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I. Conference Call Information
II. In the News
Seven companies suspend PFFS plan marketing
III. Reports
MedPAC concerned with MA program’s inefficiencies
Mathematica questions value of PFFS plans
CBO ties MA plan payments to Part A trust fund exhaustion
PFFS primer for advocates now available
GAO calls for Part D LIS improvements
Commonwealth report recommends Part D improvements
IV. New from CMS
CMS issues 2008 Guidance
Prescription Drug Manual updates and additions
CMS details responsible marketing practices for PFFS plans
V. Congressional Hearings
SHIP Steering Committee Chair testifies on MA marketing abuses
Hearing raises concerns about CMS oversight for Part D and MA plans
VI. Useful Information
New Important Message from Medicare for hospital inpatients
Annual LIS Mailings
Hospital quality of care measures compared on CMS website
Report examines Part D in long-term care settings
VII. News and Information from HAP
I. Conference Call Information
On July 2, 2007, CMS published a Notice of a New System of Records entitled SHIP-NPR in the Federal Register. CMS is accepting comments on this notice through August 4th. During our conference call, HAP will discuss the notice and its potential impact on SHIP programs. The proposed new system of records will collect beneficiary name, counseling zip code, beneficiary zip code, telephone number, date of birth, gender, race/ethnicity, and date of contact, among other elements. CMS also lists potential "routine use" disclosures where individually identifiable information could be released without a beneficiary's consent. HAP has received many questions regarding how this proposal affects current reporting for SHIPs with proprietary data systems, what the parameters are for the proposed routine use disclosures, impacts of these disclosures on statements of "confidential" counseling, and other privacy concerns. We look forward to discussing these questions and others that may arise.
HAP hosts these interactive conference calls for SHIPs and other members of the SHIP community, including national advocates and CMS.
II. In the News
Seven companies suspend PFFS plan marketing
On June 15, 2007 CMS announced that seven insurance companies had agreed to suspend the marketing of Private-Fee-for-Service (PFFS) plans. The seven companies’ plans cover 90 percent of PFFS enrollees. Medicare beneficiaries may still enroll in those plans independently, but agents and brokers may not enroll beneficiaries in them until CMS reviews and approves the marketing and sales protocols of those plans.
As part of CMS' June 15th announcement on the agreement to suspend PFFS plan marketing, the agency also announced a new Exceptional Circumstance Special Enrollment Period (SEP). This SEP is for individuals who have enrolled in Medicare Advantage plan, including PFFS plans, based on misleading or incorrect information provided by plan employees, agents, or brokers.
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III. Reports
Government watchdogs and other organizations have issued a number of reports in recent months about the Medicare Advantage and Medicare Part D prescription drug programs. These reports, among others, provide some of the context for Congressional and agency action to address some of the systemic problems in the Medicare Part C and Part D programs.
MedPAC concerned with MA program’s inefficiencies
The June Medicare Payment Advisory Commission (MedPAC) report to Congress states that Medicare Advantage (MA) plans now cost billions of dollars more than traditional Medicare. MA plans are paid an average of 12 percent more than traditional Medicare. MedPAC also pointed to county benchmark payments (the basis for payment to MA plans) that average 16 percent more than payments in traditional Medicare, as a contributing factor to enrollment growth in the least efficient type of MA plan, the Private-Fee-for-Service (PFFS) plans. MedPAC estimates that the resulting overpayments will add up to $54 billion over five years and $149 billion over 10 years.
Mathematica questions value of PFFS plans
In a Health Affairs publication, Marsha Gold, a senior fellow at Mathematica Policy Research, documents the increase in Private Fee-for-Service (PFFS) MA plans and suggests that these plans are not worth the cost. Gold cites MedPAC's finding that "while PFFS plans were paid at 119 percent of Medicare, it cost the plans 110 percent of Medicare to provide Medicare Parts A and B benefits. In contrast, HMOs were paid 110 percent of Medicare rates, but they could provide Medicare Parts A and B benefits at 97 percent of what Medicare spends on Parts A and B services in the traditional program." Gold asserts that PFFS plans offer fewer benefits than HMOs despite higher payments. She points out that "beneficiaries as a whole may be harmed if higher payments add to the fiscal stress on Medicare, making the program less viable in the long run." She also concludes that "MA firms stand to lose as much as other stakeholders if [firms'] practices erode beneficiary trust."
CBO ties MA plan payments to Part A trust fund exhaustion
On June 28th the Congressional Budget Office (CBO) released an issue brief on MA plans that discusses payments to MA plans and the impact on Medicare beneficiaries. The CBO reports that as of last month, about 18 percent of Medicare beneficiaries are enrolled in Medicare Advantage plans. The CBO noted that reducing the difference in payment between Medicare Advantage and traditional Medicare “could result in substantial savings to the Medicare program,” and would delay the exhaustion of the Part A (hospital insurance) trust fund.
Families USA released a shorter report on June 22nd regarding payments to Medicare Advantage plans.
PFFS primer for advocates now available
A report by the Center for Medicare Advocacy, Medicare Advantage Private Fee-for-Service (PFFS) Plans: A Primer for Advocates, outlines the legal requirements that PFFS plans must meet and contrasts these with the requirements for other MA plans. In addition, the report compares cost-sharing for key Medicare benefits in PFFS plans, traditional Medicare, and traditional Medicare with a Medigap policy.
GAO calls for Part D LIS improvements
The Government Accountability Office issued a report, Medicare Part D Low-Income Subsidy: Additional Efforts Would Help Social Security Improve Outreach and Measure Program Effects, on June 22 recommending that the Social Security Administration (SSA) improve its processes for the Part D low-income subsidy (LIS). The GAO highlighted the need for performance goals and measures in SSA outreach, along with a need for greater collaboration with the Internal Revenue Service (IRS) to identify eligible individuals.
Commonwealth report recommends Part D improvements
The Commonwealth Fund released a report authored by Laura Summer of Georgetown University’s Health Policy Institute, Trish Nemore of CMA, and Jeanne Finberg of NSCLC, Improving theMedicare Part D Program for the Most Vulnerable Beneficiaries, that discusses challenges that Medicare beneficiaries who qualify for Medicaid--the dually eligible--face as they navigate the complexities of Part D. The report offers several recommendations to strengthen the Part D program, including the elimination or amendment of the resource test and a call for Congress to ensure ample support for counseling and assistance programs.
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IV. News from CMS
CMS issues 2008 Guidance
CMS has released new 2008 Prescription Drug Plan (PDP) enrollment guidance, MA enrollment guidance and Cost plan enrollment guidance. Notably, effective June 20, 2007 individuals who qualify for LIS and are not dual eligible have a Special Enrollment Period (SEP) beginning the month they are eligible for LIS and continuing throughout their eligibility. This SEP allows those with LIS to change plans on a monthly basis. Enrollments take effect the first of the month following the plan’s receipt of the request.
On June 8th, CMS released revised Chapter 4 "Benefits and Beneficiary Protections" of the Medicare Managed Care Manual. Included in this chapter are updates to vaccine coverage.
Part D covers the shingles vaccine (Zostavax) for 2007 and 2008. In 2007 only the vaccine, not its administration, was paid under Part D. CMS has shifted the entire cost to Part D for 2008, and issued a memo to plans regarding this change. If a beneficiary goes to an in-network pharmacy of his or her Part D plan, and the pharmacy not only dispenses but also administers the vaccine, the pharmacy would process a single claim to the Part D plan and collect a co-pay from the beneficiary. If a beneficiary goes to a physician's office to get the vaccine, the physician would provide the vaccine and its administration and then bill the beneficiary for the entire charge. The beneficiary would have to submit a paper claim to the Part D plan for reimbursement for both the vaccine and its administration.
Prescription Drug Manual updates and additions
CMS issued guidance on creditable coverage period determinations and the late enrollment penalty. This information will comprise Chapter 4 of the Medicare Prescription Drug Benefit Manual. Under this guidance, plans determine whether an individual held creditable coverage prior to enrollment and assess whether an enrollee should be subject to the late enrollment penalty.
A new Section 80.7.1 of Chapter 18 of the Prescription Drug Benefit Manual, along with Appendices 14 and 15, describe the plan’s role in the late enrollment penalty reconsideration process. The late enrollment penalty (LEP) notification letter, Part D LEP reconsideration notice, and the LEP reconsideration request form advise the enrollee that he or she has 60 calendar days from the date on the LEP letter to request reconsideration of the LEP. Reconsideration of this penalty is conducted by an Independent Review Entity (IRE) and the results can not be appealed by a beneficiary.
Chapter 7 of the Medicare Prescription Drug Benefit Manual contains information about Part D sponsor requirements regarding: quality assurance, medication therapy management, e-prescribing and drug utilization management.
CMS details responsible marketing practices for PFFS plans
On May 25, 2007 CMS issued a memo to PFFS plans promoting responsible marketing processes and best practices. Plans are encouraged to implement CMS’s suggestions as soon as possible but are not required to do so until October 1, 2007. These requirements include:
- Effective immediately, plans must submit sales presentation schedules
- Effective immediately, marketing may not imply that PFFS plans serve as Medicare supplements
- Any statement made in sales presentations that enrollees may see any provider must also include model disclaimer language:
“...who agrees to accept our terms and conditions of payment”
- Must provide enrollees a leaflet
- Outbound education and verification calls prior to processing new applications
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V. Congressional Hearings
SHIP Steering Committee Chair testifies on MA marketing abuses
The House Energy and Commerce Subcommittee on Oversight and Investigations held a hearing June 26th on predatory sales practices in Medicare Advantage. Kathleen Healey, State SHIP Director for Alabama and the newly elected Chair of the SHIP Steering Committee, testified. Recommendations of witnesses included developing a regulatory model similar to the one for Medigap supplemental plans allowing states to take action against the MA plans, increasing oversight and requirements for training, eliminating commission structures and payment structures that favor PFFS sales, and increasing support and funding for SHIPs.
Hearing raises concerns about CMS oversight for Part D and MA plans
The House Ways and Means Health Subcommittee held a hearing on June 21st. Testimony included criticism of CMS’s oversight of Medicare Part D drug plans and Medicare Advantage plans, and recommendations for improvements to the program.
Chairman Pete Stark, D-CA, hopes to move legislation this summer that would tighten oversight of drug coverage plans offered under the Medicare Part D prescription drug program. Leslie Norwalk, Acting Administrator for CMS, testified that CMS has been working with the plans and states to improve data systems flow that is impeding beneficiary access. CMS claims that it is taking vigorous action to address violations that are misleading or defrauding of beneficiaries. The House Ways and Means Subcommittee on Health held a hearing on Private Fee-for-Service plans on May 22nd where accounting from CMS was requested by the Subcommittee.
On the May 15th House Energy and Commerce Health Subcommittee advocates for Medicare beneficiaries requested that Congress eliminate the asset test for the Medicare Savings Programs (MSP) that assist low-income beneficiaries with Part B costs and the Low Income Subsidy (LIS) program that lower Part D costs.
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VI. Useful Information
New Important Message from Medicare for hospital inpatients
Effective July 1, 2007, hospitalized Medicare beneficiaries will receive an Important Message from Medicare (IM) both within 2 days of admission and again at discharge (from 2 days before discharge up until 4 hours of actual discharge). The IM is a form notice advising beneficiaries of the processes for requesting appeals of discharge decisions, the right to remain in the hospital at least until noon of the day after the QIO expedited review decision without charge if an expedited decision is requested, and the right to receive a detailed notice of the reasons for discharge.
Annual LIS Mailings
The SSA’s annual outreach letters to low-income Medicare beneficiaries were mailed for receipt between May 16 and June 26 of 2007. These letters convey information about the Medicare Savings Programs (MSP) and the Part D low income subsidy (LIS) available for Medicare prescription drug plan costs. Letters went to approximately 4.7 million people. SSA sent separate letters to beneficiaries whose income appears too high for the MSP but not too high for LIS; beneficiaries with income that appears to be less than 135% of the Federal Poverty Level who have LIS but not MSP; beneficiaries with income that appears to qualify them for LIS and MSP but they have neither. SSA plans to mail letters in late November to Medicare beneficiaries who used to get Social Security Disability Insurance (SSDI) and subsequently lost their free Medicare Part A because of work and do not have Medicaid.
Hospital quality of care measures compared on CMS website
CMS is promoting public reporting of hospital performance measures on the Hospital Compare consumer web site. Comparisons include eight measures related to heart attack care, four measures related to heart failure care, seven measures on pneumonia care, and two measures on surgical infection prevention. The process of care measures are updated quarterly. The mortality outcome measures will be updated annually.
Report examines Part D in long-term care settings
A June study and report, Medicare Part D, Nursing Homes, and Long-Term Care Pharmacies by Harvard Medical School staff for the MedPAC, looks at how Part D works in long-term care settings. The reliance on private plans to administer Part D creates conflict between the ability of individuals to select any Part D plan, limitations on a nursing home’s ability to influence this decision, and the obligation of LTC pharmacies to dispense prescribed drugs regardless of plan coverage.
Medicare sends email reminders
CMS now will send beneficiaries who have provided their email address through Mymedicare.gov Step by Step Instructions for Using Mymedicare.gov (English) / Step by Step Instructions for Using Mymedicare.gov (Spanish) an email reminder when they are eligible for one of their preventive services.
CMS has reposted HIPAA Bulletins
These bulletins address various HIPAA-related issues in the following categories: Group Market; Individual Market; and Group & Individual Markets.
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VII. News and Information from HAP
HAP has updated the About Us section of the website tp provide more information about the variety of services HAP provides to SHIPs.
HAP has expanded its Long-Term Care insurance section to include the latest policy proposals, issue briefs and information about the Partnership for Long-Term Care.
Families USA is seeking Part D “donut hole” stories for a potential project. People can contact Aman Gohal directly with stories at agohal@familiesusa.org or 1-800-593-5041 ext 3621.
Families USA has created a new guide to HIPAA protections.
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