Performance Improvement 2008. How Does the Medicare Replacement Drug Demonstration Affect Patient Access to Care, Health Outcomes, and Medicare Cost-Effectiveness?


The study examined the impact of the Medicare Replacement Drug Demonstration on patient access to care and patient outcomes, and analyzed its impact on Medicare spending, detailing cost savings to Medicare due to reduced physicians´ services and hospital outpatient department services for administration of replaced drugs. Over 42,000 Medicare beneficiaries enrolled in the Demonstration.

The demonstration served a financially-vulnerable population and improved drug insurance coverage and reduced financial burden for a majority of participants. About 40 percent of participants qualified for Federal subsidies under the program with limited cost-sharing obligations. Unexpectedly, the demonstration did not provide new access to drug therapy to most participants. An estimated 62 to 76 percent of demonstration participants had been using medications covered under the demonstration prior to enrollment. Perceived improvements in health or symptoms were sometimes marked for beneficiaries who had been prior users of Part B replaceable drugs or who had been using some other non-demonstration covered drug to treat their condition prior to enrollment. The clinical reviews conducted for this evaluation found that the demonstration provided coverage for many life-extending or quality-enhancing advances in treatment relative to those covered under Part B. For the majority of early enrollees who had previously been using drugs covered under the Demonstration, the demonstration´s probable impact on health outcomes was modest. For the minority of participants who substituted Medicare replacement drugs for Part B drugs, the demonstration offered several economical alternatives for treatment, as intended. Medicare spending increased over the 16-month program. Savings due to reduced physicians´ services and hospital outpatient department services for administration of replaceable drugs were small since few demonstration participants would have been Part B drug users in absence of the demonstration.

Report Title: Report to Congress: Evaluation of the Medicare Replacement Drug Demonstration, Sponsor: CMS-ORDI, Office of Research, Development, and Information
Federal Contact: Penny Mohr, 410-786-6502
Penny Mohr
PIC ID: 8658

View full report


"PerformanceImprovement2008.pdf" (pdf, 1.29Mb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®