I. Conference Call Information
II. In the News
New Limited Open Enrollment Period for MA-Only Plans
III. Helpful Information
Report: CMS Oversight of Health Plans and Agents is Inadequate to Protect Beneficiaries
CMS Releases Redetermination of Low-Income Subsidy (LIS) Eligibility for 2007
CMS Reports Generic Drug Use on the Rise
CMS Releases Extra Help Tip Sheet
IV. HAP News and Resources
Congressional Testimony Calls for Increased SHIP Funding
Welcome Deepti Sethi!
Conference Call Information
In follow up on last week’s conference call, during which several callers shared reports about marketing misconduct involving the sale of Medicare Advantage plans, HAP is drafting a letter to send to our colleagues at CMS. The letter will cite examples of unscrupulous marketing tactics and stress the need for CMS to protect the interests of SHIP clients. We will keep you posted on developments.
HAP’s next conference call for the SHIP Network is scheduled for Wednesday, March 21, at 3:00 p.m. Eastern Time. Please look for an email announcement with details about the call earlier that week.
In the News
New Limited Open Enrollment Period for MA-Only Plans
On February 21, CMS sent an email to SHIPs and other partners announcing a new Enrollment Period for Medicare Advantage (MA) plans. This Limited Open Enrollment Period (L-OEP) was created by section 206 of the Tax Relief and Health Care Act (TRHCA) of 2006 and enacted on December 20 last year. The L-OEP enables Medicare Advantage plans without Part D prescription drug coverage (including Private-Fee-for-Service and Coordinated Care Plans, but not Medical Savings Accounts) to enroll beneficiaries from Original Medicare into their MA-only products throughout 2007 and 2008. In effect, MA-only plan sponsors will be able to sell their products regardless of the enrollment periods that apply to other MA plans.
The L-OEP raises some concerns among Medicare advocates because it allows people who are enrolled in Original Medicare and a stand-alone Prescription Drug Plan (PDP) to lose their Part D drug coverage if they join an MA-only Coordinated Care Plans (i.e., Medicare HMOs and PPOs) during the year. In effect, a decision to join an MA-only Coordinated Care Plan after March 31 will cancel a person’s PDP coverage; without Part D coverage for the rest of the plan year, a beneficiary risks being subject to late enrollment penalty upon reenrollment. Additionally, there is concern that some sales agents may convince people to enroll in MA-only Coordinated Care Plans without fully informing them that they will lose their PDP coverage as a result.
Medicare Advantage plans learned officially of CMS’s approach to the L-OEP two weeks before the partners did. On February 7, Anthony Culotta, Director of CMS’s Medicare Enrollment and Appeals Group, sent a memorandum to all Medicare Advantage plans. The memo described the L-OEP and set forth a new procedure to protect people from unintentionally dropping their Part D coverage.
To protect consumers, CMS informed the plans that they “must contact the beneficiary to confirm the beneficiary’s intent to enroll in the MA-only plan.” CMS wants the plans to ensure that beneficiaries “understand that enrolling in the MA-only plan at this time will automatically cancel his or her PDP enrollment and may impact other drug coverage provided by an employer or union group.” The memo provides no script for the plans to use during phone calls to confirm beneficiary intent, nor does it detail who can—or cannot—be involved in these determinations of beneficiary comprehension. Conceivably, an MA plan’s marketing staff could be tasked with making this important “consumer protection” call to a vulnerable beneficiary.
Although the TRHCA states that nothing in the law that permits a person to enroll in a MA-only plan during the L-OEP “shall be construed as permitting an individual who is enrolled in a prescription drug plan under Part D, to disenroll from such plan.,” CMS will nevertheless allow disenrollments. The agency’s interpretation of the TRHACA is arguably inconsistent with the law itself and the Culotta memo is silent on the issue. With this in mind, several organizations have signed on to a letter sent by the California Health Advocates to CMS that raises concerns about the agency’s apparent misinterpretation of the TRHCA. California Health Advocates is a statewide back-up center for California’s local HICAP (SHIP) programs.
Helpful Information
Report: CMS Oversight of Health Plans and Agents is Inadequate to Protect Beneficiaries
California Health Advocates (CHA) and the Medicare Rights Center (MRC) recently released an Issue Brief entitled “After the Goldrush: The Marketing of Medicare Advantage and Part D Plans”. The sixteen-page brief examines the connection between widespread reports of marketing misconduct and CMS’s minimalist approach to health plan oversight. The brief cites numerous case studies and examples, provided by HICAP (SHIP) counselors in California and New York, which illustrate the threat to health care access that beneficiaries face. Finally, it offers recommendations for a number of legislative and regulatory changes.
The issue brief draws special attention to the nexus between high federal payments to Private-Fee-for-Service (PFFS) plans and aggressive marketing to dually eligible Medicare beneficiaries. The brief states that CMS’s capitation payments to PFFS plans average 119 percent of the average cost of care per beneficiary in the Original Medicare program. Coupled with low administrative costs and an exemption from the bid process that applies to other MA plans, the high payments to PFFS plans have created a “Buyer Beware” sales climate.
In one incident, an agent persuaded thirty-three primarily Spanish speaking duals to switch to a Secure Horizons PFFS plan that their doctors refused to accept. In another, an agent showed up uninvited at the door (contrary to Medicare’s marketing guidance), carrying with him a clipboard with a list of contacts. His aim was to switch members of the plan sponsor’s PDP to its more lucrative PFFS plans. The incentive for agents and brokers is clear. They earn $60 to $80 for enrolling a person in a stand-alone PDP. In contrast, they earn $400 to $500 for enrolling someone in an MA product.
SHIP staff and volunteers in other states are echoing these concerns. A counselor in Texas reported to HAP that a DME supplier came to a client’s home to reclaim a hospital bed and wheelchair after learning that she had joined a PFFS plan. The provider did not accept payments from the PFFS plan. An agent had led the beneficiary to believe that plan worked with all providers who participate in Original Medicare.
Despite these problems, PFFS plan enrollment is booming. The Kaiser Family Foundation’s January 2007 report on Medicare Advantage plan enrollment shows that 1,047,383 persons are now enrolled in PFFS plans nationwide, a 17.5 percent jump from enrollment figures for the previous month.
For SHIPs, the implications are clear. With the new Limited Open Enrollment Period (L-OEP) for MA-Only plans (see above), PFFS plan sponsors can now market their products year-round. The need for education efforts that deliver objective information about PFFS plans, and at the same time raise community awareness of the potential for marketing abuses, continues. The many reports of recent PFFS plan enrollees who say that agents misled them also mean that SHIPs must be prepared to help clients with efforts to disenroll from these plans.
HAP is prepared to help. If you have questions about CMS’s marketing guidance and disenrollment rules, please contact us at shipehelp@hapnetwork.org. We also invite you to share your stories with us and the SHIP network. Along with others in the Medicare beneficiary advocacy community, HAP intends to track reports of marketing misconduct, fraud and abuse and bring them to the attention of policy makers.
CMS Postings
CMS Releases Redetermination of Low-Income Subsidy (LIS) Eligibility for 2007
On February 5, Abby Block, Director of CMS’s Center for Beneficiary Choices, released a memo outlining updated guidelines for redetermination of LIS eligibility for 2007. As was noted in previous 2007 redetermination guidelines, SSA was required in August 2006 to notify in writing those beneficiaries who had been deemed eligible for LIS before May 2006. The purpose of these letters was to confirm beneficiaries’ asset information. Those who did not have any changes to report did not need to take any action. Those who did have changes in income, resources or household size were asked to fill out a redetermination form, Form 1026B. SSA reports that these forms have been processed and beneficiaries have been notified of their redetermined LIS status. Reductions or terminations of LIS benefits became effective February 1, 2007. According to SSA, beneficiaries who did not return Form 1026B will be notified sometime in February that they will lose their LIS benefit on March 1, 2007. However, SSA is still processing redetermination forms and beneficiaries are still sending 1026B forms to be processed. These beneficiaries will receive notice in the future if their LIS status changes.
CMS has also amended the existing Special Enrollment Period (SEP) for LIS eligible beneficiaries who will lose LIS benefits later in the year. This SEP will give these beneficiaries a one-time opportunity to enroll in or switch Part D plans from January 1 through March 31 of each year. If they are notified after this period, the SEP will begin the month they were notified and last an additional two months.
CMS reports that plans will be notified of changes in beneficiary LIS benefits through three different files: 1)the Weekly Transaction Reply Reports (TRRS), which was sent on February 3; 2)the Bi-Weekly Deemed LIS/Premium Report Data File (LISPRMD) released on February 4; 3)and the Full Enrollment File, which was released on February 21.
CMS Reports Generic Drug Use on the Rise
On February 8, CMS issued a press release highlighting the agency’s new data on generic drug use among people enrolled in the Part D plans. These data show that nearly sixty percent of drugs dispensed through the third quarter of 2006 to Part D plan and Medicare Advantage enrollees were generics. Furthermore, generic use among this group is thirteen percent higher than that of private third-party payers. According to CMS this is one reason why Part D is reporting significant savings.
CMS Releases Extra Help Tip Sheet
On February 9, CMS circulated a tip sheet to partners about qualifying for extra help and joining a Part D drug plan. This resource details information on extra help eligibility, asset requirements, enrollment guidelines, and SEP details for beneficiaries losing their LIS benefits.
HAP News and Resouces
Congressional Testimony Calls for Increased SHIP Funding
The Senate Aging Committee invited HAP to appear at a hearing on January 31 that considered strategies for eliminating barriers to LIS enrollment. Ellen Leitzer, HAP’s Executive Director, delivered testimony about several LIS problems that state and local SHIPs have brought to HAP’s attention. She noted, for example, that the system for real-time data sharing among CMS, the Social Security Administration and the drug plan sponsors does not work properly and that CMS’s insistence on dealing with problems on a case-by-case basis side-steps the need for systemic solutions.
At the close of her testimony, Ms. Leitzer recommended that Congress take steps to return the LIS co-payment amounts to their original 2006 levels, eliminate the asset test, and exclude in-kind support as countable income. She called on the committee to work with their Congressional colleagues and CMS to increase SHIP’s annual funding to at least one dollar per beneficiary. She pointed out that this would set SHIP funding at roughly $43 million in contrast to the $440 million that Pearson Government Solutions, CMS’s call center operator, received for its thirty-month contract. She also mentioned for the committee’s benefit, that Pearson’s customer service representatives routinely refer callers to SHIPs for more information and assistance.
At a separate hearing on Health Care Access and the Aging of America, Ron Pollack, Executive Director of Families USA, told members of a House Appropriations subcommittee that SHIPs are the best source of objective information and expert counseling on the pros and cons of Medicare Advantage and Part D drug plans. In his statement, Mr. Pollack urged the committee to increase SHIP funding to at least one dollar per beneficiary, “with appropriate increases thereafter.”
Welcome Deepti Sethi!
Please join us in welcoming Deepti Sethi to HAP’s staff. Ms. Sethi comes to HAP from the Center for Health Care Rights based in Los Angeles, California. She served there as the supervising attorney for the Health Insurance Counseling and Advocacy Program (HICAP/SHIP). In that capacity, Ms. Sethi supervised a staff of paralegal health insurance specialists and volunteers who provide direct services to Medicare beneficiaries and their caregivers. Ms. Sethi joins HAP as a Senior Medicare Analyst, starting on March 1. You can contact her at dsethi@hapnetwork.org.
