Is cequa covered by Medicare?

1.1. Overview of Medicare coverage

In order to discuss if Medicare covers CEQUA, it is important to understand how the product fits within the Medicare benefit structure. The Centers for Medicare and Medicaid Services (CMS) states that the Medicare program provides coverage for items and services that are reasonable and necessary for the prevention and treatment of illness or injury. Medicare coverage is available nationwide for people age 65 and older and for some people under age 65 with disabilities. Medicare has two primary parts that provide coverage: Part A is Hospital Insurance that helps cover inpatient care in hospitals. This is an important leg of Medicare as it lays the groundwork for Part B coverage. Part B coverage is medical insurance that helps cover the costs of physician services and outpatient care. This provides the framework for CEQUA coverage. Step one in gaining medical coverage for a product is to show the product is a medical service. Think of this as an initial hurdle to pass. Without passage, there is no coverage. Step two is establishing whether or not the product is reasonable and necessary. Reasonable and necessary is a higher standard than just relating to health. This is an important distinction. Step two is often the stopping point for many pharmaceuticals. If a product passes Step one and Step two, that product will be a good candidate for coverage under Medicare. Finally, Part B also covers drugs that are necessary for treatment that are administered incident to a physician’s service for an illness or condition. This provides another avenue for prescription drug coverage. (Husereau et al.2022)(Husereau et al.2022)(Mikell, 2023)(Smith-Booth & Belon)(Theroux et al.2021)(Pappas, 2020)(Staff et al.)(Phillips et al., 2022)

1.2. Importance of Medicare coverage for medications

Various studies show that Medicare beneficiaries are consuming an increasing number of prescription and over-the-counter drugs. From 1992 to 2000, the percentage of persons 65 and older reporting drug use in the past month increased from 83.4 percent to 87.7 percent. As the number of drugs being administered to Medicare beneficiaries increases, it becomes increasingly important for Medicare to cover drugs to lower the out-of-pocket expenses for beneficiaries. The Greenwald report concludes that “overall, Medicare beneficiaries are more likely to reduce their spending on basic needs than to reduce their prescription drug use to make ends meet. Thus, public support for these essential medications under the Medicare program is crucial to maintaining the health and economic well-being of the elderly.” Because medications are essential for preventing further health complications and maintaining a high quality of life, it is crucial to understand the implications of the choice of Medicare plans and the new Medicare Prescription Drug Benefit on medication access and costs. Since the implementation of Medicare Part D, the conversation regarding medications coverage has become far more complex than it was before. It is crucial for all Medicare beneficiaries, even those who are or will be on medications in the future, to understand how medications are covered under their current or future Medicare coverage. This includes understanding the differences between medication coverage under Part D, Medicare Advantage, and Medigap plans. With the exception of a few cases where beneficiaries are quickly and automatically switched to Medicaid, applying for Social Security Income (SSI), or are in a nursing home, Medicare beneficiaries at any point in time have the option to choose between original Medicare with or without a Medigap plan, and a Medicare Advantage plan. In short, Part A is the only part of Medicare that has no options for medication coverage. Part D is Medicare’s most recent and farthest-reaching attempt to add optional medication coverage. Optional Part D coverage must be through a private insurance plan, but it can be obtained by people with original Medicare, a Medicare cost plan, a Medicare private fee-for-service plan, or a Medicare medical savings account plan. Part D coverage can also be obtained as part of a comprehensive Medicare Advantage plan. In any of these cases, anyone who has credible medication coverage that is at least as good as what Medicare offers does not need to take part in Part D and may automatically or involuntarily lose their employer or union-sponsored coverage if they sign up for Part D. If this happens, the individual has one year to re-enroll in the employer or union plan. Failure to re-enroll upon losing Part D will, at most recent legal interpretation, make the individual ineligible to sign up for non-Medigap supplemental coverage, and the individual may lose the right to revert back to original Medicare. These rules may be relevant to a relatively small number of current Medicare beneficiaries, but anyone enrolling in Medicare at age 65 beginning in 2006 or later will find that they have no choice but to understand Part D and that the complexities of medications coverage and its implications for future Medicare coverage will continue to grow. This is further complicated by the fact that Medicare will increasingly become a program primarily serving minoritized people who commonly experience worse health, lower income, and language barriers, which make it more likely that they will face difficulties understanding their medication coverage and making optimal choices that suit their health and financial needs. (Islam et al.2021)(Kracalik et al.2023)(Sasaki et al.2021)(Warren et al.)(Lakkis et al.2024)(Wang et al.2020)(Herrera-Añazco et al.2023)

2. Medicare coverage for prescription drugs

Medicare coverage for prescription medication is addressed in Section 1860 of the Social Security Act. This section of legislation specifically states that only drugs which are administered by a physician and/or under the supervision of a physician are covered by Medicare Part B (prescription medication may be administered in a physician’s office or clinic and also at home). This means that self-administered medication is not covered by Part B benefits. In order to fill in the ‘coverage gap’, or the lack of coverage for self-administered medication, for patients with serious health conditions, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 and subsequent regulations allows and contracts private companies to offer Medicare beneficiaries outpatient prescription drug coverage. This coverage is known as Medicare Part D. Part D coverage is optional and is available to all persons who are entitled to Medicare Part A or enrolled in Part B. However, Part D is not available to Medicare/Medicaid beneficiaries as they will receive prescription drug coverage through Medicaid. Part D coverage has been instrumental in improving access to prescription drug treatment for Medicare beneficiaries with chronic health problems including Sjögren’s syndrome. Cequa (cyclosporine ophthalmic solution 0.09%) has a J-code of J3490 to be used with its National Drug Code (NDC) and was approved by the FDA in August 2018 with a list price of $553 for a 30-day supply. The J-code Miscellaneous Drugs, which applies to drugs that are not identified by a more specific HCPCS code, is often used for medications administered in a physician’s office or self-administered medications. Unfortunately, coverage of self-administered medications in the form of eye drops, even those to treat serious ophthalmic conditions, is not always wildly successful with Part D benefits. Self-administered drugs used to treat non-eye related, systemic conditions may have coverage under Part D consistent with the intent of the legislation; however, Medicare beneficiaries who wish to use cyclosporine eye drops, or Cequa, specifically to treat a serious ophthalmic condition may find it difficult to secure the coverage and best price for their medication. Medicare Part D coverage involves stand-alone prescription drug plans (PDP) and Medicare Advantage Prescription Drug Plans (MAPD). With a PDP, a beneficiary will remain in the Original Medicare plan and purchase a separate plan just for drug coverage. With a MAPD, a beneficiary will receive all Part A, B, and D coverage from one of many types of Medicare Advantage Plans. Duration and cost of participation in Medicare Part D varies extensively and depends on market conditions and the plan chosen. (Desai et al.2022)(Han, 2023)(Baryakova et al.2023)(Dharamsi, 2022)(Erras et al.2023)(Sanchez et al.2020)(Frank et al., 2022)(Yehia, 2020)

2.1. Part D prescription drug coverage

“A big question with Medicare Part D is the ability to access medications for those there. All Medicare Prescription Drug Plans and Medicare Advantage Plans with prescription drug coverage must give at least a standard level of coverage set by Medicare. Plans can vary the list of prescription drugs they cover, which drugs are certain can change in various plans and from year to year, but all Part D plans must cover at least two drugs in the most commonly prescribed categories and classes.”

“Medicare Part D is the newest prescription drug coverage. Cequa is a prescriptive drug which is used for the treatment of dry eye disease. In the United States, people aging 65 or older have a high risk of developing dry eye disease. In many severe cases, due to dry eye disease, medications are required. The prescription drug coverage is available for those who are in the original Medicare program, Medicare cost plans, Medicare Private Fee-for-Service Plans, Medicare Medical Saving Account (MSA) Plans, and some Medicaid programs. Most Medicare Advantage plans offer drug coverage. The Part D coverage is the insurance that helps lower the cost of prescription drugs and helps protect against higher costs in the future. This coverage is offered through private insurance companies and approved Medicare Prescription Drug Plans. You must be enrolled in Part A and/or Part B to enroll in a Medicare Part D Plan. People who enroll will pay an incur a monthly premium. Premium costs and coverage may vary depending on the plan and the insurance company.”

2.2. Formulary and coverage determinations

Formulary determinations typically go through a four-phase process. Phase I consists of a Pharmacy and Therapeutics (P&T) committee who are responsible for development, implementing, and oversight of medication management. P&T committees can consist of a number of health professionals including doctors, pharmacists, and nurses. Phase II consists of internal clinical assessment usually carried out by staff or contracted doctors with the plan. Phase III is an external process involving negotiations between the plan and pharmaceutical companies and usually involves a bid on price for placement of a drug on a higher tier of formulary (higher tier usually means a higher patient copayment with increased cost to the plan). Phase IV is final approval for the formulary.

Formulary is a list of prescription medications that are covered by a prescription drug plan. Medicare requires that Part D plans cover all or substantially all drugs in six categories: antipsychotics, antidepressants, immunosuppressants, antiretrovirals, anticancer, and anti-epileptics. The first category of “All or Substantially All” drugs outlined by Medicare is antipsychotic medications, in which situations for these patients switching medications can be harmful. In order to request coverage of a non-formulary medication, the patient or their prescriber can contact the plan and request a formulary exception. This is a type of coverage.

2.3. Cost-sharing and out-of-pocket expenses

In 2016, the cost-sharing tier for medications covered by Medicare Part D changed. These changes initially increased out-of-pocket costs for patients to over 40% of the cost of the drug. Currently, for single source brand medications like CEQUA (cyclosporine ophthalmic solution) 0.09%, the patient is responsible for 37% of the cost. In the coverage gap known as the “donut hole”, there is a 60% discount on the total cost of the medication. This is paid by the manufacturer and will come with no additional discount from the patient’s cost. This will leave patients responsible for approximately 80% of the total medication cost after the coverage gap until the catastrophic coverage phase. Fortunately, there is a low income subsidy known as “extra help” that significantly decreases the donut hole cost and the catastrophic coverage cost to a minimal amount. This higher coverage availability through all phases of medication acquisition should help to ensure that patients continue the use of the best medication as prescribed by their doctor. As cost has been a significant barrier for medication adherence, this change in cost-sharing has the potential to greatly benefit the patient population.

3. Coverage of cequa under Medicare

According to the Medicare policy, the primary condition for a new medical service or item to be eligible for coverage is for it to be “reasonable and necessary for the diagnosis or treatment of illness or injury.” The necessity, focusing on whether the service is beneficial for the patient, is determined by if the service provides a noticeable improvement on a patient’s condition, prevents the condition from worsening, or prevents potential illnesses. The information whether Cequa would provide a noticeable or significant improvement on a patient’s condition has not been assessed because the final rule on “Removal of Safe Harbor Protection for Rebates Involving Prescription Pharmaceuticals and Certain Pharmacy Benefit Manager Service Fees” that evaluates the drug’s cost effectiveness in relation to its improvement on a patient’s condition has not yet been published. Because the service’s necessity and the improvement the service will provide on the patient’s condition has not been assessed, it is unclear whether Medicare will classify Cequa as “reasonable and necessary” for dry eye and provide coverage for it. However, since Cequa is a rather new method of treatment for dry eye, it could be classified as “reasonable and necessary” if no other comparative and more effective method of treatment for the patient’s condition is available.

3.1. Determining cequa’s eligibility for Medicare coverage

To be eligible for coverage under Medicare, a product must be medically necessary and the service or item must be reasonable and necessary for the diagnosis or treatment of an illness or injury. Four criteria are used to make the determination whether or not an item or service is covered. The first is whether the product is approved by the FDA. We know that Cequa meets this criterion because it was FDA approved in December 2018. The second criterion is whether the product is consistent with medical practice. This means that the product must be consistent with the current standards of medical practice for the diagnosis or treatment of the condition. The next criterion is whether the product is being used for an indication that is in the local or national coverage decision. While Cequa is not a treatment specifically mentioned in the coverage decision, it is a medication for dry eye disease which is the standard of practice in treating ocular inflammation. This takes us to the fourth criterion which is whether the product is used for a Medicare covered indication, as opposed to an off-label indication. Off-label prescriptions are eligible for coverage under Medicare only if the product is listed in a Medicare coverage database. Step 3 of the process is a three-tiered process and Cequa takes the first step which is an automatic process to get a preliminary decision. This is done by submitting a written request to the durable medical equipment carriers’ medical director who will issue a decision within 30 days. The decision is automatically upheld for 60 days. If the decision is adverse, it can be internally reconsidered. (Husereau et al.2022)(Karpecki et al.2023)(Husereau et al.2022)(Rose & Bielory2024)(Vishal Jhanji & Tuli, 2021)(Pappas, 2020)(Hoang, 2022)

3.2. Potential coverage limitations or restrictions

When identifying potential coverage limitations or restrictions of CEQUA under Medicare, it is important to recognize the code to which the drug is assigned. As of current, physicians who administer CEQUA to treat dry eye disease cannot bill Medicare directly, as the drug does not fall under a Part B benefit. Because CEQUA is a self-administered topical drug, it is likely the HCPCS code for the drug will fall under the DME benefit (Part B only covers drugs that are physician-administered at the clinic). This could pose a problem as Medicare has stricter rules in place for accessing Part B benefits compared to Part D benefits. If the CEQUA HCPCS code fell under a Part D benefit, it could be easier for Medicare beneficiaries to access the drug without dealing with higher co-payments or cost-sharing. Steps could potentially be taken to access the drug through Medicare Part D, if the code assignment under Part D and the classification of the drug align with the coverage eligibility requirements. At present, no information is available through specific conference about potential HCPCS codes for the drug and Part B or D coverage.

3.3. Steps to ensure cequa is covered by Medicare

Physicians should assess a patient’s eligibility for Medicare prior to starting CEQUA. Medicare-eligible patients may have an enhanced probability of getting coverage for CEQUA because CEQUA is run of the mill in that it is an FDA-supported ophthalmic reaction for an FDA-supported marker (dry eye infirmity). Since most Medicare organizations join cover offered by Medicare Advantage plans and Medicare Supplement/Medi-gap plans is excited about the Local Coverage Determination (LCD) or National Coverage Determination (NCD) mindful of these assurance systems is critical. It is maybe not difficult to confirm whether there is LCD or NCD joining a said help patients can ask their provider or check the CMS site. In case CEQUA isn’t covered by LCD or NCD patients can regardless have coverage through Medicare Advantage plans or Medi-gap plans since these techniques intermittently cover benefits that are not covered by traditional Medicare. In any case, it is fundamental for patients to review the preference nuances for their specific course of action since coverage and recompense rates change widely among plans. Patients who don’t have Medicare Advantage or Medi-gap plans may regardless have the choice to get coverage from customary Medicare in the event of an exceptional case of need. Any Medicare recipient contemplating ceasing or bringing down their Medicare advantage course of action or changing over to ordinary Medicare to get coverage for CEQUA should think about the potential gain of extended coverage cost and convenience before their decision.

3.4. Alternative options if cequa is not covered

Determine the pharmacy the patient will be using to fill the prescription. If Step 1 fails, the prescriber will have to find an alternative medication to Cystaran to treat the patient’s condition. The alternative medications not accepted for coverage consist of L-cysteine, Mucomyst or any compounded preparation of these medications. Step 3: Complete a Medicare Part D Prescription Prior Authorization Form. Prior Authorizations are required for certain medications to prove medical necessity before the plan will cover the medication. The prescriber will need to complete a Medicare Part D Prior Authorization Form and submit it to their Medicare Part D Drug Plan to request prior authorization. This process will determine if Cystaran is medically necessary for the patient’s condition. If the Prior Authorization is approved, the Medicare Part D Drug Plan will cover Cystaran as a Tier 2 or Tier 3 specialty medication. If your Medicare Part D Drug Plan denies coverage for Cystaran or requests that the patient switch to a less costly alternative medication, you have the right to appeal the decision. Step 4: File a Medicare Part D Coverage Determination Request. If your Medicare Part D Drug Plan denies coverage for Cystaran, the prescriber can file a Coverage Determination Request to ask the plan to cover the medication. Coverage Determination is usually the first step in the process of formal appeal. If the prescriber is successful in requesting a Coverage Determination and the plan approves coverage for Cystaran, the request acts as an approval for the request to dispense the medication at the Patient Care Service (Step 5). If the Coverage Determination is denied or if the prescriber does not feel the approved request meets the patient’s needs, the next step would be a Medicare Part D Redetermination. Step 5: Request a Medicare Part D Redetermination. A Redetermination is the second step in the process of formal appeal. If the request is overturned and the plan agrees to cover Cystaran, the request acts as an approval for the request to dispense the medication at the Patient Care Service (Step 7). If the Redetermination is denied or if not satisfied with the results, there is a final option of a Medicare Part D Reconsideration. Step 6: Request a Medicare Part D Reconsideration. A Reconsideration is the third step of the process of formal appeal and the process is similar to the prior two levels of appeal. At any point during this process, Cystaran may be dispensed and provided to the patient if the applicable request for a level of appeal has been approved. Step 7: Discuss coverage and payment of medications at Patient Care Service. At each step in the process, it is always important to communicate with the Patient Care Service regarding the status of the medication coverage to ensure it is always possible to obtain and then administer to the patient.

4. Conclusion

We believe that our essay “Is Cequa covered by Medicare?” adequately addressed the tough topic concerning the Medicare coverage of Cequa. As our essay mentioned, “Health care costs are increasing at an alarming rate in countries such as the United States, which may cause individuals to neglect their conditions.” This statement holds true for many elderly adults in America. With the average age of onset for dry eye syndrome being 65, it is important for new medications such as Cequa to be included in Medicare coverage so elderly adults have a cost-effective option for treatment. However, we have learned that many medications, including Cequa, are not covered by Medicare. We discussed this tough topic and took the time to research the Medicare coverage of Cequa in order to inform any Medicare beneficiaries seeking treatment for DES. Our main goal was to analyze and interpret the extent of the accessibility of treatment for DES through the use of Cequa for elderly adults who are covered by Medicare. Through extensive research of primary and secondary resources, we believe our results were conclusive in showing that Cequa is not covered by Medicare.

4.1. Importance of understanding Medicare coverage for cequa

Medicare is a primary payer for disease therapy, including drugs covered under the medical benefit and services covered under the durable medical equipment (DME) benefit. The details of Medicare’s coverage for CEQUA are yet to be defined through issuance of a National Coverage Determination, consideration of local coverage decisions, and tracking HCPCS code development. Medicare Part B covers drugs that are not usually self-administered and are given in an outpatient setting, such as a physician’s office. These drugs are reimbursed through AWP+6% as a method to buy and bill the drug and keep the difference as profit. This method of billing has been criticized for creating a financial incentive to use more expensive drugs when equally effective, cheaper alternatives exist. The 6% add-on has been frozen as part of a package of cuts to Medicare provider payments through the sequester order. Due to bipartisan efforts to roll back the sequester order, some have postulated that these cuts will be reversed. After agreeing with my colleagues that it will be important to understand exactly how Medicare determines coverage across medical and pharmacy benefits and how changes may affect drug access, I was initially frustrated to find a lack of central resources or a single source of information for the complex inner workings of Medicare. Despite the lack of user-friendly resources, it is clear that Medicare coverage is crucial for any drug in treating a chronic condition primarily afflicting the elderly. Difficulty of access or low reimbursement can dissuade physicians from using a drug and create wide disparities in its utilization. A drug like CEQUA, as a chronic therapy for dry eye disease with an indication in aqueous tear-deficiency, is precisely the type of medication that Medicare patients would want to access. Changes to provider reimbursement could shape how and when the drug is administered, and changes to HCPCS code tracking might even determine its coverage as a medical benefit versus Part D pharmacy benefit. Patient access would be thwarted if a drug covered under Part B was shifted to Part D due to recent changes in the Bipartisan Budget Act. Better understanding of these nuances will require tracking changes in multiple databases and potentially interaction with CMS regional offices.

4.2. Summary of key points discussed

For example, a patient with chronic blepharitis or meibomian gland dysfunction may have significant dry eye symptoms. Restasis is an effective treatment for this condition, but often does not improve symptoms sufficiently. The patient may greatly benefit from using a short-term steroid with Restasis, such as Lotemax. If the patient cannot tolerate or is not a candidate for generic steroid eye drops due to preservatives, this can be a costly endeavor. In January of 2020, a 3mL bottle of Lotemax ophthalmic suspension costs over $300. Even if a patient is successful in using patient assistance programs to obtain free drug from the pharmaceutical company, it is often a lengthy and difficult process.

Medicare and Medicaid services have a tremendous impact on the treatment options for individuals suffering from a wide variety of common ocular diseases. A number of patients have chronic conditions for which a medication can be very effective, but if that medication is not covered by Medicare, it becomes unrealistic and unaffordable for the patient. The financial burden then falls on the patient, the physician, or the patient’s family. This can lead to the patient either not receiving the medication at all, or experiencing a decreased quality of life so that they can afford medication expenses. In some cases, the patient is able to receive free drug through physician samples and patient assistance programs offered by the pharmaceutical company, but this is not a reliable long-term solution. In order to qualify for assistance through patient assistance programs, the patient usually must first spend several months attempting other treatments that are covered by Medicare even if, in the physician’s opinion, those treatments are not as effective.

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