Making midyear formulary changes in drug plans

Patricia Hafermann • Benefit Specialist

Each Medicare drug plan has its own list of covered drugs (called a formulary). Many Medicare drug plans place drugs into different “tiers” on their formularies. Drugs in each tier have a different cost. During open enrollment, Medicare beneficiaries may pick a Medicare drug plan based on the drug plan’s formulary and what drugs are in each tier. Typically, clients must make this decision from October 15 – December 7. Then, they have the drug plan throughout the upcoming year. However, what happens if — in the middle of the year — a Medicare drug plan wants to change its formulary, change the drug tier, or place restrictions on the use of a drug?

A Medicare drug plan can make some changes to its formulary during the year, yet, the Centers for Medicare & Medicaid Services (CMS) does restrict what changes a Medicare drug plan may make midyear. For example:

(A) Changes not Caused by Medicare Part D Drug Plan – A Medicare drug plan may remove a drug from its formulary at any time if the Food and Drug Administration deems a drug unsafe or a manufacturer removes a drug from the market.

(B) Positive Changes for Beneficiaries – A Medicare drug plan may add drugs to its formulary, place a drug on a lower cost-sharing tier, or remove restrictions on the use of a drug at any time.

(C) Negative Changes for Beneficiaries —

1. Until March 1 of any given year, a Medicare drug plan may not remove a covered Part D drug from its formulary or change what tier the Medicare drug plan placed a drug.

2. After March 1, a Medicare drug plan may make the following two types of changes :

Maintenance changes to its formulary, such as replacing brand name drugs with new generic drugs, or modifying its formulary because of new information on drug safety or effectiveness; and

More substantial changes, including the following:

Remove a drug from its formulary;

Move a covered Part D drug to a less preferred tier status; or

Place restrictions on the use of a drug. For instance, a Medicare drug plan may add limits on how often a beneficiary may use a drug.

For these more substantial changes, CMS requires a Medicare drug plan to comply with the following protections:

(1) The Medicare drug plan cannot implement the change until CMS approves the change; and

(2) If a beneficiary has a Medicare drug plan and is currently taking the affected drug, the beneficiary is exempt from the change until January 1 of the next year. This, of course, would provide even more incentive to shop around during the annual open enrollment period.

If you have any additional questions, you may call Pat Hafermann, Elderly Benefits Specialist with the Aging and Disability Resource Center at (920) 467-4076.

Sources: Published with permission from the Legal Services Team at the Greater Wisconsin

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