Will Medicare Part B and Part D come together?

A new CMS study released last week has revived discussions about consolidation of the Medicare Parts B and D benefits. Many of the these studies were recommended back in 2004 as part of MMA and indeed they would offer some cost savings to the Medicare program. However, there are also dramatic differences in the coverage and copayments associated with these benefits.

According to a new CMS report, consolidating benefits for three drug cohorts (anticancer, pumped insulin, and nebulizer inhalants) covered by Medicare Part B and Part D under Part D could save Medicare nearly $150 million annually, while consolidating three different drug cohorts (vaccine, injectable insulin, and metered-dose inhalers) under Medicare Part B could increase Medicare spending by $52 million annually. Medicare is considering combining payment and coverage for certain drugs under either the Part B program or the Part D program partially because of the administrative complexity of the B versus D determination process for pharmacies and medical providers.

The report, "Estimating the Effects of Consolidating Drugs under Part D or Part B, " found that while consolidation under Medicare Part D could save Medicare money, it would impact Medicare beneficiaries adversely. Because Part D has "less generous coverage rules," switching the Medicare coverage of drugs from Part B to Part D would cost beneficiaries roughly $267 in added out-of-pocket expenses. But for many specialty products the increase in patient out of pockets is dramatically higher given most Medicare beneficiaries have Medigap (or Medicare Supplemental Insurance) that covers Part B out of pocket costs for such services.