Avoiding a Medicare Part D Penalty

To appreciate the Medicare Part D Penalty and help patients avoid it, one must first understand what Medicare Part D involves.

Understanding Medicare Part D

Here are the points to keep in mind for your medical office, and it’s patients:

• Medicare Part D consists of a drug coverage plan that has a list of specific covered drugs, called a “formulary.”
• Each plan, and, therefore, each formulary, has different tiers of drugs with different prices. A lower tier drug will generally cost less.
• If a patient requires a drug from a higher tier, a prescriber can ask a plan for a lower copayment (as if it were on a lower tier).
• A plan may make changes to its formulary during the year. If they affect a patient, the patient should be informed 60 days prior to the change. OR the patient may – at the time of refill – receive notice and 60 days of drug supply under the same rules.
• The drug plan cost will vary depending on the formulary, the network it exists in, and the drugs needed.

Rules of Medicare Part D

Medicare Part D covers all commercially available vaccines and hospital outpatient drugs. The following rules apply for other coverage:

• Quantity Limits: How much drug you can get at one time is limited.
• Step Therapy: A patient must try one or more lower-tier drugs before the prescribed drug will be covered.
• Prior Authorization: A patient and prescriber must contact the drug plan before the drug is given. Sometimes the prescriber must demonstrate the necessity of the drug.

How Patients Can Avoid Medicare Pard D Penalties

It’s a beneficial idea to review this information as well as provide it to your patients so they can avoid a Medicare Part D Penalty. Anyone can opt for the other parts of Medicare but opt out of Part D, only to realize later that he or she needs drug coverage. The Medicare Part D Penalty is essentially an additional cost for opting into a drug coverage plan late.

Patients can avoid the Medicare Part D Penalty if they opt out because they have creditable prescription coverage or participate in the government program Extra Help (a Medicare program that helps those with lower incomes afford prescriptions).

Running a medical office is primarily about caring for the patients, which includes educating them about Medicare and specifically the Medicare Part D Penalty. Patients will appreciate the knowledge and potentially save money through your efforts, enhancing their loyalty to your medical practice.

To best protect your patients, you might consider outsourcing your medical billing needs to Billing Advantage. With Billing Advantage, all patient information is protected and secure in addition to prompt payment collection.