october 1, 2010 leslie fried, aba commission on law & aging health care reform & medicare:...

October 1, 2010 Leslie Fried, ABA Commission on Law & Aging

Health Care Health Care Reform & Reform &

Medicare: The Medicare: The Basics (and a little Basics (and a little

more)more)Leslie Fried, Esq.Leslie Fried, Esq.

ABA Commission on Law & ABA Commission on Law & AgingAging


Brief Legislative History of Patient Brief Legislative History of Patient Protection & Affordable Care Act of Protection & Affordable Care Act of

20102010 Over a year of various proposals and debateOver a year of various proposals and debate Senate passed it on December 24, 2009Senate passed it on December 24, 2009 House passed Senate version 3/21/10House passed Senate version 3/21/10 President signed into law, 3/23/10President signed into law, 3/23/10 House passed Reconciliation bill and sent to House passed Reconciliation bill and sent to

Senate on 3/21/10Senate on 3/21/10 Senate made a couple of changes, sent Senate made a couple of changes, sent

back to House, which passed it again on back to House, which passed it again on 3/25/103/25/10

President signed the reconciliation into law President signed the reconciliation into law 3/30/103/30/10


2010 & 2011: Medicare 2010 & 2011: Medicare OverviewOverview

Part D: Rebate (2010) and beginning Part D: Rebate (2010) and beginning gradual closure of the coverage gap (2011)gradual closure of the coverage gap (2011)

Annual wellness visit and personalized Annual wellness visit and personalized prevention assessment plan; eliminate cost prevention assessment plan; eliminate cost sharing on some preventive services (2011)sharing on some preventive services (2011)

Restructure payments to Medicare Restructure payments to Medicare Advantage (MA) plans (2011)Advantage (MA) plans (2011)

Reduce market basket updates to Reduce market basket updates to institutional providers, including nursing institutional providers, including nursing facilities (2010)facilities (2010)

Establish new Center for Innovation (2011)Establish new Center for Innovation (2011)


Part D: Phased in subsidies of the Part D: Phased in subsidies of the coverage gapcoverage gap

Phased in subsidies in the coverage gapPhased in subsidies in the coverage gap

2010 only - $250 rebate 2010 only - $250 rebate

2011-2020 - phased in subsidies2011-2020 - phased in subsidies

Generic drugs: government subsidy 7% in 2011 Generic drugs: government subsidy 7% in 2011 increases to 75% by 2020.increases to 75% by 2020.

Brand drugs: Brand drugs:

50 percent discount from pharmaceutical 50 percent discount from pharmaceutical manufacturers beginning 2011.manufacturers beginning 2011.

2013-2020 - government subsidy of 2.5% in 2013 2013-2020 - government subsidy of 2.5% in 2013 increases to 25% by 2020increases to 25% by 2020


$250 Rebate Check$250 Rebate Check

Who is eligible? Beneficiaries who are:Who is eligible? Beneficiaries who are: Enrolled in a Part D drug planEnrolled in a Part D drug plan Enters the coverage gap in 2010Enters the coverage gap in 2010 Not receiving LIS or Medicaid benefitsNot receiving LIS or Medicaid benefits

Beneficiaries do not have to do anything to Beneficiaries do not have to do anything to get the check. get the check.

Lag time of 45 days to 4 months; Lag time of 45 days to 4 months; Paper Paper checkschecks mailed to address on file with the mailed to address on file with the SSA SSA

SOURCE: Kaiser Family Foundation illustration of standard Medicare drug benefit for 2020 under the Patient Protection and Affordable Care Act (P.L. 111-148), as amended by the Health Care and Education Reconciliation Act of 2010.

75% paid by

plan

15% paid by plan; 80% paid by Medicare5% paid by enrollee

Brands: 50% discount

25% paid by plan

Generics: 75% paid by plan

25% paid by enrollee


Initial coverage limit

Catastrophic coverage

Medicare’s “Standard” Drug Benefit in Medicare’s “Standard” Drug Benefit in 20202020


Deductible

Cost Sharing for Cost Sharing for Brand-NameBrand-Name Drugs in the Drugs in the Medicare Part D Coverage Gap, 2010-2020Medicare Part D Coverage Gap, 2010-2020

minus $250

rebate

SOURCE: Kaiser Family Foundation analysis of the standard Medicare drug benefit under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010.

Cost Sharing for Cost Sharing for GenericGeneric Drugs in the Drugs in the Medicare Part D Coverage Gap, 2010-2020Medicare Part D Coverage Gap, 2010-2020

SOURCE: Kaiser Family Foundation analysis of the standard Medicare drug benefit under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010.


The WeedsThe Weeds

Definition of covered Part D drug will Definition of covered Part D drug will change:change: All Part D drugs must be covered by a All Part D drugs must be covered by a

manufacturer discount agreement with manufacturer discount agreement with SecretarySecretary

Agreement applies to all manufacturers Agreement applies to all manufacturers for all its drugs for all its drugs

Exceptions Exceptions (CMS hopes not to apply this authority)(CMS hopes not to apply this authority) Essential to the health of Part D enrolleesEssential to the health of Part D enrollees Extenuating circumstances for 2011 Extenuating circumstances for 2011


More WeedsMore Weeds Covered in the “discount” – negotiated Covered in the “discount” – negotiated

price of the drugs, including sales tax and price of the drugs, including sales tax and vaccine administration. vaccine administration. Not the dispensing fee except for straddle Not the dispensing fee except for straddle

claimsclaims Discount will be provided at the pharmacy Discount will be provided at the pharmacy

counter (Point of Service)counter (Point of Service) Manufacturers will make discount Manufacturers will make discount

payments directly to plans within 14 days payments directly to plans within 14 days of invoice from CMS contractorof invoice from CMS contractor CMS cannot touch the moneyCMS cannot touch the money


Getting the DiscountGetting the Discount

To get the discount during the To get the discount during the coverage gap:coverage gap: Enrolled in a PDP or MA-PD plan Enrolled in a PDP or MA-PD plan Drug must be on the formulary, or the Drug must be on the formulary, or the

enrollee obtained an exceptionenrollee obtained an exception The enrollee is not LIS or MedicaidThe enrollee is not LIS or Medicaid Enrollee is partly or wholly in the Enrollee is partly or wholly in the

coverage gapcoverage gap


Access to InformationAccess to Information

For Prescribers: if a manufacturer does not For Prescribers: if a manufacturer does not sign an agreement, none of its drugs are sign an agreement, none of its drugs are Part D drugs Part D drugs

At Pharmacy: Enrollees should receive At Pharmacy: Enrollees should receive better information on what is covered, how better information on what is covered, how much is discountedmuch is discounted Confusing if a straddle claim; or if enrollee has Confusing if a straddle claim; or if enrollee has

supplemental coverage which will pay first, supplemental coverage which will pay first, before discount; or if other health benefits (eg before discount; or if other health benefits (eg SPAP) which pays after discount SPAP) which pays after discount

Coverage Determinations and Appeals Coverage Determinations and Appeals applyapply


Important Issues for Important Issues for Patient/Beneficiary AdvocatesPatient/Beneficiary Advocates

Messaging: Need to provide Messaging: Need to provide information in simple and information in simple and understandable languageunderstandable language

New and improved EOB: enrollees can New and improved EOB: enrollees can follow status of TrOOPfollow status of TrOOP

Accuracy of Information: especially Accuracy of Information: especially about drug pricesabout drug prices

Privacy: important that enrollees Privacy: important that enrollees information is protectedinformation is protected


Annual Wellness Visit & Annual Wellness Visit & Preventive ServicesPreventive Services

Provides an annual wellness visit and Provides an annual wellness visit and personalized prevention plan services as of personalized prevention plan services as of 1/20111/2011

Every 12 months, starting 12 months after Every 12 months, starting 12 months after Welcome to Medicare examWelcome to Medicare exam

No cost-sharing for visitNo cost-sharing for visit Includes personal risk assessment & prevention Includes personal risk assessment & prevention

plan servicesplan services (exam for height, weigh, BMI, blood pressure, (exam for height, weigh, BMI, blood pressure, detection for cognitive impairment, updates for medical and family history, detection for cognitive impairment, updates for medical and family history, lost of risk factors, screening schedule for 5-10 years and more)lost of risk factors, screening schedule for 5-10 years and more)

Eliminates cost-sharing for some preventive Eliminates cost-sharing for some preventive services, effective 1/2011services, effective 1/2011


Medicare 2011 Part D Medicare 2011 Part D PlansPlans

Open enrollment for 2011 play year is Open enrollment for 2011 play year is November 15 – December 31November 15 – December 31

Average PDP plans premium increased by Average PDP plans premium increased by $1$1

Average MA-PDP plans decreased by 1%Average MA-PDP plans decreased by 1% Reduction in plans this yearReduction in plans this year

1.2 million individuals affected by non-1.2 million individuals affected by non-renewals and will have an SEP until 1/21/11renewals and will have an SEP until 1/21/11

600,000 LIS will have to be re-assigned600,000 LIS will have to be re-assigned For state by state fact sheets, go to For state by state fact sheets, go to

www.cms.gov/center/openenrollment.aspwww.cms.gov/center/openenrollment.asp


New: Medicare New: Medicare Disenrollment PeriodDisenrollment Period

January 1 – February 14, 2011January 1 – February 14, 2011 Medicare beneficiaries can Medicare beneficiaries can

disenroll from Medicare disenroll from Medicare Advantage plans and return to Advantage plans and return to Original MedicareOriginal Medicare

Beneficiaries will be able to join a Beneficiaries will be able to join a Medicare PDP at this timeMedicare PDP at this time


2011: Cost Containment2011: Cost Containment

New Center for Medicare & Medicaid New Center for Medicare & Medicaid Innovation within CMSInnovation within CMS Will test, evaluate and expand different Will test, evaluate and expand different

payment structures to foster patient-centered payment structures to foster patient-centered care and care coordination across treatment care and care coordination across treatment centers and slow cost growthcenters and slow cost growth

Freeze income threshold for income-Freeze income threshold for income-related Part B premiums at 2010 level; related Part B premiums at 2010 level; Ties Medicare Part D premiums to income Ties Medicare Part D premiums to income for those with incomes above $85K for those with incomes above $85K individual/$170K couple individual/$170K couple


2011: Medicare 2011: Medicare AdvantageAdvantage

Prohibits MA plans from imposing higher Prohibits MA plans from imposing higher cost sharing for some Medicare covered cost sharing for some Medicare covered benefitsbenefits

Restructure payment to plans by phasing Restructure payment to plans by phasing payments to different percentages of payments to different percentages of Medicare FFSMedicare FFS 2010 average is 114% of FFS2010 average is 114% of FFS Medicare 2011 payments to plans frozen at 2010 Medicare 2011 payments to plans frozen at 2010

ratesrates Cuts in MA payments but not in mandated Cuts in MA payments but not in mandated

services (could result in cut in extra/optional services (could result in cut in extra/optional benefits)benefits)


2012 and beyond2012 and beyond Annual Part D and MA plan enrollment period shifts Annual Part D and MA plan enrollment period shifts

backward to October 15 – December 7, 2011 for backward to October 15 – December 7, 2011 for 2012 plan year2012 plan year

A variety of models, demonstration and pilot A variety of models, demonstration and pilot programs, to promote quality care and cared programs, to promote quality care and cared coordination includingcoordination including Accountable Care Organizations – take responsibility for Accountable Care Organizations – take responsibility for

costs and quality of care of patientscosts and quality of care of patients Medical homes for individuals with chronic conditionsMedical homes for individuals with chronic conditions Medicare Hospice Concurrent Care Demo Medicare Hospice Concurrent Care Demo Medicare Independence at Home demo. Which provides Medicare Independence at Home demo. Which provides

high-need beneficiaries with primary care services in their high-need beneficiaries with primary care services in their homeshomes

Bundled payments per episode of care pilotBundled payments per episode of care pilot Medicare Shared Savings Program to coordinate services Medicare Shared Savings Program to coordinate services

under Parts A and Bunder Parts A and B


Independent Payment Independent Payment Advisory BoardAdvisory Board

15 members, leading experts, appointed by the 15 members, leading experts, appointed by the president for 6-year terms, and 3 HHS officialspresident for 6-year terms, and 3 HHS officials

Membership on IPAB is a full-time jobMembership on IPAB is a full-time job Makes recommendations to Congress to reduce Makes recommendations to Congress to reduce

Medicare spending if spending exceeds target Medicare spending if spending exceeds target growth rate; which Congress must consider growth rate; which Congress must consider under an expedited procedureunder an expedited procedure

Makes annual detailed reports to Congress on Makes annual detailed reports to Congress on health care costs, access and morehealth care costs, access and more


Changes for Nursing Changes for Nursing FacilityFacility

Requires nursing home disclose their ownersRequires nursing home disclose their owners Establishes Quality Assurance Performance Establishes Quality Assurance Performance

Improvement Program to improve quality Improvement Program to improve quality assurance standardsassurance standards

Report information about how well nursing Report information about how well nursing homes are staffed and direct care staff costs homes are staffed and direct care staff costs

Provides training for workers who care for Provides training for workers who care for residents with dementia and to prevent abuse residents with dementia and to prevent abuse Initial training of 75 hoursInitial training of 75 hours


Equal Justice ActEqual Justice Act

Establishes Elder Justice Coordinating Council Establishes Elder Justice Coordinating Council to coordinate activities (govt and private to coordinate activities (govt and private agencies) relating to elder abuse, neglect and agencies) relating to elder abuse, neglect and exploitationexploitation

Additional funding for Adult Protective Services Additional funding for Adult Protective Services (APS) and LTC Ombudsman programs(APS) and LTC Ombudsman programs

Establish and support forensic centers relating Establish and support forensic centers relating to elder abuse, neglect and exploitationto elder abuse, neglect and exploitation

Grants to enhance LTC staffingGrants to enhance LTC staffing


CLASS ActCLASS Act

Establishes new public LTC insurance Establishes new public LTC insurance programprogram

Purchase of community living Purchase of community living assistance services and supports by assistance services and supports by individuals with functional individuals with functional impairmentsimpairments

Financed through voluntary payroll Financed through voluntary payroll deductions or contributions; automatic deductions or contributions; automatic enrollment with opt-outenrollment with opt-out

5 year vesting5 year vesting


CLASS ActCLASS Act Enrollees eligible for benefits after Enrollees eligible for benefits after

meeting disability criteria that is expected meeting disability criteria that is expected to last at least 90 daysto last at least 90 days

If eligible, a cash benefit will be paid based If eligible, a cash benefit will be paid based on functional ability, averaging not less on functional ability, averaging not less than $50 a daythan $50 a day

Secy of HHS required to establish Secy of HHS required to establish premiums to ensure solvency for 75 yearspremiums to ensure solvency for 75 years

Treated in same manner as a LTC Treated in same manner as a LTC insurance policyinsurance policy


Final Thoughts about Final Thoughts about Health ReformHealth Reform

Implementation through guidance Implementation through guidance and regulations is where the rubber and regulations is where the rubber hits the roadhits the road

CBO Projections – extends the CBO Projections – extends the Medicare Trust fund by 12 years to Medicare Trust fund by 12 years to 2029 and will save $124 billion over 2029 and will save $124 billion over 10 years10 years

Important provisions for older adults Important provisions for older adults and provide support for the and provide support for the continuum of care for seniorscontinuum of care for seniors


Hot Issue: Hospital Hot Issue: Hospital Observation Cases on the Observation Cases on the

RiseRise Observation status are patients who Observation status are patients who

are in the hospital but treated as are in the hospital but treated as outpatient rather than inpatientoutpatient rather than inpatient

Should be limited to 24 – 48 hours but Should be limited to 24 – 48 hours but increasing trend of much longerincreasing trend of much longer

Results in higher cost-sharing for Results in higher cost-sharing for patientpatient

Outpatient time doesn’t count toward Outpatient time doesn’t count toward 3 days for SNF care3 days for SNF care


Hot Issue: Improvement Hot Issue: Improvement StandardStandard

For years, individuals with chronic, For years, individuals with chronic, debilitating and degenerative debilitating and degenerative conditions denied skilled therapy if conditions denied skilled therapy if patient’s condition won’t “improve”patient’s condition won’t “improve”

Federal law supports coverage of Federal law supports coverage of maintenance therapy; restoration not maintenance therapy; restoration not requiredrequired

Center for Medicare Advocacy is Center for Medicare Advocacy is looking for plaintiffs for a lawsuitlooking for plaintiffs for a lawsuit

october 1, 2010 leslie fried, aba commission on law & aging health care reform & medicare:...

Documents

law aging slide

coverage gap

aba commission

senate version

debate senate

rebate check

government subsidy

d drug plan