Medicare Part D claims rejections for nursing home residents, 2006 to 2010.

OBJECTIVES: Much has been written about trends in Medicare Part D formulary design and consumers' choice of plans, but little is known about the magnitude of claims rejections or their clinical and administrative implications. Our objective was to study the overall rate at which Part D claims are rejected, whether these rates differ across plans, drugs, and medication classes, and how these rejection rates and reasons have evolved over time. STUDY DESIGN AND METHODS: We performed descriptive analyses of data on paid and rejected Part D claims submitted by 1 large national longterm care pharmacy from 2006 to 2010. In each of the 5 study years, data included approximately 450,000 Medicare beneficiaries living in long-term care settings with approximately 4 million Part D drug claims. Claims rejection rates and reasons for rejection are tabulated for each study year at the plan, drug, and class levels.
RESULTS: Nearly 1 in 6 drug claims was rejected during the first 5 years of the Medicare Part D program, and this rate has increased over time. Rejection rates and reasons for rejection varied substantially across drug products and Part D plans. Moreover, the reasons for denials evolved over our study period. Coverage has become less of a factor in claims rejections than it was initially and other formulary tools such as drug utilization review, quantity-related coverage limits, and prior authorization are increasingly used to deny claims.
CONCLUSIONS: Examining claims rejection rates can provide important supplemental information to assess plans' generosity of coverage and to identify potential areas of concern.