Mental Health Part D News Alert

December 15, 2005

Below are some recent questions and answers that the National Mental Health Association (NMHA) has created based on conference calls with the Centers for Medicare and Medicaid Services (CMS).  They offer clarification on several important issues surrounding Medicare Part D, including co-pays, long-term care, and the online Plan and Formulary Finders.  

What happens if an individual needs to access medications when they are out of their region?

CMS is aware that there are instances in which a beneficiary may need to access drugs at an out-of-network pharmacy. Plans are required to assure that their enrollees have adequate access to drugs dispensed at out-of-network pharmacies when they cannot reasonably be expected to obtain covered Part D drugs at a network pharmacy. Provided that such access to out-of-network pharmacies is not routine, we expect that plans would guarantee out-of-network access to beneficiaries when, for example they are: (1) traveling outside their plan’s service area and run out of or lose their covered Part D drugs or become ill and need a covered Part D drug, and cannot access a network pharmacy; (2) not able to obtain a covered Part D drug in a timely manner within their service area because, for example, there is no network pharmacy within a reasonable driving distance that provides 24/7 service; (3) filling a prescription for a covered Part D drug and that particular drug (for example, an orphan drug or other specialty pharmaceutical) is not regularly stocked at accessible network retail or mail-order pharmacies); (4) administered a vaccine covered by Part D in a physician’s office; and (5) provided covered Part D drugs dispensed by an out-of-network institution-based pharmacy while in an emergency department, provider-based clinic, outpatient surgery, or other outpatient setting. We will closely monitor out-of-network access to ensure that plans are adequately meeting enrollees’ out-of-network access needs.

Plans will have some flexibility to establish reasonable rules to assure that enrollees use out-of-network pharmacies appropriately. When an enrollee purchases a drug at an out-of-network pharmacy under these circumstances, he or she will pay the same cost-sharing as would have applied at a network pharmacy, plus the difference between the out-of-network pharmacy’s price and the network pharmacy price for that drug.

Can Community Mental Health Centers pay co-pay or premiums? What are the regulations around this practice?

Community Mental Health Centers should be able to help pay for co-payments, deductibles and premiums.  However, Medicaid cannot pay for these wraparound payments and these payments would probably not count towards an individual's True Out of Pocket Costs (TROOP).

Here is the CMS response to questions about what organizations can pay for out of pocket costs:

Out-of-pocket spending consists of costs related to the $250 deductible, the 25 percent beneficiary co-insurance (or equivalent co-pays) up to the initial coverage limit, 100 percent co-insurance during the coverage gap, and the roughly 5 percent co-insurance paid in the catastrophic coverage. By law, only cost-sharing paid by certain sources counts toward the drug benefit’s out-of-pocket limit, which defines the start of the catastrophic coverage. These sources include:

• The enrollee (or another person on behalf of the enrollee)
• CMS (on behalf of a low-income enrollee who qualifies for low-income subsidies), and
• A State Pharmaceutical Assistance Program (SPAP)

In the final rule, we define “person” (first bullet, above) in the legal sense of the word, to include unrelated corporations, so charities that are not connected to insurers or the beneficiary’s employer could have a role in helping beneficiaries with their out-of-pocket costs. Therefore, our broad definition of the term “person” captures not only “bona fide” charities, but other charitable organizations as well. Thus, even if a charity is not a bona fide charity for purposes of Federal fraud and abuse law, any drug payments it makes on behalf of Part D enrollees would count toward True out-of-pocket costs (TrOOP) unless otherwise excluded as payments by a group health plan, insurance or otherwise, or similar third party payment arrangement. Charities that are established, maintained, or otherwise controlled by an employer or union will likely fall under our definition of “group health plan” and will therefore be excluded from TrOOP on this basis.

The rule also outlines specific insurance and government programs that will not count toward the out-of-pocket limit. These include cost-sharing obligations subsidized in whole or in part by employers, other insurers, and government programs (for example, the Indian Health Service (IHS), Department of Veterans Affairs (VA), Department of Labor Federal Workers’ Compensation Program, Federally Qualified Health Centers (FQHCs); Medicaid; the State Children’s Health Insurance Program (SCHIP); black lung benefits; Ryan White CARE Act funds; and State special funds that assist certain individuals with their medical costs). Congress chose to distinguish between payers of out-of-pocket costs in order to encourage current employers, other insurers, and government programs to continue offering prescription drug coverage when the Medicare drug benefit begins.

For individuals caring for elderly parents or other dependents (other than spouse or children), do the federal poverty levels change? How are dependents defined?

The poverty level guidelines change by the number of people in your household, including dependents such as spouse, children, and elderly parents.  Here are the 2005 federal poverty income levels:

2005 HHS Poverty Guidelines

SOURCE:  Federal Register, Vol. 70, No. 33, February 18, 2005, pp. 8373-8375.

For the Medicare prescription drug benefit, you will qualify for extra help at 150% of the federal poverty level and for additional help at 135% of the federal poverty level.  Do remember that the Medicare prescription drug benefit also has an asset test, which significantly limits the number of people who can qualify for extra help.

 

Claiming a Dependent

You may claim a personal exemption for yourself and for your dependents, and this will impact the number of people in your household for purposes of calculating whether you qualify for extra help under the Medicare prescription drug benefit. You are entitled to claim a person as a dependent, if that person:

1. is your relative (if he/she is your immediate relative, he/she does not have to live with you),
2. earns less than $3,100 (or is a full-time student and under age 24),
3. receives over half of his or her support from you,
4. is a citizen or resident alien of the United States, Canada, or Mexico, and
5. does not file a joint return with his or her spouse.

For more detailed information, go to: http://taxes.about.com/od/taxglossary/a/Dependents.htm#

When discharged from a long-term care facility, what is the lag-time before coverage begins?

Individuals in long term care facilities will be enrolled in the Medicare Prescription Drug Benefit.  Institutionalized, full-benefit dual eligible individuals pay no cost-sharing whatsoever for drugs covered under their Part D plan. In other words, full-benefit dual eligible individuals in nursing homes will have no cost sharing at all and can retain their limited personal needs allowances for their personal expenses and will not have to spend the allowance on drug costs.

Other low-income subsidy institutionalized individuals will receive cost sharing subsidies based upon their level of income and resources. Part D institutionalized individuals who do not qualify for the low-income subsidy who were paying for drugs using private sources will now benefit from the Part D prescription drug benefits including catastrophic coverage for drug expenditures in excess of $5,100.

Therefore, there should be no lag time before coverage begins upon discharge as the individual should be able to stay on their existing program unless they leave the region.  Cost-sharing requirements would increase upon release.

However, Medicaid cannot reimburse states for services in Institutions for Mental Disease (IMDs) or psychiatric hospitals individuals between the ages of 22 and 64.  Therefore, such individuals will no longer be enrolled in the Part D program if they remain in an IMD for more than one month.  Individuals may re-enroll in the Medicare Prescription Drug program upon release, and the benefit will start the month following enrollment.  If an individual needs to re-apply for extra help, social security benefits, or Medicaid services, the application for the financial subsidy may also be delayed.  The CMS guidance regarding Long Term Care Facilities and IMDs is attached. 

 

Does an individual’s premium payment, if paid out-of-pocket, count toward the TrOOP calculation for catastrophic coverage? No, only out of pocket payments for the cost of medications count.

Are Medically Needy individuals counted as full-benefit duals? If an individual has met a state’s criteria for Medicaid in any month between March and the end of 2005, they are deemed eligible for the full 2006 benefit year for Part D.  In August, 2006, CMS will compare state data from 2005 with state data for Medicaid eligibility in 2006 to determine both the spend down eligibles (Medically Needy) and those qualified for the MSP (partial duals) to determine eligibility for Part D in 2007.

Do individuals who have applied for Extra Help need to wait for a letter telling them if they qualify for the subsidy before enrolling in a plan? CMS said on a conference call with SHIPs that individuals should NOT wait to enroll. If they are determined eligible for the subsidy after their plan coverage starts, the Plan will reimburse them for any expenses made out of pocket (CMS will notify plans of those awarded the Extra Help). Keep in mind that this does not affect duals, who are automatically eligible for the Extra Help and do not need to apply.

Can an individual switch plans if they enroll before January 1? Yes. Duals can switch plans even though they receive letters indicating a plan into which they are being auto enrolled. And, those individuals can change up to once per month throughout the plan year.  All other eligible beneficiaries may enroll in a plan and change that enrollment one time before May 15, 2006. After that time, those individuals will only be able to switch plans during the open enrollment period (November 15-December 31 each year) or in special circumstances, such as moving to another region, the plan stops offering benefits etc.

Are the Plan Finder and Formulary Finder fully functional? According to CMS, yes, and all information is accurate to what was provided to them by the plans. On November 7, detailed pricing data was added to the site, allowing users to compare drug costs and calculate total costs for the individual based on their medications. On November 14, the online enrollment center and a Spanish-language version of the Plan Finder tool were added to the site.  There are still some issues: slow site, links not functioning, but generally it’s working.  Some tips/new features:

• The online enrollment tool can assist in enrolling individuals in all plans except the 54 that chose not to participate in that option (waiting for clarification from CMS). Users can access the online enrollment form by clicking on an Enroll in a Plan button in five locations:
• On the Plan Finder homepage
• After searching the Plan Finder, each Plan detail page has a link to enroll
• On the Personalized search page
• On the detailed cost comparison page
• On the Medicare.gov personal plan finder page (for general Medicare plans)
• When doing a search based on medications, the tool will identify plans which cover the search medications and the user can click on the medication to get further detail about whether prior authorization, step therapy or quantity limits apply, and what copayment tier the medication is in. An ** in that box indicates a non-formulary medication.
• In late November, duals will be able to enter their personal information and automatically be able to compare the plan to which they’ve been autoenrolled to other plan options in their region.
• When conducting a personalized search for an individual, CMS admitted that dual eligibles are not differentiated from individuals eligible for the Extra Help, so the default information on copayments will show $2-5, rather than the $1-3 that will be applicable to most full benefit duals.
• The Plan Finder/Formulary Finder tool will only identify network pharmacies within a 50 mile radius of the individual. In rural states, this may (and is) limiting the choice of plans in some cases.
• When entering medications to conduct a personalized search, users are not able to enter the same medication in two different dosages (e.g., if an individual is on the same medication but different dosages in the morning and evening – and thus two separate prescriptions). CMS is aware and I await a response on how to get around that…
• Some plans are offering no copays – principally for generic medications only.

 

How are Special Needs Plans (SNPs) enrolling people? SNPs are able to limit their marketing and enrollment in Part D to one of three categories of beneficiaries: dual eligibles, institutionalized individuals, and those with long-term disability or chronic health conditions. SNPs with Medicaid managed care contracts are permitted by CMS to conduct passive enrollment of duals for coverage that begins January 1.  43 plans in 13 states (AZ, CA, CO, FL, KY, MN, NJ, OR, PA, TN, TX, UT, and WA) have been approved to do this.  CMS criteria for the SNPs to conduct passive enrollment includes: existing contract as a Medicaid managed care provider, very similar provider network, identical pharmacy benefits manager, notice to beneficiaries of the ability to opt-out of the SNP, and no premium charged for Medicare Part A, B or D.  Affected individuals should already have received a letter from their Medicaid managed care plan notifying them of this passive enrollment and allowing them to opt-out by the end of October. Those who opted out will also have a confirmation letter. Duals CAN switch out of these plans but will need to select and enroll into a different plan before January 1. 

NMHA is aware that there is strong concern about the global benefit package for these SNPs; please call if you have further questions or specific detail in your state that would add to the body of knowledge about this issue.