federal medicare prescription drug coverage sam shore center for policy and innovation dshs

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Federal Medicare Prescription Drug Coverage Sam Shore Center for Policy and Innovation DSHS

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Page 1: Federal Medicare Prescription Drug Coverage Sam Shore Center for Policy and Innovation DSHS

Federal Medicare Prescription Drug Coverage

Sam Shore

Center for Policy and Innovation

DSHS

Page 2: Federal Medicare Prescription Drug Coverage Sam Shore Center for Policy and Innovation DSHS

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Medicare Prescription Drug Program: “New Medicare Part D”

• New Medicare drug benefit starts January 2006

• New “Part D” offers optional drug coverage to all Medicare beneficiaries

• Rx coverage provided through private drug plans or Medicare HMOs (Medicare Advantage)

• Limited to private plan’s formulary • Changes Medicaid coverage for Medicare

beneficiaries with Medicaid Rx coverage

Page 3: Federal Medicare Prescription Drug Coverage Sam Shore Center for Policy and Innovation DSHS

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Medicare Prescription Drug Program

Medicaid Changes effective January 1, 2006

• Rx coverage for dual eligibles will be turned off 1/1/06

• CMS will facilitate enrollment of dual eligibles into Part D plans.

• States make monthly payment to CMS

• New law prohibits states from drawing federal funds for drugs for dual eligibles

Page 4: Federal Medicare Prescription Drug Coverage Sam Shore Center for Policy and Innovation DSHS

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Medicare Prescription Drug Program: Dual Eligibility

• Dual Eligibility refers to individuals who are:Medicare eligible (aged or disabled);Low income; andAlso eligible for some level of Medicaid coverage

There are different types of dual eligibility, but generally, they fall into two categories:Full dual eligiblesOther dual eligibles

Page 5: Federal Medicare Prescription Drug Coverage Sam Shore Center for Policy and Innovation DSHS

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Medicare Prescription Drug Program: Dual Eligibility

• Full Dual Eligibles: Entitled to Medicaid benefits that Medicare does not cover, including

Medicaid drug coverage Include low-income aged and disabled individuals in community,

waiver programs, nursing homes, and state schools

• Other Dual Eligibles: Eligible only for Medicaid payments for Medicare premiums,

deductibles, and coinsurance for Medicare services Not entitled to Medicaid prescription drugs services (1929b) Include several categories of eligibility; incomes generally up to

135% of federal poverty level (if not in institution)

Page 6: Federal Medicare Prescription Drug Coverage Sam Shore Center for Policy and Innovation DSHS

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How Many Medicaid clients are affected? (as of 2/1/05)

456

8

28

492

46,520

118,254

165,266

In nursing facilities

In state schools

In community-based ICFs/MR

Total in institutions

1929B clients

Other clients (QMB,SLMB,QI-1)

Total non-full duals

Non-Full Dual Eligible Clients:

57,650

3,450

4,053

65,153

251,333

316,486

In nursing facilities

In State Schools

In community based ICFs/MR

Total in institutions

Total in the community

Total full dual eligibles

Full Dual eligible clients:

Page 7: Federal Medicare Prescription Drug Coverage Sam Shore Center for Policy and Innovation DSHS

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How Does Part D Coverage Work?

• Standard Benefit (All Medicare Beneficiaries)• Beneficiaries pay monthly premiums (estimated at $35 in 2006)• Based on annual amount of drug costs, beneficiaries may pay a

significant portion: Deductible (first $250 of drug costs)25% of drug costs between $250 and $2250100% of drug costs between $2250 and $5100 (no

Medicare coverage = “gap”); premiums continueCopayments or 5% of drug costs after $5100;* Medicare

pays 95% *At $5100 of drug costs, beneficiary has paid $3600 in out-of-pocket spending, not including

premiums

Page 8: Federal Medicare Prescription Drug Coverage Sam Shore Center for Policy and Innovation DSHS

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Medicare Prescription Drug Program:Part D-Beneficiary Cost Sharing Example

Standard Benefit – Individual with $500 per month ($6000 annually) Total Out of Pocket = $3645 (61%);Does not include premiums

$0$50

$100$150$200$250$300$350$400$450$500

Jan

Feb

March

Ap

ril

May

Jun

e

July

Au

g

Sep

t

Oct

No

v

De

c

Monthly out-of-pocket spending

Page 9: Federal Medicare Prescription Drug Coverage Sam Shore Center for Policy and Innovation DSHS

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Medicare Prescription Drug Program: Part D Low-Income Subsidies

• Subsidies eliminate or lower premium, out-of-pocket cost sharing for low income beneficiaries

• Based on Income and Asset Test• Premium subsidies–

No premiums or deductibles for all dual eligible Medicaid clients and some low income, Medicare beneficiaries

Sliding scale subsidies for other low income beneficiaries

• Cost sharing subsidies- No gap in coverage for all dual eligible Medicaid clients and

some low income Medicare-only individuals Copays from $1 to $5 for all dual eligibles and some low income

Medicare-only individuals

Page 10: Federal Medicare Prescription Drug Coverage Sam Shore Center for Policy and Innovation DSHS

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Formulary Guidance

• 6 Drug Classes of special interest

• Anticonvulsants

• Antipsychotics

• Antidepressants

• Chemotherapy

• HIV/AIDS Drugs

• Immunosuppressants

Page 11: Federal Medicare Prescription Drug Coverage Sam Shore Center for Policy and Innovation DSHS

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Low-Income Subsidy Groups

No copay after total drug expenses reach $5,100 in 2006.

$2 generic and $5 brand

•$2-$5 cost sharing (generic/brand)

• 15% of the cost of the covered drug

-no premium

-no deductible

-sliding premium

-$50 deductible

New low-income subsidy groups:

• Up to 135% FPL

•135% to 150% FPL

No cost sharing

No cost sharingNo premium

No deductible

All dual eligible clients in institutions

No copay after total drug expenses reach $5,100 in 2006

•Less than 100% FPL,

$1-$3 (generic/brand)•Over 100% FPL,

$3-$5 (generic/brand)

No premium

No deductible

Full and Non-Full Duals

Catastrophic coverage

Cost SharingPremium &

DeductiblePopulation

Page 12: Federal Medicare Prescription Drug Coverage Sam Shore Center for Policy and Innovation DSHS

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Outreach Campaign

• Multi-phased message platform

– Awareness (January–June 2005)• Let all affected parties know Part D is coming

– Decision (July–December 2005)• Activate beneficiary decision-making

– Urgency (January–June 2006)• Target Beneficiaries that have not yet enrolled in order

to avoid increased premiums and lack of coverage

Page 13: Federal Medicare Prescription Drug Coverage Sam Shore Center for Policy and Innovation DSHS

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HHSC Communications Strategy

• Beneficiaries most likely source of info on Medicare Part D: (source: Kaiser Family Foundation Focus Groups) – Medicare– Pharmacists– Physicians

• HHSC also knows (for dual eligibles): – who they are– where they live– Most go to the pharmacy to get their prescriptions filled

Page 14: Federal Medicare Prescription Drug Coverage Sam Shore Center for Policy and Innovation DSHS

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HHSC Communications Plan: Target Audiences

• Clients– Full Dual Eligibles– Non-Full duals– Medicare-only clients in state-funded Rx programs

(Kidney Health, New Generation mental health medications, HIV/AIDS)

• Providers– Pharmacists– Physicians– Institutional providers (Nursing homes, ICF/MRs)

• Staff– Caseworkers and other front-line staff in all HHS agencies

Page 15: Federal Medicare Prescription Drug Coverage Sam Shore Center for Policy and Innovation DSHS

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HHSC Communications StrategyMaterials and Activities

Provider-Directed Activities• Education

– Articles for newsletters– Briefings for members– Training materials

• Materials (based on available funding)– High interest direct mail– Push cards– Brochures

17

Page 16: Federal Medicare Prescription Drug Coverage Sam Shore Center for Policy and Innovation DSHS

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Medicare Part D: Key Dates in the Implementation Timeline

• July 1, 2005 States begin accepting applications for LIS• September 2005: CMS awards bids to PDPs and MA-PDs• October 2005: CMS to notify full dual eligibles and States of Part D

plan assignment. • October 15, 2005: CMS to disseminate information comparing

Part D plans via mail and 1-800-Medicare

• November 15, 2005 Enrollment period for Part D plan selection opens (runs through May 15, 2006 in first year

only).• December 31, 2005: Medicaid prescription drug coverage for dual

eligibles ends.• January 1, 2006: Medicare Part D drug coverage program begins• May 15, 2006 Open Enrollment ends• June 1, 2006 Facilitated enrollment of LIS beneficiaries 18

Page 17: Federal Medicare Prescription Drug Coverage Sam Shore Center for Policy and Innovation DSHS

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Policy Implications for DSHS Programs

• Programs that serve people who are Medicare Part D eligible must make sure that their rules:– require clients to enroll in Medicare Part D

– deny state benefits for Rx where Medicare Part D will cover

– allow supplementation with state dollars in certain situations

Page 18: Federal Medicare Prescription Drug Coverage Sam Shore Center for Policy and Innovation DSHS

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Medicare Part D-will impact approximately 40,000 persons served in DSHS Programs

• HIV– Approximately 1,000

• CSHCN– Approximately 30

• Mental Health Services– Approximately 18,000

• Primary Health Care– Approximately 6,000

• Kidney Health– Approximately 15,000

Page 19: Federal Medicare Prescription Drug Coverage Sam Shore Center for Policy and Innovation DSHS

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Texas HIV Medication Program

• Provides life sustaining medications to treat HIV disease and it's associated opportunistic infections for low income Texans.

• Program eligibility criteria:– HIV positive– Texas resident– Gross income < 200% of the federal poverty level– Uninsured or underinsured for prescription

medications

• 13,107 clients enrolled in FY04• Approximately 8%(1,049) have Medicare

Page 20: Federal Medicare Prescription Drug Coverage Sam Shore Center for Policy and Innovation DSHS

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Children with Special Health Care Needs Services Program

• CSHCN provided medical services to 1,909 clients in FYO4 – Texas residents under 21 with a chronic physical

or developmental condition, or who are adults with cystic fibrosis

– Family income at or below 200% federal poverty • Specific services:

– Medical, dental, and case management services– Some wrap-around services for persons with other

health coverage– Enabling services, family support services, and

systems development

Page 21: Federal Medicare Prescription Drug Coverage Sam Shore Center for Policy and Innovation DSHS

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Community Mental Health Services

• Provides Community-Based Mental Health services including Medications

• Primarily serves adults with Schizophrenia, Bipolar Disorder and Major Depression and Children and Adolescents with Serious Emotional Disorders

• Serves approximately 150,000 adults and 30,000 C&A each year

Page 22: Federal Medicare Prescription Drug Coverage Sam Shore Center for Policy and Innovation DSHS

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Kidney Health Care• Kidney Health Care served over 18,400

recipients in FY04 – Texas residents with end-stage renal disease

(ESRD) diagnosis, not Medicaid eligible, gross income less than $60,000 annually

– Patients are of all ages and ethnic groups

• Specific Services:– Four drugs a month (34-day supply); $6 co-pay

per drug; – Travel reimbursement up to 13 round trips monthly– Allowable dialysis and access surgery services

Page 23: Federal Medicare Prescription Drug Coverage Sam Shore Center for Policy and Innovation DSHS

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Primary Health Care

• Provides primary and preventive health services to individuals at or below 150% FPL who do not have access to services through other programs or funding sources.

• Services are provided by public and private non-profit agencies through a competitive RFP process.

• Priority services include: diagnosis and treatment, emergency services, family planning, preventive services such as immunizations and prenatal care, laboratory and x-ray and health education.

• Approximately 82,600 clients were served by 56 contractors in FY04.