there must be a clinical reason for all drugs in these classes to be covered “due to unique chemical actions and pharmacological effects.”
• Second, restricted access to these drugs “would have major or life-threatening clinical consequences.”

Throughout the Part D program’s history, these classes have remained the same: anticonvulsants, antidepressants, antineoplastics, antiretrovirals, antipsychotics, and immunosuppressants. These are known as the “protected classes.” Both standalone Part D plans (PDPs) and Medicare Advantage prescription drug plans (MA-PDs) must comply with these coverage rules.

Over the years, the 6 protected classes have garnered scrutiny from some stakeholders. Last year, the CMS introduced a proposed rule that would give plan sponsors flexibility to exclude certain protected class drugs from formularies. The CMS did not include this provision in the final rule.

Plans that predominately cover beneficiaries eligible for the LIS have fewer tools to manage utilization of the benefit relative to other Part D plan sponsors. All Part D plans may apply utilization management for new starts of any protected class drug, excluding antiretrovirals. However, Part D plans with mostly LIS enrollees have limited ability to manage utilization with different formulary tiers and varied cost sharing amounts, since the LIS program standardizes cost sharing at established copayment amounts each year.

Thus, Avalere examined a select set of MA-PDs and PDPs using the Landscape and Plan and Premium Files (excluding chronic and institutional SNP, national PACE, and 1876 cost play types) and used 2017 Prescription Drug Event data to calculate per-member, per-month (PMPM) drug spending in the 6 protected classes for PDPs and MA-PDs across 2 categories:

• Beneficiaries who receive LIS
• Beneficiaries who do not receive the LIS

These figures are displayed in the table below.

The results indicate that for the select set of plans included in the analysis with high LIS enrollment, PMPM spending was often higher for PDPs than MA-PDs. For both PDPs and MA-PDs in the analysis, spending was mostly higher for those with LIS than for those without LIS. PDPs included in the analysis spent the most PMPM on antipsychotics for their LIS population and on antineoplastics for their non-LIS population. MA-PDs included in the analysis spent the most PMPM on antiretrovirals for both their LIS and non-LIS enrollees compared to the other protected classes.

As policymakers and stakeholders consider future changes to the program, a clear understanding of utilization patterns across the 6 protected classes and across different types of Part D plans is vital to ensuring that policy changes are in line with the dynamics that all Part D plans manage.

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Methodology

Using plan enrollment levels from CMS’ Landscape and Plan and Premium Files for Medicare Plans Offering Part D Coverage, Avalere identified a cohort of PDPs and MA-PDs with at least 75% LIS enrollment. Chronic and Institutional SNP, National PACE, and 1876 Cost plan types were excluded from the analysis, as well as plans operating in US territories. Avalere then identified LIS and non-LIS beneficiaries based on the cost-share group code from the Medicare beneficiary summary file and excluded beneficiaries without enrollment in the same Part D plan throughout the year, residing outside the 50 states and DC, or without consistent LIS status during the year.

Avalere analyzed 2017 Part D prescription drug event data under a CMS research data use agreement. Avalere mapped Part D drugs listed under USP MMG-Formulary Reference File (FRF) to MediSpan. The USP MMG-FRF maps the USP MMG v7.0 to the CMS 2017 FRF to create a comprehensive list of drugs that fall under each class of the USP MMG v7.0. For each cohort of drugs included in the analysis, Avalere analyzed drug costs and calculated PMPM costs for LIS and non-LIS beneficiaries across the selected PDPs and MA-PDs.