Medicare Modernization Act of 2003

Eric G Handler M.D., M.P.H., FAAPChief Medical OfficerBoston Regional Office

Centers for Medicare & Medicaid Services

617-565-1319 Eric.Handler@cms.hhs.gov

Some Interesting Statistics

• 2003– Medicare paid 272.6 billion dollars

• 2004– Nearly 42 million persons in Medicare

• 2030– Projected 70.5 million persons over 65

Almost doubled in only 30 years

Components of the Medicare Modernization Act of 2003

• Beneficiaries– Drug Coverage– Health Plans – Preventive Services

• Providers– Payment Changes– Contractor Reform– Rural Health Changes

• Other– Appeals Process Changes– Demonstration Projects– Quality Initiatives

Eligibility and EnrollmentPrescription Drug Benefit

• Must have Part A and/or Part B

• Enrollment in drug coverage is voluntary

• Will NOT be enrolled automatically – must make a decision to sign up for drug plan

Options for Coverage Prescription Drug Benefit

• Stand alone prescription drug plan (PDP)

• Through a Medicare Advantage plan (MA-PD)

• Retiree options through employers and unions

Enrollment into a Prescription Drug Benefit

• Join directly with the plan sponsor

• Can get help joining

– Legal representative

– Spouse, other relative, friend, or advocate

• Initial Enrollment Period

For people entitled to Medicare before February 2006

November 15, 2005 through

May 15, 2006

For people entitled to Medicare on February 1, 2006, or later

7-month period

Late Enrollment Prescription Drug Benefit

• Most people will have to pay a penalty if they wait to join

– Premium will go up 1% per month for every month the person was eligible but did not join

– The person will have to pay this penalty as long as they have a Medicare Prescription Drug Plan

• Unless they have other prescription drug coverage that is, on average, at least as good as the minimum standard Medicare prescription drug coverage

Automatic Eligibility for Extra Help Prescription Drug Benefit

• Some people may automatically qualify

• People with Medicare who

– Get full Medicaid benefits

– Get Supplemental Security Income (SSI)

– Get help from Medicaid paying their Medicare premiums

• All others must apply

August 24, 2005 *NF-Nursing Facility/Institutionalized

$0 Co-pay

Auto Enrolled January 1, 2006

$1 Generics$3 Brand

*NF $0 Co-pay

$0Deductible

$0Premium

Group 1Medicare/Medicaid

Income < $9,570 (S)<$12,830 (M)

Deemed Eligible For Extra Help

$2 Generic$5 Brand

Must apply for LIS

$2 Generic$5 Brand

Must apply for LIS

$0Co-pay

Facilitated Enrolled May 15, 2005

Catastrophic Coverage5% in spending on covered

Part D drugs after the enrollee has incurred out of

pocket costs greater than $3,600

(equivalent to $5,100)

15% Coinsurance

15% Coinsurance

$2 Generics$5 Brand

*NF $0 Co-pay

Initial Benefit25% in spending on

covered Part D Drugs $250.01-2,250

No coverage of costs$2,250.01-5,100

$50 Deductible

$50 Deductible

$0Deductible

Annual Deductible$250 in spending on

covered Part D Drugs

Sliding-Scale (based on income)

$0Premium

$0Premium

Monthly Premium$30.25

Benchmark

Group 4Income < $14,355 (S)

<$19,245 (M) and assets below

$11,500 single$23,000 married

Group 3Income < $12,920 (S)<$17,321 (M) and

assets below$11,500 single

$23,000 married

Group 2Income <$12,920 (S)<$17,321 (M) and

assets below$7,500 single

$12,000 married

Standard Benefit

Without Extra Help

Cost Sharing and Extra Help

(S) Single(M) Married Couple

DMO Boston Region

Long-Term Care FacilitiesPrescription Drug Benefit

• Residents– Obtain drug benefits from pharmacy chosen by the

facility– Can change plans at any time if they have both

Medicare and full Medicaid benefits– Will have convenient access

• Those who qualify for extra help have no deductibles and no copayments

Programs to Help Pay ExpensesPrescription Drug Benefit

• State Pharmacy Assistance Programs (SPAPs)

– SPAPs provide assistance to certain state residents for drug costs.

– May cover premiums, deductibles, cost-sharing,

and drugs not covered under Part D

– Available in 21 states

Employer/Union Coverage Prescription Drug Benefit

• People with Medicare and employer/union coverage will get important information in the mail from their plan sponsor

• They should contact their benefits administrator before making any changes

• Choices to make– Keep coverage offered by employer/union– Join a Medicare Prescription Drug Plan– Join a Medicare Advantage Plan or other Medicare

Health Plan with prescription drug coverage

NOTE: If a Medicare beneficiary drops or loses their employer/union coverage, they may not be able to get it back

Medicare Prescription Drug Coverage

• Covers drugs available only by prescription

• Prescription drugs, biologicals, insulin

• Medical supplies associated with injection of insulin

• A prescription drug plan (PDP) or MedicareAdvantage prescription drug (MA-PD) planmay not cover all drugs

• Brand name and generic drugs will be in each formulary

Formularies: Excluded Drugs Prescription Drug Benefit

• Agents when used for anorexia, weight loss, or weight gain

• Agents when used to promote fertility• Agents when used for cosmetic purposes or hair growth• Agents when used for symptomatic relief of cough and

colds• Prescription vitamins and mineral products, except

prenatal vitamins and fluoride• Non-Prescription Drugs• Barbiturates• Benzodiazepines• Any drug for which, as prescribed and dispensed or

administered to an individual, payment would be available under Medicare part A or part B for that individual

Formularies: Covered Drugs Prescription Drug Benefit

Each plan will have to cover “all or substantially all” the drugs in the following classes:

• Antidepressants• Antipsychotic• Anticonvulsant• Anticancer• Immunosuppressant • HIV/AIDS

Excluded Drug Coverage by State Medicaid Programs

Beneficiary Protections Prescription Drug Benefit

• PDPs and Medicare Advantage Drug Prescription plans have to accept all eligible enrollees in service areas

• All enrollees must receive same benefits and be charged uniform premium

• Plans to have timely, understandable grievance, appeals, and coverage determination processes

• Enrollees can file an external appeal

Changes to Formularies Prescription Drug Benefit

• Plans can change the formulary at any time other than between November 15 and March 1

• Plans must provide advance written notice to at least those enrollees taking the drug

• Written notice must be provided at least 60 days prior to effective date of change

Transition Process Prescription Drug Benefit

• Each Plan required to have a transition process.

• Example could be “having the non-formulary covered drug supplied for 72 hours while being appealed”

• CMS reviewed each plan’s transition process before they were approved.

• The enrollee is using a drug that has been removed from the formulary

• A non-formulary drug is prescribed and is medically necessary

• The cost-sharing status of a drug an enrollee is using changes

• A drug covered under a more expensive cost-sharing tier is prescribed because the drug covered under the less expensive cost-sharing tier is medically inappropriate

Enrollees Exception RequestsPrescription Drug Benefit

Enrollees Exception RequestsPrescription Drug Benefit

Exception request requires physician support

• Preferred drug would not be as effective

as the requested drug

• Requested drug would adversely affect

enrollee

5-Level Appeals Process

• Redetermination by plan sponsor

• Reconsideration by Independent Review Entity

• Review by Administrative Law Judge

• Review by Medicare Appeals Council

• Review by Federal District Court

Timeframe for Coverage Determinations for PlansTimeframe for Coverage Determinations for Plans

Enrollee or physician requests

exception

Request expedited review

Request normal review

Request denied

Request granted: receive coverage

Expedited review rejected

In 24 hrs

Decision

in 72 hrs

Decision

Request granted: receive coverage

Request denied

Redetermination

Request granted: receive coverage

Request denied

Appeal leaves plan

7 days std 72 hrs exp

24hr72hr

Timeframe for Coverage DeterminationsTimeframe for Coverage Determinationsbeyond the planbeyond the plan

Independent Review Entity (IRE)

Administrative Law Judge (ALJ)

Medicare Appeals Committee (MAC)

Request denied

Request granted: receive coverage

Request denied

Request granted: receive coverage

Judicial Review

72 hrs

Marketing Prescription Drug Benefit

CMS issued marketing guidelines

• Available at http://www.cms.hhs.gov/pdps/PrtDPlnMrktngGdlns.asp

• Door-to-door sales and unsolicited emails prohibited

– But cold calling permitted, subject to FTC “do-not-call” list and do-not-call requests

• Non-compliant plans can be subject to closure of new enrollment; referral to OIG; imposition of CMPs; other law enforcement sanctions

Marketing Prescription Drug Benefit

• Physicians, pharmacists, and other health care professionals can provide information on plans, benefits, cost-sharing, formularies, etc.

• Providers can display plan marketing materials and information regarding the provider’s relationship with the plan.

• But a provider can’t steer a beneficiary to a plan based on the provider’s financial interest.

The State Health Insurance Assistance Program SHIP Program

The State Health Insurance Assistance Program, or SHIP,is a national program that offers one-on-one counselingand assistance to people with Medicare and their families. Through federal grants directed to states, SHIPs providefree counseling and assistance via telephone and face-toface interactive sessions, public education presentationsand programs, and media activities.

Web Site: www.shiptalk.org

Serving Health Information Needs of Elders SHINE

Toll Free: (800) 243-4636

www.shiptalk.org

More Information for Health Care Professionals

– Toolkit and training materials for healthcare professionals http://www.cms.hhs.gov/medlearn/provtoolkit.pdf

– Medicare Prescription Drug Coverage Information for Provider Page

http://www.cms.hhs.gov/medlearn/drugcoverage.asp – Official U.S. government website for people with

Medicare http://www.medicare.gov

Health Care ProfessionalsCME PowerPoint

CMS Web Tool Prescription Drug Benefit

• Web tool to help with plan selection • Individualized report base on drugs• Can tell if person is in an employer plan that

is taking a subsidy• Will give monthly and annual cost estimates based

on drugs and plan selected• Drugs that have a prior authorization or a part of

step therapy should be flagged

National Prescription Drug Benefit

Mass. Stand-Alone OrganizationPrescription Drug Benefit

(3 with premiums<$20)

Mass. Medicare Advantage PD PlansPrescription Drug Benefit

Mass. Stand-Alone PDPs to Receive Auto-Enrolled Beneficiaries

Landscape of Local Plans

• November 15, 2005: Initial Enrollment Period Began

• January 1, 2006: Drug coverage starts for those who join by December 31, 2005

• May 15, 2006 : Initial Enrollment Period ends

• June 1, 2006: Facilitated enrollment for people who qualified for extra help but did not join a drug plan by May 15, 2006

Important Dates