New star ratings metrics that measure both Medicare Advantage plans and Part D prescription drug plan performance could prove difficult for some stand-alone prescription drug plans. While PDP plans do not receive reimbursement bonuses based on overall performance, they do face scrutiny from the Centers for Medicare & Medicaid Services if plans score less than 3 stars for three years in a row.
In 2012, CMS began grading MA plans with prescription drug coverage and PDP plans on how well members adhere to prescriptions for blood pressure, cholesterol, and diabetes. Drug adherence can work to an MA plan's benefit because better adherence by members should result in lower medical costs. However, since PDP plans have no type of medical coverage, better drug adherence by members will actually cost plans more money, without the benefit of the lower medical costs.
How well a PDP contract performs on the new drug adherence scores, which are weighted higher than most other part D measures, could drastically affect the overall star rating. For example, the Coventry's First Health Part D contract, S5768, received a poor rating of 2.5 stars. Coventry offers the Premier plan, a richer PDP plan, and the Value Plus PDP plan, a new plan that includes a preferred network arrangement, under this contract. An analysis of the 2012 ratings shows that S5768 scored a dismal 1 star, the worst rating, on adherence for oral diabetes drugs and blood pressure prescriptions.
Another difficulty that plans could encounter is when the plan's generic drug copay is more than the cost of a generic drug at a pharmacy. For instance, a member's PDP plan generic drug copay is $6; however, the member can obtain the drug at a Kroger pharmacy for $4. As a result, the member will not have his insurance card processed through the Kroger pharmacy claim system when he gets his drug filled. The PDP plan has no way to record that the member is getting the drug filled, which falsely indicates the member is non-adherent to the drug.
Because of the new focus on drug adherence, many MA plans and PDP may be inclined to lower generic prescription drug copays to $4 or less in order to capture drug claims information at pharmacies.
It's becoming more difficult for PDP plans in 2012, but it will likely get even harder in 2013. CMS has proposed that additional measures be added, such as how well Part D medication therapy management programs perform comprehensive medication reviews, which target patients with chronic conditions.
Faced with mounting regulatory, compliance, and quality hurdles, some plans may decide to get out of the PDP business altogether. CVS Caremark, one of the largest PDP plans in the country, already snapped up Universal American's stand-alone Part D business in 2011. Just last week, Health Net announced that it is selling its stand-alone Part D business to CVS Caremark. If seems as if the big PDP plans are just going to get bigger, while many of the smaller ones may just disappear.