Transcript Executive Director’s Report

Medicare Prescription Drug Improvement and
Modernization Act & Beneficiaries With Mental
Illnesses
Presentation to NAMI Convention
June 19, 2005
Andrew Sperling,
Director of Federal Legislative Advocacy, NAMI
[email protected]
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Ongoing NAMI Education & Advocacy
Activities
• Meetings with senior CMS Officials
• Comments on CMS regulations and
formulary guidance, USP Guidelines
• Presentations at NAMI state affiliate
meetings
• Report cards & ratings for PDPs and MA
drug plans
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P.L. 108-170, Signed on December 8, 2003
Key Features
• Voluntary drug benefit administered through drug-only plans or
integrated plans that provide a full set of Medicare benefits
•Unprecedented role for private sector plans to administer an optional
benefit under Medicare on an at-risk basis
•Premium and cost-sharing subsidies for low-income beneficiaries
•Medicare beneficiaries with full Medicaid (dual eligibles) get benefits
through Medicare, not Medicaid, beginning January 1, 2006
•Nearly half of authorized spending under the MMA goes toward dual
eligibles, low-income coverage and subsidies
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Medicare Drug Benefit - Projected 10-Year Cost Fueling
Threats to MMA
•Original Congressional Budget Office (CBO) 10-year
projection - $395 billion (2004 through 2013),
•Most recent 10-year projection from OMB & CMS Actuary
- $724 billion (2006 through 2015),
•Reaction to “escalating” cost projections
•cap drug benefit at $400 billion?
•expand importation?
•repeal non-interference provision in MMA?
•threatened Presidential veto!!
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Dual Eligibles - Who Are They?
•“Full” dual eligibles -- Medicare services as primary payor for
their health care, with Medicaid serving as secondary payor (for
services not covered under Medicare such as Rx and long-term
care. Medicaid also pays their premium and cost sharing for
Medicare (QMB & SLMB)
•“Partial” dual eligibles receive assistance only with Medicare
premium and, in some cases, cost sharing obligations
•To qualify for full Medicaid under the federal minimum
standards, Medicare beneficiaries generally must have income
<74% of poverty (about $6,600 for individuals) and assets <$2,000
(i.e., SSI requirements)
•Elderly and non-elderly people with disabilities above federal
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minimum levels are covered as a state option
Dual Eligibles -- How Many Are There?
•Full Dual Eligibles -- 6.3 million
•Partial Dual Eligibles -- 1 million
•14.1 million elderly <150% of poverty
•Other Medicare Beneficiaries -- 31.9 million
•Total Medicare Beneficiaries -- 38.8 million
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Treatment of Dual Eligibles in P.L. 108-170
•Beginning in November 2005, dual eligibles will be “auto-enrolled” in
Medicare Part D plans. Coverage effective January 1, 2006 when drug
coverage through Medicaid ends.
•Full dual eligibles qualify for low-income subsidy regardless of
income or assets
•No premium if a dual selects average or lower cost plan
•Cost Sharing: no deductible, no co-payment if institutionalized,
indexed copay of $1 per generic/$3 per brand name if <100% of
poverty and $2 per generic/$5 per brand name if >100% of poverty, no
copay above the $2,200 catastrophic limit
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Transition of Dual Eligibles into Part D
•3 separate notices planned from CMS & SSA
•Summer 2005 - notice that new drug coverage is coming in
January 2006
•October 2005 - notice of initial enrollment period once all plan
options become available
•November 15, 2005 - auto-enrollment notice sent to all dual
eligibles that have not yet signed up; opportunity to sign up for a
different plan
•Big concerns about “continuity of care” for dual eligibles -- patients
currently stable on specific medications need to retain coverage when
they shift over the Medicare on January 1, 2006
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Transition of Dual Eligibles into Part D
•CMS will require PDPs and MA plans to put in place a
special transition plan in cases of enrollment in a PDP or MA
plan that excludes an individual dual eligible’s medication
from drug plan’s formulary; exception process available if a
medication is on the formulary but is prior authorized
•Dual eligibles will be able to switch drug plans at any time,
both before and after January 1, 2006 effective date.
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Broad Coverage Expected for
Medications to Treat Mental Illness
•CMS will require drug plans to cover “all or substantially
all” drugs in 6 “vulnerable” classes that include antipsychotics, anti-depressants and anti-convulsants
•CMS guidance states that drug plans should not use prior
authorization or step therapy, unless a plan can
demonstrate “extraordinary circumstances”
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Low-Income Subsidies
•Individuals <135% of poverty and Medicaid eligibility -- up to
about $12,920 for individuals and $17,300 for couples, with assets
under $6,000 for individuals, $9,000 for couples:
- no premium or deductible if average or low-cost plan is selected,
- indexed cost sharing ($2 per generic/$5 per brand name),
- above catastrophic limit, no cost sharing
•Individuals from 135% to 150% of poverty -- up to $14,355 for
individuals and $19,245 for couples, with assets under $10,000 for
individuals, $20,000 four couples:
- sliding scale premium assistance & $50 deductible,
- 15% co-insurance to catastrophic limit, $2 per generic/$5 per
brand name above catastrophic limit
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Low-Income Subsidies
•Apply at Social Security or state Medicaid offices now;
states screen and enroll applicants for Medicaid, if
eligible; but SSA offices will NOT screen for Medicare
Savings Plan eligibility
•Application for low-income subsidy is separate from
drug plan enrollment!!!
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Optional Drug Coverage for
Medicare Beneficiaries Above 150%
Federal Poverty Level (FPL)
•Drug coverage in the new Medicare Part D program is
optional and will require participants to pay a monthly
premium and deductible.
•After $2,250 there will be no benefit until spending hits
$3,600, a.k.a. “the Doughnut Hole.”
•After $3,600 is reached, enrollees pay either 5% coinsurance or $2 generics/ $5 brand name – whichever is
greater.
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•Penalties for late enrollment with “creditable coverage.”
True Out of Pocket Costs
•TrOOP establishes the rules by which a plan enrollee can meet the
requirement of spending $3,600 of out-of-pocket costs, and thereby
access significantly lower their co-payments.
•Assistance from most charitable programs and certain state
assistance programs (including programs offered by drug
manufacturers) will be included in the calculation of TrOOP.
•Final rules maintain CMS’s position that payments for a drug not
on a plan’s formulary will NOT count towards TrOOP.
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Overarching Concerns in the Final MMA Regulations
• ensuring that drug plans (PDPs) that will offer coverage to
Medicare beneficiaries are required to offer broad access to
medications to treat mental illness,
 limiting the ability of Medicare PDPs to impose restrictive
policies such as prior authorization, “fail first” requirements,
tiered co-payments and preferred drug lists,
limiting impact of involuntary disenrollment provision,
 promoting a strong set of appeal and grievance rights for
beneficiaries and their families, and
 ensuring that individuals dually eligible for Medicare and
Medicaid are able to make a smooth transition into the new
Medicare drug benefit in January 2006.
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Specific Concerns with the Final MMA Regulations
Plan Formularies – In the final rules, CMS declined to
require an open alternative formulary for Part D enrollees
with severe mental illnesses. Minimum requirement for at
least two drugs in each therapeutic class retained, however, if
there are only 2 distinct drugs in a particular class, the plan
could elect to cover only one. CMS will not require plans to
cover off-label uses of FDA approved drugs and can require
documentation. Advance notice period for mid-year changes
to a plan’s formulary extended from 30 days to 60 days.
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Exceptions, Grievances & Appeals
•Final regulations state that determinations must be as
expeditious as the enrollee’s health requires.
•Expedited appeals must be resolved within 24 hours and
expedited re-determinations within 72 hours.
•For standard coverage determinations (i.e., requesting an
exception to access a non-formulary drug) a decision must
come within 72 hours.
•An outside independent review can be requested, with a
decision required within 7 days. The final rule also clarifies
that a prior authorization denial is subject to appeal.
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Exceptions, Grievances & Appeals
•Final regulations prevent a denial at the pharmacy counter
and instead an enrollee will have to request the denial in
writing from the plan -- a requirement likely to discourage
many enrollees from pursuing appeals.
•Independent review entities will not be able to examine the
validity of the exceptions criteria used by each plan, and will
only be able scrutinize the application of that criteria.
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Links to More Information
http://www.cms.hhs.gov/medicarereform/pdbma/
www.nami.org
www.aimcoalition.org/
www.kff.org/medicare/rxdrugdebate.cfm
More information about prescription drug savings for
Medicare beneficiaries is available at:
http://www.accesstobenefits.org/
http://www.pparx.org
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