Legal issues for Medicaid Plans Under Part D in Serving Dual Eligibles

1
Legal issues for Medicaid Plans Under Part D in
Serving Dual Eligibles

• MEDICAID HEALTH PLANS OF AMERICAMedicare Part D
  The First 100 Days, Washington, DC
• April 19, 2006

2
Dual Eligibles

• 7.5 million low-income seniors and people with
  disabilities who are enrolled in both Medicare
  and Medicaid
• Dual eligibles rely on Medicaid to pay Medicare
  premiums and cost-sharing and to cover benefits
  not covered by Medicare
• As of January 1, 2006, prescription drug coverage
  for dual eligibles has shifted from Medicaid to
  Medicare Part D.

3
Transitioning to Medicare Drug Coverage

• Over 6 million dual eligibles were randomly
  assigned to Part D plans offering coverage below
  the benchmark premium.
• Medicare fully subsidizes the Part D premium
• Medicare subsidizes Part D co-payments so that
  co-payment amounts do not exceed 1 or 3 for
  generics and 2 or 5 for brand name drugs

4
Transition Issues

• Beneficiaries charged incorrect cost-sharing
  amounts
• Pharmacies lacked billing information to bill
  Part D plans
• Beneficiaries not aware they were assigned to a
  Part D plan
• Beneficiary having difficulty contacting plans
  for help

5
Delivery Combinations for Dual Eligibles after
January 1, 2006

• Medicaid
• Fee-for-Service
• Fee-for-Service
• Managed Care
• Managed Care Plan X
• Managed Care Plan Z

• Medicare
• Fee-for Service PDP
• Managed Care Plan (MA-PD)
• Fee-for-Service PDP
• Managed Care Plan X (MA-PD)
• Managed Care Plan Y (MA-PD)

6
Coordination between Part D and Medicaid

• Claims data on Part D drugs may no longer be
  available to Medicaid plan
• No ability to assure appropriate drug utilization
• PDPs are not at risk for hospitalization and has
  no incentive to cover / manage medications
• PDP must provide Medication Therapy Management
  (MTM) for targeted beneficiaries.

7
What if dual- eligible is not enrolled in a Part
D plan?

• State prohibited from drawing federal Medicaid
  funds (FFP) for Medicare drugs for dual-eligibles
  even if not enrolled in a Medicare plan.
• State Medicaid capitation payment will not
  include costs for Part D drugs for
  dual-eligibles.

8
Part D Stop Gap Coverage

• In light of transition issues, a number of states
  agreed to reimburse pharmacy providers for the
  cost of prescriptions for who were not able to
  receive drugs.
• Typically limited benefit, e.g., one claim for
  30-day supply
• Some limited to All Medicare beneficiaries vs.
  LIS-eligible beneficiaries
• CMS announced that it will reimburse states for
  Part D drug costs provided through March 8, 2006
  within four weeks of receipt of clean claims.
• Demonstration authority under section 402 of the
  Social Security Amendments of 1967, as amended.
• Includes dual-eligibles and low-income subsidy
  (LIS) entitled individuals
• Includes reimbursement for Part D drugs as well
  as certain administrative costs

9
Myth Medicare Pays for All Drugs for Dual
Eligibles

• Fact Medicaid continues to pay cost-sharing for
  Medicare Part B covered drugs.
• Fact Medicaid will continue to pay for a few
  categories of drugs not covered by Medicare (to
  the extent drugs are covered under state Medicaid
  program)
• Nonprescription drugs (OTC meds)
• Barbiturates
• Benzodiazepines
• Drugs for anorexia, weight loss, and weight gain.
• Fact Medicaid cannot pay for a drug whose class
  is covered by Medicare but not included a
  particular Part D plans formulary.

10
Processing Drug Claims for Dual Eligibles

• Claims for Part D drugs should be rejected
• (Rejected to bill Part D plan)
• Claims for non-Part D drugs covered by Medicaid
  should be either
• Paid (if costs included in capitation payment) or
• Submitted to State FFS

11
Options for payment of Part D Co-Pays for dual
eligibles

• State wrap-around (no FFP)
• State Pharmaceutical Assistance Program (SPAP)
• Medicaid HMO wrap-around (self-funded)
• Pharmacy waivers

12
Waiver of Part D Co-Payments

• Under new anti-kickback safe harbor established
  by the MMA, pharmacies may waive applicable
  co-payment
• For dual-eligibles, pharmacy may routinely waive
  or reduce cost-sharing as long as done in an
  unadvertised manner
• For non-dual eligibles, pharmacy may waive or
  reduce cost-sharing on a non-routine basis after
  determining that a beneficiary is in financial
  need or after failing to collect the cost-sharing
  portion, provided it is also done in an
  unadvertised manner

13
TrOOP

• Medicare excluded drugs do not count towards
  TrOOP
• Non-formulary drugs do not count towards TrOOP
• Payments made on behalf of recipients by another
  federal program (e.g., Medicaid) do not count
  towards TrOOP.

14
Adam J. Falk, Esq.Feldesman Tucker Leifer Fidell
LLP(202) 466-8960afalk_at_ftlf.com