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Impact of Protected Class Utilization Management in Medicare Part D

Summary

Health plans, including Medicare prescription drug plans, commonly apply utilization management (UM) tools to manage spending on prescription drugs.

While UM can reduce costs for plans and premiums for beneficiaries, it may also make it challenging for enrollees to access needed medications. In Medicare, UM is allowed in 5 of the 6 protected classes for patients starting treatment for the first time (new starts), where plans must cover all unique products.

Avalere conducted an analysis to determine the relationship between the application of UM and prescription drug utilization in Medicare Part D across those 5 protected classes and 2 comparator nonprotected classes. The results demonstrate that beneficiary utilization of prescription medications is substantially lower when the formulary applies UM to that product compared to when there is no UM. Specifically, in 2018, utilization was 75% lower for products in those classes when UM was applied than when those products were covered without UM. The findings also suggest applying UM in protected classes also leads to a larger reduction in utilization compared to when patients are required to go through the exceptions process to access products in the non-protected classes studied. While the impact varies by drug class and by year, the findings show a link between the application of UM and lower utilization of prescription drugs in the protected classes. Looking ahead, this finding has implications for any future potential changes to antiretrovials, the 1 remaining protected class for which the Centers for Medicare & Medicaid Services does not permit UM.

Read more in our white paper on protected class utilization management.

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