There are a multitude of prescription drug plans that provide various ranges of coverage for Medicare recipients all over the United States. Based off of geographic location, preferred status, and formularies that address prescriptions uniquely, Part D insurance providers ensure that the perfect plan is available for everyone. However, there are always changes. The plans change their coverage each year, thus affecting how much Medicare patients will pay. But then there are other irregular sources of change that can cause large problems for Medicare recipients: plan suspensions and acquisitions.
To begin, let’s look at how a plan can be suspended. CMS (Centers for Medicare and Medicaid Services) will enforce actions against an insurer if they:
- Substantially fail to comply with program and/or contract requirements
- Are carrying out its contract with CMS in a manner that is inconsistent with the efficient and effective administration of the Medicare Part C and Part D program requirements
- No longer substantially meets the applicable conditions of the Medicare Part C and D program.
This can result in a civil money penalty (a fine), intermediate sanctions (i.e. marketing, enrollment, & payment suspensions), or contract termination. The latter 2 are the ones that affect Medicare patients the most. If unaware of the sanctions or terminations, an individual could continue living under the assumption that they were covered by their Part D insurer when in reality they are not or they could just forget to enroll in a new plan. This means that their costs would drastically increase, as they would be paying the full out-of-pocket price for their prescriptions.
This year, there have only been 3 suspensions, SilverScript Insurance Company, Universal Health Care Insurance Company (Georgia only) and Smart Insurance Company.
A full list of enforcement actions against insurers can be found here.
While suspensions comprise one side of the issue, acquisitions are the other. So what do they mean for the Medicare recipient? Let’s look at some examples.
On January 1, 2013, CommunityCCRx, a Part D plan insurer, was acquired by SilverScript Insurance Company. This meant that automatically, thousands of Medicare recipients were converted into a new plan, a plan that could have resulted in less coverage and an increase in their out-of-pocket costs due to a change in the formulary. If they were unaware of the change and did not swap into a different plan, then this transition resulted in a financial loss for CommunityCCRx members. Note, SilverScript is suspended and will not be available for the enrollment period.
Similarly, on September 9, SmartD, another suspended plan, was acquired by ExpressScripts. Just like with CommunityCCRx, the former patients of SmartD were automatically transitioned into new plans. But not just a few individuals, around 87,000, according to ExpressScripts.
So what does all of this mean?
Well there is the obvious hassle that recipients have to go through again to search for a new plan and ensure that that they are in the optimum plan that provides the best coverage and price, whether they were automatically converted or lost coverage due to plan suspension.
But then there are other issues. For one, the ExpressScripts Part D plan is typically not the best plan for non-mailorder drugs, so automatically transitioned recipients who do not receive medications this way will be impacted.
There is also an effect on independent pharmacies. With the suspension of SilverScript, there is no longer a mainly ‘independent friendly’ plan, as CommunityCCRx use to be the ‘friendly’ one. This is the first time that this has occurred in over 5 years.</p>
Another issue is that suspended plans will not show up in CMS data. This means that when finding and comparing plans, the suspended plans will not be listed and you cannot compare your costs to another plan that you need to switch into for coverage.
Overall, this information reveals how crucial it is to be up to date with the status of your plan. While formularies and costs change every year, suspensions and acquisitions could affect you drastically more. So from October 15 to December 7, make sure to see your friendly neighborhood pharmacist and discuss your Part D plan!