Medicare Modernization Act of 2003

1. Medicare Modernization Act of 2003 Eric G Handler M.D., M.P.H., FAAP Chief Medical Officer Boston Regional Office Centers for Medicare & Medicaid Services 617-565-1319 Eric.Handler@cms.hhs.gov

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

12. 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

13. 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

14. 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

15. 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 Medicare • Advantage prescription drug (MA-PD) plan • may not cover all drugs • Brand name and generic drugs will be in • each formulary

16. 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

17. 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

18. Excluded Drug Coverage by State Medicaid Programs

19. 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

20. 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

21. Transition ProcessPrescription 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.

22. Enrollees Exception RequestsPrescription Drug Benefit • 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

23. 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

24. 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

25. Timeframe for Coverage Determinations for Plans Enrollee or physician requests exception Request normal review Request expedited review Expedited review rejected 72hr 24hr Decision in 72 hrs In 24 hrs Decision Request granted: receive coverage Request denied Request granted: receive coverage Request denied Redetermination 7 days std 72 hrs exp Request denied Request granted: receive coverage Appeal leaves plan

26. Timeframe for Coverage Determinationsbeyond the plan Independent Review Entity (IRE) Request denied Request granted: receive coverage 72 hrs Administrative Law Judge (ALJ) Request granted: receive coverage Request denied Medicare Appeals Committee (MAC) Judicial Review

27. 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

28. 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.

29. 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 counseling and assistance to people with Medicare and their families. Through federal grants directed to states, SHIPs provide free counseling and assistance via telephone and face-to face interactive sessions, public education presentations and programs, and media activities. Web Site: www.shiptalk.org

30. Serving Health Information Needs of Elders SHINE Toll Free: (800) 243-4636 www.shiptalk.org

31. More Information for Health Care Professionals • Toolkit and training materials for healthcare professionalshttp://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

32. Health Care ProfessionalsCME PowerPoint

33. 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

37. National Prescription Drug Benefit

38. Mass. Stand-Alone OrganizationPrescription Drug Benefit(3 with premiums<$20)

39. Mass. Medicare Advantage PD PlansPrescription Drug Benefit

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

41. Landscape of Local Plans

42. Important Dates • 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