PLEASE CIRCULATE

June 15, 2006

CaliforniaLow-Income Health Advocate Alert

On Medicare Part D

More information on Medicare Part D, including past Alerts, can be found at the www.nsclc.org website, and at www.cahealthadvocates.org/cmc/index.html.

Situ Lawsuit

As discussed in the May 2, 2006 Alert, National Senior Citizens Law Center (NSCLC) and the Center for Medicare Advocacy, Inc. (CMA) filed a class action lawsuit on behalf of dual eligibles in California and across the country on April 26, 2006. The case covers enrollment/subsidy problems.

The Centers for Medicare and Medicaid Services (CMS) assert that Part D problems have been resolved, while advocates continue to see problems. We are interested in hearing if you are seeing dual eligible clients having trouble due to any of the following issues: 1) on the wrong plan (plan differs from what they chose and enrolled in); 2) on more than one plan; 3) not on a plan at all; 4) not correctly receiving the LIS.

State Update

State Back-up Emergency Drug Coverage for Dual Eligibles Continues with New Restrictions

On May 16, 2006, as a result of the passage of AB 813, a new Emergency Drug Benefit (EDB) was established for individuals dually eligible for Medicare and Medi-Cal. AB 813 allows the California Department of Health Services (DHS) to continue covering the cost of medications for dual eligibles unable to access prescriptions from their private Medicare Part D plan. The new program incorporates major changes to the old program, and is effective from May 17, 2006 through January 31, 2007. Under the new program, pharmacies are required to submit a paper treatment authorization request (TAR) to Medi-Cal with an explanation of actions the pharmacy has taken in an attempt to receive payment through Medicare Part D. Advocates are concerned that the steps required by the Medi-Cal Bulletin, issued May 16, 2006, are quite onerous and may discourage use of the EDB by pharmacists when Medicare Part D does not work. DHS has reported that the number of claims has dropped significantly since these new restrictions have been put into place. A copy of the bulletin is available at: http://files.medi-cal.ca.gov/pubsdoco/publications/bulletins/notice/20060516_emergency_bulletin.pdf.

Shortly after this bulletin was issued, advocates advised DHS of various errors and confusing language in the bulletin. DHS has stated that it is in the process of revising this bulletin, and will re-issue an updated version in the very near future; the new bulletin will be available at www.medi-cal.ca.gov/default.asp.

Flyer to be Sent to Dual Eligibles Regarding New Emergency Coverage

DHS has announced that it will send a special flyer describing the Emergency Drug Benefit (EDB) to all dual eligibles who have received the Reduction in Benefits Notice of Action (NOA). The EDB flyer will provide notice of the new emergency program, and will be sent out in 12 languages. When released, this flyer will be posted at www.nsclc.org/issues_health_medicareD_CA.html.

DHS has indicated that this flyer will be sent out in a one-time only mailing to duals who have already received the NOA. DHS does not currently have plans to send this EDB flyer to individuals who become dually eligible in the future.

New Dual Eligibles - Notices going out on a regular basis

As described in the May 2, 2006 Alert, DHS send Medi-Cal prescription drug coverage Reduction of Benefits Notices of Action to over 64,000 individuals who became newly dually eligible from November 15, 2005 to mid-March 2006 in late April, effective May 1st. The notices were translated into 11 languages and will be available on the following website as of June 19th: www.nsclc.org/issues_health_medicareD_CA.html.

Another batch of Reduction of Benefits NOAs will go out on July 11, 2006 to approximately 60,000 Californians who became newly dually eligible from mid-March 2006 to mid-June 2006; the cut-off for Medi-Cal coverage of most drugs will be effective August 1, 2006.

DHS will send out Reduction of Benefits NOAs on a monthly basis starting with this July notice. Individuals identified as newly dually eligible through July 15th will be mailed notices approximately August 11th, with cut-offs effective September 1st; the process will continue monthly thereafter on the same timetable. DHS estimates that approximately 10,000 duals will receive this notice each month.

New All-County Letter: Restoration of Medi-Cal Benefits and Part D

A new All-County Welfare Director's Letter was issued on May 26, 2006, alerting eligibility workers that cases involving restoration of Medi-Cal benefits for federally funded dual eligibles receiving Medicare Part D should not include restoration of complete Medi-Cal drug benefits. The All-County letter includes required language for the Restoration Notice of Action. See: www.dhs.ca.gov/mcs/mcpd/MEB/ACLs/PDFs/2006ACLs/10thru19/c06-18.pdf

Advocacy for California Part D Safety Net

Part D advocates across the state continue to press for the state of California to provide a permanent safety net for dual eligibles. As referenced above, the state legislature passed and the governor signed AB 813, which provides a temporary Emergency Drug Benefit (EDB) through January 2007. The state of California, however, has not acted to cover Part D cost-sharing of dual eligibles enrolled in Medicare Part D. As discussed in previous Alerts, dual eligibles were not previously required to pay cost-sharing for their prescriptions when they were covered through the Medi-Cal program. Now, duals must pay between $1 and $5 per prescription. While coverage of Part D co-payments for duals did not make it into the current state budget, advocates will continue to highlight the issue and press for state action.

Federal Update

CMS Requires Acceptance of Model Coverage Determination Request Form

On May 31st, CMS issued written guidance clarifying that plans are required "to accept any written instrument that is used by the enrollee, the enrollee's appointed representative, or a prescribing physician to request a coverage determination," including the Model Coverage Determination Request form mentioned in the last Alert. The form is available at: www.cms.hhs.gov/MLNProducts/Downloads/Form_Exceptions_final.pdf. The guidance goes on to clarify situations involving coverage determination and exceptions requests using the form, and can be found at: www.nsclc.org/issues_health_medicareD.htm after June 19. The form is not to be used for non-Part D drugs or for biotech/specialty drugs for which drug-specific forms are provided.

Waiver of Late Enrollment Penalty for LIS Beneficiaries for 2006

In addition to the Special Enrollment Period for LIS beneficiaries that was described in last month's Alert (further info is now available at: www.cms.hhs.gov/PrescriptionDrugCovContra/downloads/MemoUpdatedFacilitated%20EnrollmentGuidance_05.12.05.pdf), CMS has announced it will waive the Late Enrollment Penalty for 2006 for individuals receiving the LIS. CMS has not issued this in writing yet, but it can be found in the SSA POMS at HI 03001.001E (6^th paragraph).

Co-Payments for Institutionalized Individuals

Information on "Part D Questions re: Co-Pays for Institutionalized Individuals" was provided in our May 2, 2006 Alert. The link is now available at: www.cms.hhs.gov/States/Downloads/QonInstStatusnCopays.pdf

Late Enrollment Penalty Calculations

CMS has clarified how the late penalty is calculated. For more information see Washington Weekly article on the topic at www.nsclc.org/issues_health_medicareD_CA.htmlafter June 19.

LIS Cost-Sharing Clarification: "Lesser Of" Test

Advocates have heard that some LIS beneficiaries are being charged inappropriately. In instances where LIS co-payments and non-LIS co-payments differ, CMS has clarified that an LIS-eligible beneficiary should only pay the lesser of their LIS co-payment ($1/$2/$3/$5 or 15% of negotiated price, depending on LIS level and drug) or the tiered co-payment (for an non-LIS individual on the plan). See www.cms.hhs.gov/DrugCoverageClaimsData/Downloads/PDEGuidance.pdf, pp. 43-44.

SSA 2006 LIS Figures

The Low-Income Subsidy income eligibility figures vary by household size and are adjusted each year; household may include a beneficiary's spouse and dependent relatives. A chart showing the 2006 LIS income levels by household size is available at: https://s044a90.ssa.gov/apps10/poms.nsf/lnx/0603001010!opendocument.

CMS Reverses Position, Covers Niacin as a Part D Drug

In part at the urging of advocates, CMS reversed its earlier position treating prescription Niacin as a non-Part D vitamin, and announced that prescription Niacin products are covered Part D drugs as of April 11, 2006. Plans can choose whether or not to cover Niacin for the remainder of 2006; individuals in plans not including Niacin on their formulary can file an exception and may appeal if denied. Niacin as a prescription drug is used to treat high cholesterol; advocates were concerned that CMS's earlier policy not to include Niacin on the Part D formulary would lead to beneficiaries taking over-the-counter Niacin products in an unsafe manner. Niacin will no longer be covered by Medi-Cal. See: www.cms.hhs.gov/PrescriptionDrugCovContra/Downloads/PrescriptionNiacinClarification_04.11.06.pdf.

CMS Enrollment Data

On May 7th, CMS released various plan enrollment data, including information by county, by state and by plan. California has almost 900,000 dual eligibles and an additional 1.75 million non-dual Part D beneficiaries for the period of November 15, 2005 to May 7, 2006. See www.cms.hhs.gov/PrescriptionDrugCovGenIn/02_EnrollmentData.asp.

On June 8th, CMS released updated Part D enrollment data. See the CMS Fact Sheet, dated June 8, 2006 at: www.cms.hhs.gov/apps/media/press/release.asp?Counter=1876. By some accounts, 4 to 5 million Medicare beneficiaries eligible for Part D have not enrolled, including over 3 million nationwide who could be eligible for the Low-Income Subsidy.

Consumer Pamphlets from CMS

CMS has recently released various resources for consumers:

1. Information on Medicare rights and protections: www.medicare.gov/Publications/Pubs/pdf/10112.pdf
2. Materials related to the Low-Income Subsidy: www.cms.hhs.gov/States/03_lowincomesubsidy.asp (item 7)
3. Materials related to having Social Security withhold Part D premiums: www.cms.hhs.gov/States/02_What's%20New.asp (item 3)
4. Information given to individuals newly eligible for Medicare, including duals, "Welcome to Medicare," www.cms.hhs.gov/NationalMedicareYouTrain/TL/itemdetail.asp?filterType=none&filterByDID=0&sortByDID=3&sortOrder=ascending&itemID=CMS026544

Advocacy Tips:

Open Enrollment Period Lasts Until June 30^th

Although the Annual Enrollment Period (AEP) and the Initial Enrollment Period (IEP) for the general Medicare population has ended as of May 15, 2006, Medicare Part D-eligible individuals can still take advantage of the 2006 Open Enrollment Period (OEP) which allows changes into and out of Medicare Advantage plans. The 2006 OEP is open until June 30^th. Medicare Advantage plans include health maintenance organizations (HMOs), local and regional preferred provider organizations (PPOs), and private fee-for-service plans; these may include prescription drug benefits (MA-PD) or not (MA).The OEP can be used to:

- transfer from a stand-alone prescription drug plan (PDP) to an MA-PD

- transfer from an MA-PD plan to another MA-PD plan

- transfer from a an MA-PD back to original Medicare plus a PDP

- transfer from an MA plan to another MA plan

- transfer from an MA plan to original Medicare

The new coverage is effective the first day of the following month. The OEP cannot be used to transfer from one PDP to another PDP or to enroll in Part D if an individual failed to do so by May 15th. Note: In 2007 and subsequent years the OEP is from January 1st - March 31st.

Beware Disenrollments Unaccompanied by Enrollments & Know Your Special Enrollment Periods

Advocates should be aware that in some circumstances a beneficiary has limited enrollment opportunities (e.g., most non-dual eligibles only have one initial enrollment period opportunity and one annual enrollment opportunity as well as the open enrollment mentioned above) allowed for plan changes; a disenrollment from a plan counts as usage of the opportunity. This means that a disenrollment that is not accompanied by a simultaneous or same-month enrollment in a different plan may use up the opportunity, locking the individual OUT of any Part D plan until the next annual enrollment period (November 15 to December 31). Be sure to review enrollment and disenrollment rules carefully. As a general rule, if an individual wishes to change plans (stand-alone or Medicare Advantage) during a permissible time period, s/he should enroll in the new plan, which will automatically disenroll them from their current plan (instead of first disenrolling, which may count as an election, and then enrolling in their new plan).

Now that May 15th has passed, Medicare Part D beneficiaries can only change plans if they are entitled to a Special Enrollment Period (SEP) or making a Medicare-Advantage-related change (OEP, see above). Those eligible for Special Enrollment Periods include the following (not an exhaustive list): 1) individuals receiving LIS (dual eligibles and those on Medicare Savings Programs have an ongoing SEP; others have a one-time SEP), 2) individuals moving into or out of a long-term care facility, 3) individuals who rely on incorrect info from a federal government employee, 4) individuals who can show their plan violated a material provision of its contract with CMS, 5) individuals moving out of their plan's service area, 6) individuals who involuntarily lose creditable coverage or who were given incorrect information about creditable coverage, 7) Katrina victims; 8) individuals who experience an involuntary loss of creditable coverage.

For more information, see "PDP Guidance on Eligibility, Enrollment and Disenrollment":www.cms.hhs.gov/PrescriptionDrugCovContra/Downloads/PDP_EnrollmentGuidance_08.29.05.pdf and NSCLC's Enrollment and Eligibility - Overview at www.nsclc.org/news/06/06/enroll_elig_0606.doc.

Language Access Update

A group of advocates across the state has met several times to discuss the additional onerous burdens individuals with Limited English Proficiency (LEP) face in accessing Part D prescription drugs. For more information, contact Katharine Hsiao or Jeanne Finberg at the National Senior Citizens Law Center, Randy Boyle or Doreena Wong at the National Health Law Program, or Sonal Ambegaokar from the National Immigration Law Center.

Tools to Assist Advocates

Three new useful tools for advocates are available on the NSCLC website:

Enrollment and Eligibility - Overview:

www.nsclc.org/news/06/06/enroll_elig_0606.doc

Low-Income Subsidy - Overview:

www.nsclc.org/news/06/06/LIS060706.doc

Part D Payments, Limits and Eligibility Requirements that Change Based on Other Indicators - Chart:

www.nsclc.org/news/06/06/partdlimits_chart_0606.doc.

Recent Resources & Publications on Medicare Part D and Low-Income Populations

Rx Assist Patient Assistance Program Center publishes a list of Patient Assistance Programs that still assist individuals on Medicare Part D: www.rxassist.org/docs/medicare-and-paps.cfm.

Kaiser Report, "Toward Making Medicare Work for Low-Income Beneficiaries: A Baseline Comparison of the Part D Low-Income Subsidy and Medicare Savings Programs Eligibility and Enrollment Rules, Center for Medicare Advocacy," May 18, 2006. See http://kff.org/medicare/7519.cfm.

GAO Report, "Medicare Communications to Beneficiaries on Prescription Drug Benefit Could Be Improved," May 3, 2006. See www.gao.gov/new.items/d06654.pdf.

Keep Those Stories Coming

The adverse publicity regarding the problems that dual eligibles are facing is helping to get the changes we need at the state and federal levels. We need to keep our client stories in the press to get more permanent relief, and we need plaintiffs for our dual eligibles lawsuit. Please help us by identifying clients or their family members who are willing and able to talk to the press, or willing to be named plaintiffs. Send stories and contacts to jfinberg@nsclc.org, khsiao@nsclc.org or oakland@nsclc.org. An optional form is available at: www.nsclc.org/news/06/partd_stories2_.pdf.

More information about Medicare Part D is posted on www.calmedicare.org, and on the main page and California page of the NSCLC website, which you can view at www.nsclc.org. We will continually post new training materials as this program develops. Other helpful websites: Center for Medicare Advocacy at www.medicareadvocacy.org; Health Consumer Alliance at www.healthconsumer.org; Families USA at www.familiesusa.org; Medicare Rights Center at www.medicarerights.org; California Health Advocates at www.cahealthadvocates.org; California HealthCare Foundation at www.chcf.org/topics/healthinsurance/drugbenefit; Health Assistance Partnership at www.healthassistancepartnership.org; and Kaiser Family Foundation at www.kff.org/medicare.

For more information, e-mail NSCLC or CHA:

National Senior Citizens Law Center

Jeanne Finberg

jfinberg@nsclc.org

Katharine Hsiao

khsiao@nsclc.org

Georgia Burke

gburke@nsclc.org

(510) 663-1055

California Health Advocates

David Lipschutz

dlipschutz@cahealthadvocates.org

(213) 381-3670