MedPAC Uses AHRQ Data to Help Inform Prescription Drug Coverage

The Medicare Payment Advisory Commission (MedPAC) used Medical Expenditure Panel Survey (MEPS) data as one of several data sources in a report titled, "Report to the Congress: Issues in a Modernized Medicare Program: June 2005." MedPAC used MEPS data to examine two questions:

• How much geographic variation in drug spending exists?
• What might premiums look like, assuming that all Part D plans have their regions' average mix of enrollees?

In answer to the first question, MEPS 2002 and other data showed that per-capita drug spending in the South is somewhat higher than the national average, and that spending in the West is lower than average. A number of factors are likely to be associated with geographic differences in drug spending, including the health status of those who live in a region, the number of providers who operate in the area, regional differences in prescribing patterns, the average incomes of beneficiaries in each region, and the availability of health and drug coverage.

To answer the second question, MedPAC asked Direct Research, LLC, to map nationwide average transaction prices for each national drug code (NDC) in 2001 MEPS data to NDCs listed on private-payer drug claims to gather price information. These data were not representative of the Medicare population as a whole. They were used for a hypothetical simulation of what average premiums might look like for basic Part D coverage in each of the Centers for Medicare & Medicaid Services' (CMS) 34 prescription drug plan regions and to examine how much premiums might vary across regions.

MedPAC is an independent federal body established by the Balanced Budget Act of 1997 (P.L. 105-33) to advise the U.S. Congress on issues affecting the Medicare program. In addition to advising Congress on payments to private health plans participating in Medicare and providers in Medicare's traditional fee-for-service program, MedPAC also analyzes access to care, quality of care, and other issues affecting Medicare.

The report can be viewed at: http://www.medpac.gov/documents/June05_Entire_report.pdf [PDF file, 2 MB; ].