Medicare Prescription Benefit Excludes Benzodiazepines

The news is met with shock or disbelief. But, believe it or not, when the Medicare Part D drug benefit debuts in January 2006, an estimated 1.7 million dual-eligible patients taking benzodiazepines covered under Medicaid will find themselves stuck with the bill.

The problem appears to be a clause buried within the 416-page Medicare Prescription Drug Improvement and Modernization Act of 2003. That clause defines the drugs for which the Part D drug benefit will pay and the drugs that are excluded. The law states that the Part D benefit will not cover“ drugs or classes of drugs, or their medical uses, which may be excluded from coverage or otherwise restricted under section 1927(d)(2), other than subparagraph (E) of such section (relating to smoking cessation agents), or under section 1927(d)(3).”

At first glance, no problem is readily apparent. It was only with the publication of the Centers for Medicare and Medicaid Services' (CMS) proposed rule in the Federal Register on August 3, 2004, implementing the new Part D drug benefit that benzodiazepines entered the picture. Herein “section 1927(d)(2)” is defined—it references Title XIX of the Social Security Act and nine specific classes of drugs that states were authorized (but not required) to exclude from their Medicaid formularies, including benzodiazepines (see box on page 50). CMS's final rule, released January 21, retains the exclusion in accord with the 2003 Medicare law.

While the exclusion applies to all Medicare beneficiaries, the impact will be felt by dual-eligible beneficiaries, who currently can obtain benzodiazepines under Medicaid. Once Part D goes into effect, they will lose that access since people who are eligible for both Medicare and Medicaid will receive prescription drug coverage under Medicare only.

CMS's final rule goes one step further than the old Medicaid statute in the Social Security Act, however. CMS regulations state, “The drugs that must be excluded from Medicare coverage are, with limited exception, drugs that may also be excluded from Medicaid coverage under section 1927(d)(2) of the Act.” And so, Medicaid's “may” became Medicare's“ must.”

The CMS final rule includes extensive comments the agency received regarding the proposed regulations, including significant concern over the exclusion of benzodiazepines. The rule notes, however, that CMS envisions at least two potential “fixes” that would allow continued coverage.“ First, Medicare Part D allows [drug plans] to provide drugs that are specifically excluded from being Part D drugs if they do so as supplemental benefits through enhanced alternative coverage. We believe that some beneficiaries with chronic conditions will choose to enroll in Part D plans that offer enhanced alternative coverage. Additionally, under Medicaid, States will be able to, at their discretion, provide coverage for a drug that is an excluded Medicare Part D drug.”