DEPARTMENT OF HEALTH Al"ID HUMAN SERVICES 
OFFICE OF INSPECTOR GENERAL 
WASHINGTON, DC  20201 
JUN  - 7 2012 

TO:  Marilyn Tavenner 
Acting Administrator 

Centers for Medicare & Medicaid Services 

FROM:  Stuart Wright 
Deputy Inspector General 
for Evaluation and Inspections 
SUBJECT: 	 Memorandum Report:  Part D Plans Generally Include Drugs Commonly 
Used by Dual Eligibles:  2012,OEI-05-12-00060 
This memorandum report fulfills the annual reporting mandate from the Patient 
Protection and Affordable Care Act of2010 (ACA) for 2012.  The ACA requires that the 
Office of Inspector General (OIG) conduct a study ofthe extent to which formularies 
used by stand-alone prescription drug plans (PDP) and Medicare Advantage prescription 
drug plans (MA-PD) under Medicare Part D include drugs commonly used by full-benefit 
dual-eligible individuals (i.e., individuals who are eligible for both Medicare and 
Medicaid and who receive full Medicaid benefits and assistance with Medicare premiums 
and cost-sharing). 1  Pursuant to the ACA, OIG must annually issue a report, with 
recommendations as :appropriate.  This is the second report the OIG has produced to meet 
this mandate.  For the relevant text ofthe ACA, see Appendix A. 
SUMMARY 
As a result ofthe Medicare Prescription Drug, Improvement, and Modernization Act of 
2003 (MMA), comprehensive prescription drug coverage under Medicare Part D is 
available to all Medicare beneficiaries through PDPs and MA-PDs (hereinafter referred 
to collectively as Part D plans).2 
For beneficiaries who are eligible for Medicare and Medicaid (hereinafter referred to as 
dual eligibles), Medicare covers Part D plan premiums, deductibles, and other 
cost-sharing up to a determined premium benchmark that varies by region.  If dual 
eligibles enroll in Part D plans with premiums higher than the regional benchmark, they 
are responsible for paying the premiurh amounts above that benchmark. 
I ACA, P.L. 111-148  33 13  (a), 42 U.S.c.  1395w-101 note. 

2 MMA, P.L. 108-173  101, Social Security Act,  I 860D-I(a), 42 U.S.C.  1395w-lOl(a). 
 Page 2  Marilyn Tavenner 
To control costs and ensure the safe use of drugs, Part D plans are allowed to establish 
formularies from which they may omit drugs from prescription coverage and control drug 
utilization through utilization management tools.3  These tools include prior 
authorization, quantity limits, and step therapy.4     
 
The Centers for Medicare & Medicaid Services (CMS) annually reviews Part D plan 
formularies to ensure that they include a range of drugs in a broad distribution of 
therapeutic classes.  CMS also assesses the utilization management tools present in each 
formulary. 
 
For this memorandum report, we determined whether the 272 unique formularies used by 
the 3,107 Part D plans operating in 2012 cover the 200 drugs most commonly used by 
dual eligibles.  We also determined the extent to which those commonly used drugs are 
subject to utilization management tools.  To create the list of the 200 drugs most 
commonly used by dual eligibles, we used the 2008 Medicare Current Beneficiary 
Survey (MCBS).  Of these 200 drugs, 191 are eligible for Part D prescription drug 
coverage and 9 are not eligible for coverage under Part D.5  
 
Overall, we found that the rate of Part D plan formularies inclusion of the 191 drugs 
commonly used by dual eligibles is high, with some variation.  On average, Part D plan 
formularies include 96 percent of the 191 commonly used drugs.  In addition, more than 
60 percent of the commonly used drugs are included by all Part D plan formularies.  
These results are largely unchanged from OIGs findings from 2011, as stated in the 
mandated report for that year.6  
 
We also found that from 2011 to 2012, plan formularies increased the proportion of 
unique drugs subject to utilization management tools.  On average, formularies applied 
utilization management tools to 24 percent of the unique drugs we reviewed in 2012, 
compared to 19 percent of the unique drugs we reviewed in 2011. 
   
                                                 
3 A formulary is a list of drugs  covered by a Part D plan.  Part D plans can exclude drugs from their 
formularies and can control utilization for formulary-included  drugs within certain  parameters.  Social 
Security Act  1860D-4(b) and  (c), 42  U.S.C.  1395w-104(b) and  (c).   
4 Prior authorizationoften required for very expensive drugsrequires that physicians obtain approval  
from Part D plans to  prescribe a specific drug.  Quantity limits are intended to ensure that beneficiaries 
receive the proper dose and recommended duration of drug therapy.  Step therapy is the practice of 
beginning drug therapy for a medical condition with the most cost-effective or safest  drug therapy and 
progressing if  necessary to more costly or  risky drug therapy. 
5 Eight of the two hundred commonly used  drugs are statutorily excluded, and one is  no longer available in  
the United States. 
6 OIG,  Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles,  OEI-05-10-00390, 
April 2011. 
Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles:   2012 (OEI-05-12-00060)   Page 3  Marilyn Tavenner 
BACKGROUND 
 
The Medicare Prescription Drug Benefit 
Beginning in 2006, the MMA made comprehensive prescription drug coverage under 
Medicare Part D available to all Medicare beneficiaries.7  Medicare beneficiaries 
generally have the option to enroll in a PDP and receive all other Medicare benefits on a 
fee-for-service basis, or to enroll in an MA-PD and receive all of their Medicare benefits, 
including prescription drug coverage, through managed care.  As of February 2012, 
33 million of the 48 million Medicare beneficiaries were enrolled in a Part D plan.8, 9   
 
Part D plans are administered by private companies, known as plan sponsors, that 
contract with CMS to offer prescription drug coverage in one or more PDP or MA-PD 
regions. CMS has designated 34 PDP regions and 26 MA-PD regions.10  In 2012, plan 
sponsors offer 3,107 unique Part D plans, with many plan sponsors offering multiple 
Part D plans. 
 
Dual Eligibles Under Medicare Part D 
Approximately 9 million Medicare beneficiaries are dual eligibles.  About 7 million dual 
eligibles, referred to as full-benefit dual eligibles, receive full Medicaid benefits and  
assistance with Medicare premiums and cost-sharing.11  Other dual eligibles receive 
assistance with only their Medicare premiums  or cost-sharing, depending on their level of 
income and assets. 
 
Dual eligibles are a particularly vulnerable population.  Overall, most dual eligibles have 
very low incomes:  55 percent have annual incomes below $10,000, compared to 
6 percent of all other Medicare beneficiaries.  Additionally, dual eligibles are in worse  
health than the average Medicare beneficiary:  half are in fair or poor health, twice the 
rate of others in Medicare.12  Because of their health needs, dual eligibles typically use 
more prescription drugs and health care services in general than other Medicare 
beneficiaries. 
 
Until December 31, 2005, dual eligibles received outpatient prescription drug benefits 
through Medicaid. In January 2006, Medicare began covering outpatient prescription 
drugs for dual eligibles through Part D plans.13    
 
                                                 
7  MMA, P.L. 108-173  101, Social Security Act,  1860D-1(a), 42 U.S.C.  1395w-101(a). 
 
8 CMS, Medicare Advantage, Cost, PACE, Demo, and Prescription  Drug Plan  Contract ReportMonthly 
 
Summary Report  (data as of February 2012).  Accessed at http://www.cms.hhs.gov  on February 27, 2012. 

9 Medicare Board of Trustees, The 2011 Annual Report of  the Boards of  Trustees of  the Federal Hospital 

Insurance and Federal Supplementary Medical Insurance Trust Funds. Accessed at 

http://www.cms.hhs.gov  on March 12, 2011. 

10 CMS, Prescription Drug Benefit Manual (PDBM), Pub. 100-18, ch. 5, Appendixes 2 and 3.  Accessed at 

http://www.cms.hhs.gov  on  January 23, 2012.  

11 Kaiser Family Foundation,  Dual Eligibles:   Medicaids Role for Low-Income Beneficiaries, May 2011.  

Accessed at http://www.kff.org on  January  23, 2012.  

12 Ibid.  

13  MMA, P.L. 108-173  101.  

Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles:   2012 (OEI-05-12-00060)   Page 4  Marilyn Tavenner 
Medicare covers Part D plan premiums, deductibles, and other cost sharing for dual 
eligibles up to a determined premium benchmark.  The benchmark is a statutorily defined 
amount that is based on the average premium amounts for Part D plans for each 
region.14, 15  If dual eligibles enroll in Part  D plans with premiums higher than the 
regional benchmark, they are responsible for paying the premium amounts above that 
benchmark.16    
 
Dual eligibles assignment to Part D plans.  When individuals become eligible for both 
Medicare and Medicaid, CMS randomly assigns those individuals to PDPs unless they 
have elected a specific Part D plan or have opted out of Part D prescription drug 
coverage.17  CMS assigns dual eligibles to PDPs that meet certain requirements, such as 
having a premium at or below the regional benchmark amount and offering basic 
prescription drug coverage (or equivalent).18  Basic prescription drug coverage is defined 
in terms of benefit structure (initial coverage, coverage gap, and catastrophic coverage), 
and costs (initial deductible and coinsurance). 
 
Some dual eligibles may be randomly assigned to PDPs that do not cover the specific 
drugs they use. However, unlike the general Medicare population, dual eligibles can 
switch plans at any time to find Part D plans that cover the prescription drugs they 
require.19  When dual eligibles change plans, prescription drug coverage for their new 
Part D plans becomes effective at the beginning of the following month. 
 
CMS annually reassigns some dual eligibles to new PDPs if their current PDPs will have 
premiums above the regional benchmark premium for the following year.20  CMS 
reassigns dual eligibles who were randomly assigned to their current PDPs to new PDPs 
that will have premiums at or below the regional benchmark premium.21  In addition, 
CMS notifies dual eligibles who elected their current Part D plans that their plans will 
have premiums above the regional benchmark premium.  According to CMS, for 2012 
CMS reassigned approximately 823,000 Medicare beneficiaries, including but not 
exclusively dual eligibles, because of premium increases.  
 
   
                                                 
14  42  CFR  423.780(b)(2)(i).  

15 Social Security Act,   1860D-14(a)(3)(f), 42 U.S.C.  1395w-114(a)(3)(f).  Dual eligibles residing in  

territories are not eligible to receive cost-sharing  assistance from  Medicare.  As  such, there are  no 
 
benchmarks for Part D plans offered in the territories.  

16 Patient Protection and Affordable Care Act  (ACA),  P.L. 111-148  3303, Social Security Act, 

  1860D 14(a)(5),  42  U.S.C.   1395w-114(a)(5).  The ACA established a de minimis premium policy, 

whereby a Part D plan may elect to charge dual eligibles the benchmark premium amount if the Part  D 

plans basic premium  exceeds the regional benchmark by a de minimis amount. For 2012, CMS set the de 

minimis amount at $2 above the regional  benchmark. 
 
17  PDBM, ch.  3,  40.1.4.  

18 Ibid.  

19 Ibid.,   30.3.2.  In  general, Medicare beneficiaries can switch Part D plans  only once a year during a 

defined enrollment period.  

20  Ibid.,  40.1.5. 
  
21 Ibid.  

Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles:   2012 (OEI-05-12-00060)   Page 5  Marilyn Tavenner 
Part D Prescription Drug Coverage 
Under Part D, plans can establish formularies from which they may exclude drugs and 
control drug utilization within certain parameters.22  These parameters are intended to 
balance Medicare beneficiaries needs for adequate prescription drug coverage with 
Part D plans needs to contain costs.  Generally, a formulary must include at least two 
drugs in each therapeutic category or class.23, 24  In addition, Part D plans must include 
Part D-covered drugs in certain categories and classes.25  
 
Part D plans may also control drug utilization by applying utilization management tools.  
These tools include requiring prior authorization to obtain drugs that are on plan 
formularies, establishing quantity limits, and requiring step therapy.26  Utilization 
management tools can help Part D plans and the Part D program limit the cost of drug 
coverage by placing restrictions on the use of certain drugs.   
 
In addition to these drug coverage decisions made with regard to individual formularies, 
certain categories of drugs are excluded from Medicare Part D prescription drug coverage 
as mandated by the MMA.27  For example, prescription vitamins and mineral products, 
nonprescription drugs, barbiturates, and benzodiazepines are excluded from Part D 
prescription drug coverage.28  
 
CMS Efforts To Ensure Prescription Drug Coverage  
Formulary review. CMS annually reviews Part D plan formularies to ensure that they 
include a range of drugs in a broad distribution of therapeutic categories or classes and  
include all drugs in specified therapeutic categories or classes.29  During this review, 
CMS analyzes formularies coverage of the drug classes most commonly prescribed for 
the Medicare population. CMS intends for Part D plans to cover the most widely used 
medications, or therapeutically alternative medications (e.g., drugs from the same  
therapeutic category or class), for the most common conditions.  CMS uses Part D 
prescription drug data to identify the most commonly prescribed classes of drugs.30  
 
                                                 
22 A formulary is a list of drugs  covered by a Part D plan.  Part D plans can exclude drugs from their 

formularies and can control utilization for formulary-included  drugs  within certain  parameters.  Social 

Security Act  1860D-4(b) and  (c), 42  U.S.C.  1395w-104(b) and  (c).   

23 PDBM, ch.  6,  40.2.1.  

24 Therapeutic categories or classes classify  drugs according to their most common intended  uses.  For
  
example, cardiovascular agents compose a therapeutic class intended to affect the rate or  intensity of  

cardiac contraction, blood  vessel diameter, or  blood volume.  

25 ACA, P.L. 111-148  3307, Social Security Act,  1860D 4(b)(3)(G),  42 U.S.C.  1395w 104(b)(3)(G). 

26 Prior authorization, often required for very  expensive drugs, requires that  physicians obtain approval 
 
from Part D plans to  prescribe a specific drug.  Quantity limits are intended to ensure that beneficiaries 

receive the proper dose and recommended duration of drug therapy.  Step therapy is the practice of 

beginning drug therapy for a medical condition with the most cost-effective or safest  drug therapy and 

progressing if  necessary to more costly or  risky drug therapy.  PDBM, ch. 6,  30.2.2.  

27  MMA, P.L. 108-173  101, Social Security Act,  1860D-2(e), 42 U.S.C.  1395w-102(e). 
  
28 Social Security Act   1860D-2(e)(2), 1927(d)(2), 42  U.S.C.  1395w-102(e)(2),  1396r-8(d)(2).  

29  PDBM, ch. 6,  30.2.1 and 30.2.5.  

30  Ibid.,  30.2.7. 
  
Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles:   2012 (OEI-05-12-00060)   Page 6  Marilyn Tavenner 
CMS also assesses each formularys utilization management tools to ensure consistency 

with current industry standards and with standards that are widely used with drugs for the 

elderly and people with disabilities.31, 32, 33
  
 
Exceptions and appeals process. CMS has implemented an exceptions and appeals 

process whereby beneficiaries can request coverage of nonformulary drugs.  

Beneficiaries apply to their Part D plans for exceptions to obtain coverage of 

nonformulary drugs.  Generally, Part D plans must make determinations within 72 hours 

or, for expedited requests, within 24 hours.34  If their plans make negative determinations, 

beneficiaries have the right to appeal.35  If their Part D plans deny their appeals, 

beneficiaries would need to get prescriptions from their physicians for therapeutically 

alternative drugs that are covered by their plans. 

 
Transitioning new enrollees to Part D. CMS requires that Part D plans establish a 

transition process for new enrollees (including dual eligibles) who are transitioning to
  
their respective Part D plans either from different Part D plans or from other prescription 

drug coverage. During Medicare beneficiaries first 90 days under a new Part D plan, the 

new plan must provide one temporary fill of a prescription when beneficiaries request 

either a drug that is not in the plans formulary or a drug that requires prior authorization 

or step therapy under the formularys utilization management tools.36  The temporary fill 

accommodates beneficiaries immediate drug needs the first time they attempt to fill a 

prescription. The transition period also allows beneficiaries time to work with their 

prescribing physicians to obtain prescriptions for therapeutically alternative drugs or to 

request formulary exceptions from Part D plans. 

 
Related Office of Inspector General Work 
In 2006, OIG published a report assessing the extent to which PDP formularies included 
drugs commonly used by dual eligibles under Medicaid.  The study found that PDP 
formularies included between 76 and 100 percent of the 178 drugs commonly used by 
dual eligibles under Medicaid prior to the implementation of Part D.  Approximately half 
of the 178 commonly used drugs were covered by all formularies.37  
 
In 2011, OIG issued the first annual mandated memorandum report examining dual 
eligibles access to drugs under Medicare Part D.38  In the current memorandum report, 
we compare the results from 2011 and 2012. 
                                                 
31PDBM, ch. 6,  30.2.2. 
 
32  Ibid.,  30.2.7. 
 
33 CMS looks to  appropriate guidelines from expert  organizations such as the National Committee for 

Quality Assurance, the Academy of Managed Care Pharmacy, and the National Association of Insurance 

Commissioners.  
 
34  PDBM, ch. 18,   130.1 and  130.2.  
 
35  PDBM, ch. 18,  60.1.  

36 Ibid., ch. 6,  30.4.4.  

37 OIG,  Dual Eligibles Transition:  Part D Formularies Inclusion of  Commonly Used Drugs, 

OEI-05-06-00090, January 2006.  

38 OIG,  Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles, OEI-05-10-00390, 

July 2011. 

Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles:   2012 (OEI-05-12-00060)   Page 7  Marilyn Tavenner 
METHODOLOGY 
 
Scope 
As mandated in the ACA, this study assessed the extent to which drugs commonly used 
by dual eligibles are included by Part D plan formularies.  To make this assessment, we 
evaluated formularies for Part D plans operating in 2012.  As part of our assessment, we 
included dual eligibles enrollment data from March 2012, the most recent enrollment 
data available from CMS at the time of our study.  We also compared the results of our 
2012 study with those of our 2011 study.39    
 
The ACA did not define which drugs commonly used by dual eligibles we should review.  
We defined drugs commonly used by dual eligibles as the 200 drugs with the highest 
utilization by dual eligibles as reported in the 2008 Medicare Current Beneficiary Survey 
(MCBS). We used the MCBS because it contains drugs that dual eligibles received 
through multiple sources (e.g., Part D, Medicaid, and the Department of Veterans 
Affairs) and, as such, it provides a comprehensive picture of drug utilization.  Of the 
200 most commonly used drugs identified using the MCBS, 191 are eligible for coverage 
under Part D.  For purposes of this memorandum report, we refer to these 191 drugs 
eligible for coverage under Part D as the most commonly used drugs. 
 
The list of 191 commonly used drugs referenced in this 2012 memorandum report is 
similar but not identical to the list of drugs referenced in the 2011 memorandum report.  
Specifically, of the 191 drugs commonly used by dual eligibles listed in the 2011 report, 
184 drugs (92 percent) are also listed in this 2012 report.   
 
Both the 2011 and 2012 studies went beyond the ACAs mandate by reviewing drug 
coverage for all dual eligibles under Medicare Part D, rather than only for full-benefit 
dual eligibles.  With the data available for this study, we could not confidently identify 
and segregate full-benefit dual eligibles and the drugs they used from the total population 
of dual eligibles. 
 
We also went beyond the ACAs mandate in both the 2011 and 2012 reports by 
examining the utilization management tools that Part D plan formularies apply to the 
drugs commonly used by dual eligibles.  These tools may affect dual eligibles access 
even in cases where formularies include the commonly used drugs.  Analyzing the extent 
to which Part D plan formularies apply these tools to drugs commonly used by dual 
eligibles allows us to provide a comprehensive picture of Part D plan formularies  
coverage of, and dual eligibles access to, those drugs. 
 
Data Sources 
MCBS.  We used 2008 MCBS Cost and Use data to create a list of 200 drugs commonly 
used by dual eligibles. The MCBS Cost and Use data contain information on hospitals, 
physicians, and prescription drug costs and utilization.  The 2008 MCBS Cost and Use 
data are the most recent data available.   
                                                 
39 OIG,  Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles, OEI-05-10-00390,   
April 2011. 
Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles:   2012 (OEI-05-12-00060)   Page 8  Marilyn Tavenner 
 
The MCBS is a CMS-conducted continuous, multipurpose survey of a representative 
national sample of the Medicare population, including dual eligibles.  Sampled Medicare 
beneficiaries are interviewed three times per year and asked what drugs they are taking 
and whether they have started taking any new drugs since the previous interview.  The 
MCBS also includes Part D prescription drug events for surveyed Medicare beneficiaries.  
In 2008, the MCBS surveyed 11,723 Medicare beneficiaries, of which 2,229 were dual 
eligibles who had used prescription drugs during the year (out of a total of 
2,234 dual-eligible survey respondents). 
 
First Databank National Drug Data File.  We used the November 2011 First DataBank 
National Drug Data File to identify the drug product information for the drugs on our list 
of 200 drugs commonly used by dual eligibles.  The National Drug Data File is a 
database containing informationsuch as drug name, therapeutic class, and the unique 
combination of active ingredientsfor each drug defined by the Food and Drug 
Administrations National Drug Code (NDC).40  
 
Part D plan data. In December 2011, we collected from CMS the plan and formulary 
data for Part D plans operating in 2012. The 2012 Part D plan data provide information 
such as the State in which a Part D plan is offered, whether the Part D plan is a PDP or an 
MA-PD, and whether the Part D plan premium is below the regional benchmark.  The 
2012 Part D formulary data include Part D plans formularies and utilization management 
tools. In 2012, there are 272 unique formularies offered by the 3,107 Part D plans.   
 
We also collected 2012 Part D plan enrollment data.  These data provide the number of 
dual eligibles enrolled in each Part D plan as of February 2012.   
 
Determining the Most Commonly Used Drugs 
To determine the drugs most commonly used by dual eligibles, we took the following 
steps: 
 
1. 	  Created a list of all drugs  reported by dual eligibles surveyed in the MCBS.  We  
excluded respondents from territories because they are not eligible to receive 
cost-sharing assistance under Part D. There were 159,046 drug events listed for 
2,229 dual eligibles in the MCBS. 
 
2. 	  Collapsed this list to a list of drugs based on their active ingredients, using the 
Ingredient List Identifier located in First DataBanks National Drug Data File.  
For example, a multiple-source drug such as fluoxetine hydrochloride (the active 
ingredient for the multiple-source brand-name drug Prozac) has only one entry on 
our list, covering all strengths of both the brand-name drug Prozac and the generic 
versions of fluoxetine hydrochloride available.  From this point forward, unless 
otherwise stated, we will use the term drug to refer to any drug in the same  
Ingredient List Identifier category, and the term unique drug to refer to an NDC 
                                                 
40 An  NDC is a three-part universal identifier that specifies the drug manufacturers name, the drug form  
and strength, and the package size. 
Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles:   2012 (OEI-05-12-00060)   Page 9  Marilyn Tavenner 
corresponding to a drug, as a given drug can have multiple NDCs.  This process 
left 158,544 drug events associated with 880 drugs.  There were 502 drug events 
in the MCBS that could not be matched with an Ingredient List Identifier in First 
DataBanks National Drug Data File. 
 
3. 	  Ranked all drugs by their frequency of utilization based on weighting from the 
MCBS sample design.   
 
4. 	  Selected the 200 drugs with the highest utilization by dual eligibles.  For a full list 
of the top 200 drugs, see Appendix B. 
 
5. 	  Removed all drugs excluded under Part D.  Of the 200 drugs with the highest 
utilization, 191 are eligible under Part D, 8 fell into drug categories excluded 
under Part D, and 1 is no longer available in the United States.  For details on the 
nine excluded drugs, see Appendix C. 
 
Formulary Analysis 
We analyzed the 272 unique Part D plan formularies to determine formulary inclusion 
rates for the 191 drugs commonly used by dual eligibles.  We counted a drug as included 
in a Part D plans formulary if the formulary included the active ingredient category.  
When a drug included multiple ingredients that could be dispensed separately and 
combined by the patient to the same effect as the combined drug, we treated the drug as 
included if the ingredients were included in the formulary either separately or in 
combination.   
 
Utilization management tools. In addition, we determined the extent to which Part D 
plans apply utilization management tools to the 191 drugs that we reviewed.  The tools 
that we reviewed are prior authorization, quantity limits, and step therapy. 
 
To determine the extent to which the 191 commonly used drugs are subject to utilization 
management tools, we conducted an analysis of the NDCs that correspond to the 
commonly used drugs. Part D plan formularies do not apply utilization management 
tools at the active ingredient level.  Rather, Part D plan formularies apply utilization 
management tools at a more specific level that identifies whether a drug is brand-name or 
generic and its dosage form, strength, and route of administration, irrespective of package 
size. To conduct this analysis, we determined the NDCs (unique drugs) associated with 
each of the 191 commonly used drugs that are on each Part D formulary.  We then 
calculated the percentage of unique drugs to which each Part D plan formulary applies 
utilization management tools.  
 
Enrollment Analysis  
We weighted the formulary analysis by dual-eligible enrollment and weighted the 
utilization management tool analysis both by dual-eligible enrollment and Medicare 
enrollment.  To do this, we applied February 2012 enrollment data to 2012 Part D plans.   
 
   
Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles:   2012 (OEI-05-12-00060)   Page 10  Marilyn Tavenner 
Data Limitations  
We did not assess individual dual eligibles prescription drug use or whether individual 
dual eligibles are enrolled in Part D plans that include the specific drugs that each 
individual uses.  Because we relied on a sample of dual eligibles responding to the MCBS 
to develop our list of commonly used drugs, it is possible that a particular dual eligible 
might not use any of the drugs on our list.  However, the drugs most commonly used by 
dual-eligible MCBS survey participants in 2008 account for 87 percent of all 
prescriptions dispensed to the dual-eligible respondents in the 2008 MCBS.    
 
Because the lists of 191 commonly used drugs in the 2011 and 2012 memorandum  
reports are not identical, changes in formulary inclusion rates and application of 
utilization management tools between 2011 and 2012 may reflect changes as to which 
specific drugs were included in the lists, rather than changes regarding any specific drug.  
However, the two lists largely overlap; 92 percent of the drugs reviewed in the 
2011 memorandum report are the same as those reviewed in this 2012 memorandum  
report. 
 
Standards 
This study was  conducted in accordance with the Quality Standards for Inspection and 
Evaluation issued by the Council of the Inspectors General on Integrity and Efficiency. 
 
RESULTS  
 
Part D Plan Formularies Include Between 83 and 100 Percent of the Drugs 
Commonly Used by Dual Eligibles 
On average, Part D plan formularies include 96 percent of the drugs commonly used by 
dual eligibles. Of the 272 unique formularies used by Part D plans in 2012, 
23 formularies include 100 percent of the commonly used drugs.  At the other end of the 
inclusion range, one formulary includes 83 percent of the commonly used drugs.  CMS 
generally requires Part D plan formularies to include at least two drugs, rather than all 
drugs, in each therapeutic category or class.  Therefore, Part D plan formularies may still 
meet CMSs formulary requirements even if they do not include all drugs identified as 
commonly used by dual eligibles. 
 
Part D plan formularies inclusion of the drugs commonly used by dual eligibles in 2012 
is nearly identical to that of 2011. The average rate of inclusion96 percentwas 
unchanged between 2011 and 2012. In addition, we found that in 2011 Part D plan 
formularies included between 82 and 100 percent of the drugs commonly used by dual 
eligibles, whereas in 2012 they included between 83 and 100 percent of the drugs. 
 
Nationally, PDP and MA-PD formularies have the same average rates of inclusion 
96 percentof the drugs commonly used by dual eligibles.  PDP formulary inclusion 
ranges from 86 to 100 percent of the commonly used drugs, with MA-PD formulary 
inclusion ranging from 83 to 100 percent.  Thirty formularies11 percentare offered 
by both PDPs and MA-PDs. 
 
Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles:   2012 (OEI-05-12-00060)   Page 11  Marilyn Tavenner 
Regionally, all dual eligibles have the choice of a Part D plan that includes at least 
97 percent of the commonly used drugs. Every PDP region has a plan that includes at 
least 99 percent of the commonly used drugs, and every MA-PD region has a plan that 
covers at least 97 percent of these drugs.  Appendix D provides a breakdown of 
formulary inclusion by PDP and MA-PD region. 
 
On average, formularies for Part D plans with premiums below the regional benchmark 
include 95 percent of the drugs commonly used by dual eligibles. The percentage of 
drugs included by Part D plans with premiums below the regional benchmark is 
important because dual eligibles are automatically enrolled in, or annually reassigned to, 
these plans. For drugs commonly used by dual eligibles, formularies for Part D plans  
with premiums below the regional benchmark have a rate of inclusion that ranges from a 
low of 86 percent to a high of 100 percent.  Approximately 76 percent of dual eligibles 
are enrolled in such Part D plans. 
 
Ninety-nine percent of dual eligibles are enrolled in Part D plans that include at least 
90 percent of the drugs commonly used by dual eligibles. Of the approximately 
9.2 million dual eligibles, 99 percent are enrolled  in Part D plans that use formularies that 
include at least 90 percent of the commonly used drugs.  Only 1 percent of dual eligibles 
are enrolled in Part D plans that use formularies that include less than 90 percent of these 
drugs. Table 1 provides a breakdown of dual eligibles enrollment in Part D plans by the 
plans formulary inclusion rates. 
 
Table 1: Enrollment of Dual Eligibles in Part D Plans and Formulary Inclusion of 
Commonly Used Drugs  
Number of Dual Eligibles  Percentage of Dual 
Part D Plans That Include:  
Enrolled*   Eligibles Enrolled  
100% of commonly  used drugs   209,000   2%  
95% to 99% of commonly used drugs  3,504,000   38%  
90% to 94% of commonly used drugs  5,336,000   58%  
83% to 89% of commonly used drugs  131,000   1% 
 Total   9,180,000  100%**  
*Rounded to  the nearest 1,000. 

** Percentages do  not add to 100 percent because of rounding. 

Source:  OIG analysis of  formulary inclusion of drugs commonly used by dual eligibles and dual  eligibles enrollment, 2012. 

 
The percentage of dual eligibles enrolled in Part D plans that include at least 90 percent 
of the drugs commonly used by dual eligibles increased between 2011 and 2012, from 
90 percent to 99 percent. 
 
Sixty-one Percent of the Drugs Commonly Used by Dual Eligibles Are Included in 
All Part D Plan Formularies 
Because most of the commonly used drugs are included in a large percentage of 
formularies, dual eligibles are guaranteed formulary inclusion of many of these drugs 
regardless of the Part D plan in which they are enrolled.  By drug, formulary inclusion 
ranges from 44 percent to 100 percent.  In other words, one drug commonly used by dual 
eligibles is included in as few as 44 percent of Part D plan formularies, and 116 drugs are 
included in all plan formularies.  The average rate of formulary inclusion is 96 percent.  
Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles:   2012 (OEI-05-12-00060)   Page 12  Marilyn Tavenner 
Table 2 provides a summary of formulary inclusion rates.  Appendix D provides 
formulary inclusion rates for each of the commonly used drugs. 
 
Table 2: Formulary Inclusion Rates of Commonly  Used Drugs  
Percentage of the 191 Commonly  
Percentage of the 272 Formularies 
Used Drugs Included  
61%  
100%  
(116 drugs)  
31%  
85% to 99%  
(59 drugs)  
3%  
75% to 84%  
(5 drugs)  
6%  
44% to 74%  
(11 drugs) 
100%*  
 Total  
(191 drugs)  
* Percentages do not add to 100 percent because of rounding. 

Source:  OIG analysis of  formulary inclusion of drugs commonly used by dual eligibles, 2012  

 
The formulary inclusion rates of the drugs commonly used by dual eligibles in 2012 are 
similar to those in 2011.  The percentage of commonly used drugs included in all 
formularies increased slightly between 2011 and 2012, from 58 percent to 61 percent. 
 
Part D plan formularies include certain drugs less frequently than others. Of the 
commonly used drugs, 6 percent (11 drugs) are included by less than 75 percent of Part D 
plan formularies.  Table 3 provides the percentage of formularies covering each of these 
11 drugs. Eight of the eleven drugs are brand-name drugs, which are typically more 
costly than generic drugs. Four of the eleven drugs are used to treat high blood pressure 
and the remaining treat a variety of conditions including high cholesterol, high blood 
phosphate levels, and insomnia. 
 
Table 3: Drugs Included by Less Than 75 Percent of Part D Plan Formularies  
Formulary  
Generic Name of Drug   Primary Indication(s)  
Inclusion Rate  
Olmesartan/hydrochlorothiazide  Hypertension (high blood pressure)   74%  
Olmesartan medoxomil*  Hypertension (high blood pressure)   74%  
Carisoprodol  Muscle relaxant   73%  
Dyspepsia, peptic ulcer disease, gastroesophageal reflux 
Esomeprazole magnesium  71%  
disease, Zollinger-Ellison syndrome 
Rosiglitazone maleate  Insulin sensitizer  66%  
Sevelamer HCl   Hyperphosphatemia (high blood phosphate levels)  65%  
Ezetimibe/simvastatin*  Hyperlipidemia (high cholesterol)  63%  
Eszopiclone*  Insomnia  62%  
Irbesartan*   Hypertension (high blood pressure)   46%  
Irbesartan/hydrochlorothiazide*  Hypertension (high blood pressure)   45%  
Levalbuterol tartrate  Asthma, chronic obstructive pulmonary disease  44%  
* These drugs also  had low formulary inclusion rates in 2011. 

Source:  OIG analysis of  formulary inclusion of drugs commonly used by dual eligibles, 2012. 

 
 
Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles:   2012 (OEI-05-12-00060)   Page 13  Marilyn Tavenner 
Although Part D formularies frequently omit these 11 drugs, they all cover other 
therapeutically alternative drugs.  For all 11 drugs, 100 percent of formularies cover at 
least 1 therapeutically alternative drug that is also on the list of 191 drugs commonly used 
by dual eligibles. 
 
The number of drugs with inclusion rates below 75 percent increased from 8 in 2011 to 
11 in 2012. There are five drugs with low inclusion rates in 2012 that were also on the 
list of commonly used drugs with low inclusion rates in our 2011 report; they are noted in 
Table 3. An additional 3 of the 11 low-inclusion drugs in 2012 were not on the list of 
drugs most commonly used by dual eligibles in the 2011 report.   
 
The remaining 3 drugs included by less than 75 percent of formularies in 2012 were 
among the top 200 drugs commonly used by dual eligibles in 2011 and had lower 
inclusion rates in 2012 than in 2011. One of these drugs, carisoprodol, was put on the 
Drug Enforcement Agencys (DEA) schedule IV of federally controlled substances.41   
This may explain why its inclusion rate fell from 88 percent in 2011 to 73 percent in 
2012. Formulary inclusion rates for the second drug, an insulin sensitizer called 
rosiglitazone maleate, fell from 92 percent in 2011 to 66 percent in 2012.  This 
pronounced drop may be explained by guidance issued by the U.S. Food and Drug 
Administration (FDA) in mid-2011 that restricted access to the drug because of an 
increased risk of heart attack.42  The third drug, esomeprazole magnesium, was recently 
found to potentially cause serious complications in individuals suffering from  
osteoporosis. 
 
Low formulary inclusion rates may require dual eligibles to obtain a nonformulary drug.  
There are several means by which dual eligibles can obtain a nonformulary drug, all of 
which require them to take additional action. Obtaining therapeutically alternative drugs 
requires that dual eligibles get new prescriptions from their doctors.  Dual eligibles may 
also submit statements of medical necessity from their physicians as part of appeals to 
obtain coverage of nonformulary drugs.  Finally, dual eligibles may switch to Part D 
plans that include their drugs, with the new coverage becoming effective the following 
month. 
 
Plan formularies increased the percentage of commonly used drugs subject to 
utilization management tools between 2011 and 2012 
Of the unique drugs that compose the list of commonly used drugs, Part D plan 
formularies increased the percentage subject to utilization management tools from an 
average of 19 percent in 2011 to an average of 24 percent in 2012.  Among the 
formularies, those for plans with premiums below the regional benchmark increased this 
percentage slightly less, from an average of 19 percent in 2011 to an average of 
                                                 
41 The rule was finalized in January 2012.  The DEAs schedule lists drugs and other substances that are 
controlledi.e., to which access is limitedbecause of the potential for abuse.  Accessed at 
http://www.usdoj.gov on  February 14, 2012. 
42 FDA,  FDA Drug Safety Communication, Updated Risk Evaluation and  Mitigation Strategy (REMS) to  
Restrict Access to Rosiglitazone-containing Medicines Including Avandia, Avandamet, and Avandaryl,  
May 18, 2011.  Accessed at http://www.fda.gov on  February 22, 2012. 
Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles:   2012 (OEI-05-12-00060)   Page 14  Marilyn Tavenner 
22 percent in 2012. See Table 4 for a breakdown of the percentage of unique drugs to 
which Part D plan formularies apply utilization management tools in 2011 and 2012. 
 
Table 4: Part D Plan Formularies Application of Utilization Management Tools to 
Commonly  Used Drugs, 2011 to 2012  
Percentage of Unique Drugs   Number of   Percentage of   Number of  
Percentage of  
to Which Utilization  2011 Part D  2011 Part D  2012 Part D 
2012 Part D Plan  
Management Tools Are  Plan  Plan  Plan 
Formularies  
Applied  Formularies   Formularies   Formularies  
40% to 49%   14  6%   31  11%  
30% to 39%   29  12%   59  22%  
20% to 29%   75  30%   92  34%  
10% to 19%   76  31%   54  20%  
Less than 10%   55  22%   36  13% 
     Totals   249  100%*   272  100%  
*Percentages do not add to 100 percent because of rounding. 

Source:  OIG analysis of  formulary inclusion of drugs commonly used by dual eligibles, 2012. 

 
This increase in plan formularies application of utilization management tools results 
primarily from an increase in the rate at which formularies apply quantity limits to the 
unique drugs that make up commonly used drugs.  In 2012, plan formularies applied such 
quantity limits to an average of 21 percent of unique drugs, up from 16 percent in 2011.43   
Formularies applied the other two utilization management toolsprior authorization and 
step therapyat virtually the same rates in 2012 as in 2011, with each being applied to 
an average of 3 percent of unique drugs. 
 
Although there has been an overall increase, wide variation remains in the rate at which 
plan formularies apply utilization management tools.  In 2012, plan formularies apply 
utilization management tools to between 0 and 49 percent of the unique drugs.  More 
specifically, formularies apply quantity limits to between 0 and 46 percent of unique 
drugs, prior authorization to between 0 and 28 percent, and step therapy to between 0 and 
22 percent. 
 
Looking at enrollment across plans provides a slightly different picture than looking only 
at plans themselves.  On average, plan formularies in 2012 apply utilization management 
tools to 24 percent of unique drugs. However, dual eligibles tend to be enrolled in plans 
with formularies that apply these tools at a slightly higher rate; in 2012, the median plan 
weighted by dual-eligible enrollment applies such tools to 26 percent of unique drugs.  
This is an increase over 2011, when the median plan weighted by dual-eligible 
enrollment applied utilization management tools to 21 percent of unique drugs.  
Similarly, the median plan weighted by overall Medicare enrollment applies these tools 
to at least 26 percent of unique drugs in 2012, up from 23 percent in 2011.   
 
Both dual eligibles and all Medicare beneficiaries tend to be enrolled in plans with 
formularies that apply utilization management tools to between 20 and 40 percent of 
unique drugs. In 2012, 66 percent of dual eligibles and 65 percent of all Medicare 
                                                 
43 This change may be  due to an increase in  voluntary reporting  of certain  quantity limits that CMS does 
not  require to be reported.  
Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles:   2012 (OEI-05-12-00060)   Page 15  Marilyn Tavenner 
beneficiaries were enrolled in plans with formularies in this range.  Table 5 provides a 
breakdown of dual eligibles and Medicare beneficiaries enrollment in Part D plans by 
the plans formularies application of utilization management tools.   
 
Table 5: Beneficiary Enrollment in Part D Plans by Application of Utilization 

Management Tools to Commonly Used Drugs, 2011 to 2012  

Percentage of   Percentage of  
Percentage of Unique Drugs to   Percentage of   Percentage of  
Medicare  Medicare 
Which Plan Formularies Apply   Dual Eligibles  Dual Eligibles 
Beneficiaries  Beneficiaries 
Utilization Management Tools   Enrolled, 2011   Enrolled, 2012  
Enrolled, 2011   Enrolled, 2012  
40% to 49%   18%   12%   22%   21%  
30% to 39%   14%   24%   22%   23%  
20% to 29%   26%   17%   44%   42%  
10% to 19%   39%   39%   2%   4%  
Less than 10%   4%   7%   9%   10% 
     Totals   100%*   100%*   100%*   100%  
*Percentages do not add to 100 percent because of rounding. 

Source:  OIG analysis of dual-eligible enrollment and Medicaid  beneficiary enrollment by rates of utilization management tool 
 
application to drugs commonly used by dual eligibles. 

 
Further, although utilization management tools control access to drugs, they also remain 
important tools for managing costs in Medicare and ensuring appropriate utilization of  
drugs. For example, carisoprodol drugs saw the greatest increase in the application of 
quantity limits.  Such limitsin addition to formularies low inclusion rates for these 
drugsmay be intended to ensure appropriate utilization, as these drugs were recently 
added to the DEAs schedule of federally controlled substances. 
 
CONCLUSION 
 
When establishing formularies and applying utilization management tools, Part D plans 
need to balance Medicare beneficiaries needs for adequate prescription drug coverage 
with the need to contain costs for themselves and for the Part D program.  By law, Part D 
plan formularies do not have to include every available drug.  Rather, to meet CMSs  
formulary requirements, they must include at least two drugs in each therapeutic category 
or class. For example, for each of the 11 drugs that this memorandum report identifies as 
being included by less than 75 percent of Part D plan formularies, all Part D plan 
formularies cover at least one therapeutically alternative drug.  Part D plan formularies 
may also institute utilization management tools to ensure appropriate utilization as well 
as to control costs.  
 
For the drugs commonly used by dual eligibles, we found that the rate of formulary 
inclusion is high with some variation.  On average, Part D plan formularies include 
96 percent of the commonly used drugs. One Part D plan formulary includes as little as 
83 percent of the commonly used drugs. Formulary inclusion rates are similar for PDPs 
and MA-PDs.  Further, formularies for Part D plans with premiums below the regional 
benchmark include the commonly used drugs at a rate similar to that of Part D plan 
formularies overall. 
 
Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles:   2012 (OEI-05-12-00060)   Page 16  Marilyn Tavenner 
Inclusion rates for the 191 drugs commonly used by dual eligibles are largely unchanged 
compared with those from OIGs 2011 memorandum report.  Part D plan formularies 
include roughly the same percentage of these commonly used drugs in 2012 as they did 
in 2011. Enrollment in plans that cover at least 90 percent of unique drugs increased, 
with 99 percent of dual eligibles enrolled in such plans.     
 
Although dual eligibles, like all Medicare beneficiaries, are largely enrolled in plans that 
apply utilization management tools to a higher than average percentage of unique drugs, 
this increase is largely a result of an increase in plans use of quantity limits.  Plan 
formularies still vary widely in the rates at  which they apply utilization management tools 
to unique drugs. 
 
Because some variation exists in Part D plan formularies inclusion of the commonly 
used drugs and in their application of utilization management tools to these drugs, some 
dual eligibles may need to use alternative methods to access the drugs they take.  They 
could appeal prescription drug coverage decisions, switch prescription drugs, or switch 
Part D plans. These scenarios require additional effort by dual eligibles and may result in 
administrative barriers to accessing certain prescription drugs. 
 
As mandated by the ACA, OIG will continue to monitor the extent to which Part D plan 
formularies cover drugs that dual eligibles commonly use.  In addition, OIG will continue 
to monitor Part D plan formularies application of utilization management tools to these 
drugs. 
 
This memorandum report is being issued directly in final form because it contains no 
recommendations.  We have included the list of the 200 drugs most commonly used by 
dual eligibles. If you have comments or questions about this memorandum report, please 
provide them within 60 days. Please refer to report number OEI-05-12-00060 in all 
correspondence. 
Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles:   2012 (OEI-05-12-00060)   Page 17  Marilyn Tavenner 
APPENDIX A 
 
Section 3313 of the Patient Protection and Affordable Care Act of 2010 
 
SEC. 3313.  OFFICE OF THE INSPECTOR GENERAL STUDIES AND REPORTS. 
 
(a)  STUDY AND ANNUAL REPORT ON PART D FORMULARIES INCLUSION 
OF DRUGS COMMONLY USED BY DUAL ELIGIBLES.  
 
(1) STUDY.The Inspector General of the Department of Health and Human Services 
shall conduct a study of the extent to which formularies used by prescription drug plans 
and MA-PD plans under Part D include drugs commonly used by full benefit dual 
eligible individuals (as defined in section 1935(c)(6) of the Social Security Act 
(42 U.S.C. 1396u5(c)(6)). 
 
(2)  ANNUAL REPORTS.Not later than July 1 of each year (beginning with 2011), the 
Inspector General shall submit to Congress a report on the study conducted under 
paragraph (1), together with such recommendations as the Inspector General determines 
appropriate. 
Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles:   2012 (OEI-05-12-00060)   Page 18  Marilyn Tavenner 
APPENDIX B  
 
Table B-1: 200 Drugs Commonly Used by Dual Eligibles 
Number of   Percentage of  
Sample  Projected   95-Percent Confidence 
Generic Name   Formularies  Formularies 
Size*  Drugs*   Interval  
Including   Including  
Furosemide   4,337   14,685,805   13,193,887  16,177,723   272  100%  
Lisinopril  3,638   13,441,780   12,115,557  14,768,002   272  100%  
Hydrocodone 
bitartrate/acetaminophen   3,788   12,265,705   10,187,490  14,343,921   272  100%  
Simvastatin   3,323   12,200,581   10,886,194  13,514,968   271  100%  
Levothyroxine sodium  3,708   12,148,646   10,757,336  13,539,956   272  100%  
Potassium chloride  3,029   10,184,469   8,784,636  11,584,303   272  100%  
Omeprazole  2,829   9,651,497   8,339,152  10,963,842   272  100%  
Metformin hydrochloride 
(HCl)  2,313   8,676,241   7,659,708  9,692,774   272  100%  
Amlodipine besylate  2,300   8,363,812   7,211,958  9,515,666   272  100%  
Atorvastatin calcium  2,072   8,190,308   7,053,038  9,327,578   222  82%  
Warfarin sodium   2,473   7,736,287   6,301,924  9,170,649   272  100%  
Metoprolol tartrate   2,000   7,109,660   6,139,709  8,079,612   272  100%  
Clopidogrel bisulfate  1,863   6,939,176   5,890,222  7,988,131   272  100%  
Hydrochlorothiazide  1,676   6,829,480   5,641,558  8,017,402   272  100%  
Albuterol sulfate  1,903   6,749,306   5,721,342  7,777,270   272  100%  
Atenolol  1,676   6,656,182   5,608,415  7,703,949   272  100%  
Metoprolol succinate  1,582   5,947,902   4,974,663  6,921,140   270  99%  
Gabapentin  1,520   5,101,476   4,220,207  5,982,745   272  100%  
Esomeprazole magnesium  1,308   5,098,976   4,155,417  6,042,535   193  71%  
Sertraline HCl   1,411   4,738,678   3,646,257  5,831,099   272  100%  
Zolpidem tartrate   1,284   4,266,954   3,513,634  5,020,274   272  100%  
Lansoprazole  1,151   4,176,391   3,223,654  5,129,128   236  87%  
Citalopram hydrobromide   1,154   4,110,952   2,627,240  5,594,664   272  100%  
Ranitidine HCl  1,332   4,103,165   3,361,383  4,844,946   272  100%  
Glipizide  1,033   4,044,091   3,240,677  4,847,505   272  100%  
Alendronate sodium  949  4,042,433   3,284,602  4,800,264   272  100%  
Isosorbide mononitrate   1,148   3,781,351   2,987,563  4,575,139   272  100%  
Valsartan  1,022   3,707,643   2,917,377  4,497,909   264  97%  
Quetiapine fumarate  1,446   3,706,606   2,939,067  4,474,146   272  100%  
Trazodone HCl   1,169   3,671,406   3,061,488  4,281,325   272  100%  
Montelukast sodium  1,025   3,612,948   2736246  4489650  271  100%  
Clonidine HCl  901  3,608,763   2610281  4607245  272  100%  
Divalproex sodium   1,465   3,576,329   2535872  4616786  272  100%  
Carvedilol  1,033   3,554,671   2945928  4163414  272  100%  
Fluticasone/salmeterol   1,038   3,539,979   2835106  4244852  237  87%  
Pantoprazole sodium  1,005   3,535,665   2953627  4117703  240  88%  
Tramadol HCl  1,075   3,524,890   2812406  4237374  272  100%  
Digoxin   1,059   3,474,737   2793941 - 4155533  272  100%  
Oxycodone 
HCl/acetaminophen  971  3,434,934   2457792 - 4412076  272  100%  
continued on next page 
Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles:   2012 (OEI-05-12-00060)   Page 19  Marilyn Tavenner 
Table B-1: 200 Drugs Commonly Used by Dual Eligibles, continued  
Number of   Percentage of  
Sample  Projected   95-Percent Confidence 
Generic Name   Formularies  Formularies 
Size*  Drugs*   Interval  
Including   Including  
Diltiazem HCl  1,037   3,412,223   2651112 - 4173334  272  100%  
Escitalopram oxalate  1,067   3,361,299   2782036 - 3940562  226  83%  
Donepezil HCl  1,153   3,327,287   2728469 - 3926104  272  100%  
Prednisone   908  3,221,210   2647192 - 3795227  272  100%  
Insulin glargine, human 
recombinant analog  879  3,116,960   2525959 - 3707962  269  99%  
Enalapril maleate  823  3,114,860   2433873 - 3795847  272  100%  
Paroxetine HCl   886  2,970,274   2321417 - 3619132  272  100%  
Alprazolam  843  2,965,959   2387894 - 3544024  Excluded  Excluded 
Spironolactone  739  2,894,286   2183730 - 3604841  272  100%  
Risperidone  1,103   2,864,033   2237878 - 3490187  272  100%  
Fluticasone propionate   771  2,796,087   2217498 - 3374676  272  100%  
Ibuprofen   773  2,694,287   2164457 - 3224117  272  100%  
Lovastatin  700  2,646,252   2085719 - 3206785  267  98%  
Venlafaxine HCl   881  2,631,793   1884901 - 3378686  272  100%  
Pioglitazone HCl  720  2,630,131   2031147 - 3229114  271  100%  
Naproxen   790  2,593,580   1921730 - 3265429  272  100%  
Propoxyphene/ 
acetaminophen   826  2,544,654   2064770 - 3024538  Excluded  Excluded 
Mirtazapine  817  2,459,380   1900636 - 3018124  272  100%  
Nitroglycerin   676  2,412,856   1857936 - 2967776  272  100%  
Risedronate sodium  638  2,328,091   1688961 - 2967221  213  78%  
Rosuvastatin calcium   605  2,324,733   1666051 - 2983416  243  89%  
Allopurinol  660  2,305,299   1807758 - 2802841  272  100%  
Ezetimibe/simvastatin  539  2,281,341   1695437 - 2867245  172  63%  
Tiotropium bromide  585  2,271,519   1683066 - 2859973  272  100%  
Olanzapine   930  2,225,593   1642272 - 2808913  272  100%  
Fluoxetine HCl  704  2,210,005   1676917 - 2743093  272  100%  
Cyclobenzaprine HCl  712  2,208,315   1766234 - 2650395  242  89%  
Nifedipine  587  2,184,461   1672322 - 2696600  271  100%  
Triamterene/ 
hydrochlorothiazide  583  2,151,470   1644770 - 2658171  272  100%  
Ipratropium/albuterol 
sulfate  518  2,146,990   1469609 - 2824372  266  98%  
Bupropion HCl   669  2,092,615   1537431 - 2647798  272  100%  
Human insulin neutral 
protamine 
hagerdorn/regular human 
insulin   579  2,089,492   1576428 - 2602556  272  100%  
Metoclopramide HCl  558  2,045,974   1484240 - 2607708  272  100%  
Duloxetine HCl  649  2,018,238   1509781 - 2526695  272  100%  
Tamsulosin HCl  568  2,008,282   1486550 - 2530014  271  100%  
Fexofenadine HCl  663  1,999,433   1470782 - 2528085  240  88%  
Oxycodone HCl   637  1,993,053   1248484 - 2737622  270  99%  
Amitriptyline HCl  551  1,990,104   1428406 - 2551802  272  100%  
Glyburide   574  1,979,902   1490571 - 2469232  272  100%  
Oxybutynin chloride  577  1,956,602   1387744 - 2525461  271  100%  
continued on next page 
Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles:   2012 (OEI-05-12-00060)   Page 20  Marilyn Tavenner 
Table B-1: 200 Drugs Commonly Used by Dual Eligibles, continued  
Number of   Percentage of  
Sample  Projected   95-Percent Confidence 
Generic Name   Formularies  Formularies 
Size*  Drugs*   Interval  
Including   Including  
Celecoxib  542  1,951,785   1475384 - 2428186  240  88%  
Morphine sulfate   559  1,944,457   1273695 - 2615219  272  100%  
Losartan potassium  464  1,926,721   1429114 - 2424328  272  100%  
Famotidine   587  1,889,265   1383531 - 2394999  269  99%  
Ezetimibe   470  1,859,398   1252463 - 2466333  258  95%  
Lisinopril/ 
hydrochlorothizide  470  1,842,345   1396106 - 2288583  271  100%  
Phenytoin sodium  
extended   672  1,807,778   1357338 - 2258218  272  100%  
Azithromycin  570  1,792,085   1566126 - 2018043  272  100%  
Amlodipine 
besylate/benazepril  472  1,771,154   1277515 - 2264793  263  97%  
Pravastatin sodium  457  1,756,636   1212294 - 2300978  271  100%  
Promethazine HCl  530  1,726,657   1320104 - 2133210  255  94%  
Levofloxacin  541  1,677,469   1469043 - 1885894  248  91%  
Valsartan/ 
hydrochlorothizide  442  1,675,897   1151485 - 2200309  263  97%  
Triamcinolone acetonide  465  1,638,579   1299882 - 1977277  272  100%  
Ciprofloxacin HCl  519  1,611,117   1397358 - 1824875  272  100%  
Polyethylene glycol 3350  573  1,582,521   1145034 - 2020008  Excluded  Excluded 
Latanoprost  366  1,579,313   999644 - 2158983  264  97%  
Pregabalin  544  1,555,936   1149681 - 1962192  272  100%  
Carbamazepine   653  1,548,840   1126173 - 1971506  272  100%  
Sulfamethoxazole/ 
trimethoprim   515  1,537,819   1296125 - 1779512  272  100%  
Meclizine HCl  458  1,530,711   1134681 - 1926741  263  97%  
Fentanyl   511  1,528,398   1050797 - 2005999  272  100%  
Carisoprodol  514  1,523,632   996317 - 2050946  199  73%  
Mometasone furoate  460  1,504,992   1033429 - 1976556  270  99%  
Memantine HCl   578  1,470,854   1170138 - 1771570  272  100%  
Meloxicam  388  1,464,145   1030222 - 1898068  270  99%  
Topiramate  520  1,457,016   850357 - 2063676  272  100%  
Ziprasidone HCl   556  1,446,603   574246 - 2318960  272  100%  
Acetaminophen with 
codeine  399  1,434,600   1009935 - 1859265  272  100%  
Aripiprazole  580  1,428,529   1031445 - 1825614  272  100%  
Fenofibrate 
nanocrystallized  472  1,359,334   1055971 - 1662698  221  81% 
Clonazepam  517  1,351,688   982369 - 1721007  Excluded  Excluded 
Tolterodine tartrate  416  1,314,991   1005040 - 1624941  228  84%  
Estrogens, conjugated   381  1,311,282   863950 - 1758615  240  88%  
Lorazepam  417  1,306,594   998485 - 1614703  Excluded  Excluded 
Glimepiride  356  1,289,174   851327 - 1727022  272  100%  
Amoxicillin  418  1,257,789   939066 - 1576512  272  100% 
Insulin regular, human   374  1,256,184   910927 - 1601440  272  100%  
Ramipril  375  1,255,814   874340 - 1637288  266  98%  
Cephalexin monohydrate   409  1,250,553   1034309 - 1466797  272  100%  
continued on next page 
Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles:   2012 (OEI-05-12-00060)   Page 21  Marilyn Tavenner 
Table B-1: 200 Drugs Commonly Used by Dual Eligibles, continued  
Number of   Percentage of  
Sample  Projected   95-Percent Confidence 
Generic Name   Formularies  Formularies 
Size*  Drugs*   Interval  
Including   Including  
Lidocaine  329  1,246,987   785982 - 1707992  269  99%  
Clozapine  343  1,224,932   279540 - 2170325  272  100%  
Buspirone HCl   390  1,191,990   835238 - 1548741  272  100%  
Verapamil HCl  337  1,191,624   825285 - 1557962  272  100%  
Baclofen  396  1,170,146   664247 - 1676045  272  100%  
Brimonidine tartrate  321  1,165,063   776923 - 1553203  272  100%  
Glyburide/metformin HCl  293  1,156,580   742359 - 1570801  268  99%  
Ropinirole HCl   341  1,146,087   798195 - 1493979  272  100%  
Lactulose  363  1,141,046   764364 - 1517728  272  100%  
Isosorbide dinitrate  315  1,129,644   713004 - 1546284  272  100%  
Hydroxyzine HCl   318  1,109,764   705599 - 1513929  251  92%  
Propranolol HCl   372  1,109,183   661977 - 1556389  272  100%  
Benztropine mesylate   547  1,085,890   741371 - 1430409  272  100%  
Ipratropium bromide  287  1,082,885   744368 - 1421402  272  100%  
Carbidopa/levodopa  369  1,080,702   806051 - 1355353  272  100%  
Temazepam  247  1,067,644   576409 - 1558879  Excluded  Excluded 
Rosiglitazone Maleate  250  1,060,782   700262 - 1421302  180  66%  
Hydralazine HCl  302  1,042,882   708441 - 1377323  272  100%  
Diazepam  316  1,037,764   639871 - 1435657  Excluded  Excluded 
Raloxifene HCl  274  1,019,231   619027 - 1419435  272  100%  
Nystatin  345  1,011,486   728013 - 1294960  272  100%  
Sitagliptin phosphate  272  1,008,877   674685 - 1343068  271  100%  
Insulin aspart  288  1,000,026   720934 - 1279118  259  95%  
Neutral protamine 
hagedorn, human insulin 
isophane  243  983,481   615817 - 1351145  272  100%  
Felodipine  237  982,218   207778 - 1756658  267  98%  
Amoxicillin/  
potassium clavulanate   289  946,810   762446 - 1131174  272  100%  
Nitrofurantoin macrocrystal  312  945,590   687395 - 1203786  264  97%  
Benazepril HCl  260  937,695   568591 - 1306799  271  100%  
Folic acid   230  874,301   570174 - 1178429  Excluded  Excluded 
Lithium carbonate  341  868,164   510514 - 1225813  272  100%  
Gemfibrozil  247  861,901   527971 - 1195832  272  100%  
Levetiracetam  333  859,610   599818 - 1119402  272  100%  
Doxazosin mesylate  244  857,633   584525 - 1130740  272  100%  
Lamotrigine  364  857,597   601909 - 1113286  272  100%  
Doxycycline hyclate  324  848,531   589213 - 1107849  272  100%  
Aspirin/dipyridamole  241  834,516   537845 - 1131187  272  100%  
Colchicine  261  834,188   442023 - 1226354  272  100%  
Diclofenac sodium   242  833,173   559917 - 1106430  272  100%  
Travoprost  236  830,131   528,679 - 1,131,583  236  87%  
Terazosin HCl   194  815,795   563406 - 1068183  271  100%  
Estradiol  226  815,044   429758 - 1200330  272  100%  
continued on next page 
Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles:   2012 (OEI-05-12-00060)   Page 22  Marilyn Tavenner 
Table B-1: 200 Drugs Commonly Used by Dual Eligibles, continued  
Number of   Percentage of  
Sample  Projected   95-Percent Confidence 
Generic Name   Formularies  Formularies 
Size*  Drugs*   Interval  
Including   Including  
Diphenoxylate HCl/atropine   210  809,881   504818 - 1114944  236  87%  
Finasteride  234  796,833   461202 - 1132463  272  100%  
Dicyclomine HCl   240  795,973   523817- 1068129  239  88%  
Eszopiclone  232  787,150   467844 - 1106455  168  62%  
Budesonide  241  760,794   369378 - 1152210  272  100%  
Dorzolamide HCl/ 
timolol maleate  193  755,718   463277 - 1048158  272  100%  
Metolazone  192  743,961   424989 - 1062933  271  100%  
Megestrol acetate  247  734,198   476455 - 991941   272  100%  
Irbesartan  206  708,918   406569 - 1011268  124  46%  
Insulin lispro  194  697,182   424507 - 969858   236  87%  
Solifenacin succinate  201  692,920   420471 - 965370   239  88%  
Olmesartan medoxomil  186  682,523   428135 - 936912   202  74%  
Timolol maleate  175  680,521   359267 - 1001774  272  100%  
Amiodarone HCl  194  673,811   429122 - 918500   272  100%  
Olmesartan/ 
hydrochlorothiazide  136  671,025   303900 - 1038149  202  74%  
Tramadol HCl/ 
acetaminophen  214  661,553   365944 - 957163   238  88%  
Clotrimazole/ 
betamet diprop   207  658,680   440329 - 877031   233  86%  
Tizanidine HCl  236  651,966   429197 - 874735   269  99%  
Methylprednisolone  160  651,291   296663 - 1005918  272  100%  
Methocarbamol  218  630,227   322937 - 937517   236  87%  
Cilostazol  168  627,132   358096 - 896168   272  100%  
Fluconazole  207  614,764   471735 - 757793   272  100%  
Oxcarbazepine  201  607,650   229494 - 985806   272  100%  
Irbesartan/ 
hydrochlorothiazide  132  597,953   272441 - 923465   123  45%  
Sucralfate  205  594,980   396840 - 793120   272  100%  
Metronidazole  208  582,146   436251 - 728040   272  100%  
Hydrocortisone  189  577,352   311485 - 843220   272  100%  
Bumetanide  151  566,568   289593 - 843543   272  100%  
Ketoconazole  191  562,166   360215 - 764117   272  100%  
Prednisolone acetate   165  560,873   384412 - 737333   272  100%  
Olopatadine HCl  155  558,911   333324 - 784497   249  92%  
Labetalol HCl  172  554,598   319726 - 789471   271  100%  
Sevelamer HCl   171  544,742   301870 - 787613   177  65%  
Dutasteride  124  542,207   277954 - 806460   231  85%  
Insulin aspart 
protamine/insulin aspart   143  541,749   327249 - 756249   259  95%  
Losartan/ 
hydrochlorothiazide  183  536,132   312843 - 759421   271  100%  
Bimatoprost  147  520,009   234135 - 805882   253  93%  
Methadone HCl  172  519,198   179316 - 859081   268  99%  
Levalbuterol tartrate  141  516,901   268,774 - 765,027  119  44%  
Loratadine  166  513,975   321,300 - 706,650  Excluded  Excluded 
Source:  Office of  Inspector General (OIG) analysis of drugs commonly used by dual eligibles, 2012. 
Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles:   2012 (OEI-05-12-00060)   Page 23  Marilyn Tavenner 
APPENDIX C 
 
Nine Drugs Commonly Used by Dual Eligibles and Not Covered Under Part D 
 
 
Generic Name   Reason Excluded Under    Part D 
Alprazolam*  Benzodiazepine 
Clonazepam*  Benzodiazepine 
Diazepam*  Benzodiazepine 
Folic acid*   Vitamin or mineral product  
Lorazepam*  Benzodiazepine 
Polyethylene glycol 3350*  Nonprescription drug  
No longer available in the United 
Propoxyphene/acetaminophen   States 
Temazepam*  Benzodiazepine 
Loratadine  Nonprescription drug  
Source:  Office of  Inspector General analysis of  formulary inclusion of drugs commonly used  
by dual eligibles, 2012. 
* These drugs were also on  the 2011 reports list of drugs commonly used by dual eligibles 
and not covered under Part D. 
 
Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles:   2012 (OEI-05-12-00060)   Page 24  Marilyn Tavenner 
APPENDIX D 
 
Formulary Inclusion of Stand-Alone Prescription Drug Plans* and Medicare 
Advantage Prescription Drug Plans** by Region 
 
Table D-1: PDP Formulary  Inclusion 
Average 
PDP  Number of   Formulary   Minimum 
Region  State(s)   PDPs  Inclusion Rate   Rate   Maximum Rate  
1  Maine, New Hampshire  28  95%   86%   99%  
Connecticut, Massachusetts, 
2  Rhode Island, Vermont   30  95%   86%   99%  
3  New  York   29  95%   86%   99%  
4  New  Jersey   30  94%   86%   99%  
Delaware, the District of 
5  Columbia, Maryland  31  95%   86%   99%  
6  Pennsylvania, West Virginia  36  95%   86%   100%  
7  Virginia  30  95%   86%   99%  
8  North Carolina   30  95%   86%   99%  
9  South Carolina   32  95%   86%   99%  
10  Georgia  30  95%   86%   99%  
11  Florida   33  95%   86%   99%  
12  Alabama, Tennessee  32  95%   86%   99%  
13  Michigan  34  95%   86%   99%  
14  Ohio   33  95%   86%   100%  
15  Indiana, Kentucky  31  95%  86%  99% 
16  Wisconsin  29  95%   86%   99%  
17  Illinois  33  95%   86%   100%  
18  Missouri  30  95%   86%   99%  
19  Arkansas  30  95%   90%   99%  
20  Mississippi  30  94%   86%   99%  
21  Louisiana  30  94%   86%   99%  
22  Texas   33  95%   86%   99%  
23  Oklahoma   30  94%   86%   99%  
24  Kansas  31  95%   86%   99%  
Iowa, Minnesota, Montana, 
Nebraska, North Dakota,  
25  South Dakota, Wyoming   33  95%   86%   99%  
26  New  Mexico  30  95%   86%   99%  
27  Colorado   28  95%   86%   99%  
28  Arizona  30  95%   86%   99%  
29  Nevada   29  95%   86%   99%  
30  Oregon, Washington  30  94%   86%   99%  
31  Idaho, Utah   33  94%   86%   99%  
32  California  33  95%   86%   99%  
33  Hawaii  25  94%   86%   99%  
34  Alaska   25  95%   90%   99%  
Source:  Office of  Inspector General (OIG) analysis of  formulary inclusion of  drugs commonly used by dual eligibles, 2012. 
 
*PDP.  
**MA-PD.  
 
Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles:   2012 (OEI-05-12-00060)   Page 25  Marilyn Tavenner 
Table D-2: MA-PD Formulary Inclusion by Region 
Number  Average 
MA- PD   of MA-  Formulary   Minimum  Maximum 
Region***  State(s)   PDs  Inclusion Rate   Rate   Rate  
1  Maine, New Hampshire  31  95%   94%   97%  
Connecticut, Massachusetts, 
2  Rhode Island, Vermont   56  96%   90%   99%  
3  New  York   183  96%   87%   100%  
4  New  Jersey   28  95%   90%   100%  
Delaware, the District of Columbia, 
5  Maryland  29  96%   94%   100%  
6  Pennsylvania, West Virginia  133  97%   87%   100%  
7  North Carolina, Virginia  119  96%   94%   100%  
8  Georgia, South Carolina   129  96%   90%   100%  
9  Florida   254  96%   85%   100%  
10  Alabama, Tennessee  86  95%   83%   97%  
11  Michigan  63  96%   91%   100%  
12  Ohio   75  96%   90%   100%  
13  Indiana, Kentucky  83  96%  94%  99% 
14  Illinois, Wisconsin  133  96%   88%   100%  
15  Arkansas, Missouri  117  96%   90%   99%  
16  Louisiana, Mississippi  81  96%   90%   99%  
17  Texas   152  95%   90%   99%  
18  Kansas, Oklahoma  62  95%   87%   100%  
Iowa, Minnesota, Montana, 
Nebraska, North Dakota, South 
19  Dakota, Wyoming  105  96%   88%   100%  
20  Colorado, New  Mexico  60  97%   91%   100%  
21  Arizona  69  95%   90%   99%  
22  Nevada   40  95%   90%   100%  
23  Idaho, Oregon, Utah, Washington   154  96%   90%   100%  
24  California  228  96%   90%   100%  
25  Hawaii  21  96%   90%   100%  
Source:  OIG analysis of  formulary inclusion of drugs commonly used by dual eligibles, 2012. 
*Region 26, which covers Alaska, has no MA-PDs available for 2012. 
 
 
Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles:   2012 (OEI-05-12-00060)