Evaluating the Medicare Replacement Drug Demonstration

Until the Medicare Part D prescription drug benefit took effect in 2006, Medicare's coverage of outpatient prescription drugs was only through Part B and was extremely limited. Part B covers primarily intravenously or intramuscularly injected drugs that cannot be self-administered and that must be given in a physician's office or a hospital outpatient department under physician supervision.

The Medicare Replacement Drug Demonstration provided for coverage of oral or self-injectable drugs and biologicals used to treat various cancers and other serious illnesses such as rheumatoid arthritis, multiple sclerosis, and primary pulmonary hypertension that could replace Part B-covered drugs. The demonstration thus served as a bridge to Part D for beneficiaries with the demonstration-covered conditions and prescribed the demonstration-covered drugs. Cost-sharing arrangements under the demonstration were the same as for the standard Medicare Part D benefit, except that enrollees did not have to pay a monthly premium. Beneficiaries with low incomes and few assets were eligible for reduced cost-sharing. Enrollment for the demonstration began in late June 2004 and the demonstration ended December 31, 2005, with the start of Part D.

Mathematica designed and implemented a survey of enrollees to measure the demonstration's effects on satisfaction, access to care, and health outcomes. In total, 3,269 enrollees were interviewed, and an 86 percent response rate was achieved. We also analyzed interviews of outreach partners, beneficiaries, and other stakeholders to better understand the effectiveness of the various outreach strategies employed.

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