DIVISION OF HEALTH POLICY AND FINANCE
KATHLEEN
SEBELIUS, Governor
ROBERT M. DAY, Ph.D., Director
MEMORANDUM
|
TO: |
SRS/EES Regional Office Staff
HealthWave Eligibility Clearinghouse Staff |
DATE: |
November 7, 2005 |
FROM: |
Scott Brunner, Medicaid Director
Bobbi Mariani, EES Director |
RE: |
Implementation of Medicare Part
D and the Medicare Part D Subsidy |
The Medicare Prescription Drug, Improvement and Modernization Act of
2003 (MMA) established the Medicare Prescription Drug program by adding
Part D to the Medicare benefit. The program goes into effect January
1, 2006. This memo provides initial instructions for implementation
of the new benefit as well as Medicare D Subsidy, as provided in KEESM
Revision 26.
- MEDICARE PART D INFORMATION
- General Information
Medicare prescription drug coverage will be available to anyone
entitled to Medicare. All current Medicare beneficiaries have been
notified of the new
program benefits through a series of special mailings from CMS, including the ‘Medicare
and You 2006' handbook. New Medicare beneficiaries will be notified of Part
D options when they are notified of general Medicare entitlement prior to the
initial enrollment period.
Coverage is provided through private companies who have been approved
by CMS to provide coverage. The Medicare beneficiary chooses which plan
they wish to enroll with. There are two basic types of plans to choose
from:
- Prescription Drug Plan (PDP) - A stand-alone prescription
drug insurance plan offered through private companies.
- Medicare Advantage Prescription Drug Plan (MA PDP)
- A plan
which provides coverage under Medicare Parts A and B as well
as prescription
drug coverage. Medicare Advantage plans provide coverage
through a contracted or preferred provider network. People who
are enrolled in a MA plan must
receive Part D coverage through the same plan.
Note: Persons in a PACE plan will receive prescription drug coverage
through the PACE provider and payment will be part of the capitated rate.
In Kansas, 15 companies offer 40 PDP plans. There are a total
of 9 companies offering 25 MA PDP options, but most are regionalized
and are available in
specific areas only. See the ‘Medicare and You 2006' handbook for
a complete list of coverage options.
- Benefits
The Medicare beneficiary will receive comprehensive prescription
drug coverage through Medicare Part D. Each plan will operate with
a formulary, or a list
of preferred drugs that are covered for all members. Other drugs may be covered
if medically necessary and each plan must have an appeal process. The formulary
will vary by plan. Plans must contract with pharmacies to become a participant
in their preferred network. Each plan will soon publish it’s preferred
formulary and list of preferred pharmacies or providers.
- Costs
Persons electing Medicare Part D coverage will be subject to the
following costs for coverage:
- Premiums - A monthly premium will be charged to each
enrollee. Premium charges range from about $10.00/month to
over $125.00/month for some
MA-PDP plans. The beneficiary can elect to have the premium
withheld from his Social Security benefit or can pay it directly
to the company.
The Basic Premium: Beneficiaries may elect to join plans with additional
benefits, such as a broader provider network or more extensive preferred
drug list. CMS calls these enhanced alternative plans. Carriers will
charge more for these enhanced plans. This will be most important for
dual eligibles and other subsidy recipients because the subsidy premium
benefit is limited.
Note: Unlike Medicare Parts A and B, coverage and premium information
for Part D will not be available on EATSS.
-
Deductibles - The amount of expense the
beneficiary must incur before coverage begins. The standard
annual deductible
for a Medicare Part D
plan is $250. However, some plans offer coverage with lower
or no deductible.
- Copayments and Coinsurance - Cost sharing applicable after
the deductible has been met, usually applied to each service
or drug received. These
may be a percentage of the total cost or a set amount for each prescription
received. Generally, the beneficiary will have a 25% coinsurance charge
for each prescription filled. However, this can vary by plan and by the
type of prescription that has been filled.
- Medicare Part D Entitlement Date
Persons who are entitled to Medicare Part A or Medicare Part B
are also entitled to Medicare Part D. The date of entitlement to
Medicare Part D is critical,
as it is the entitlement date which triggers the Medicaid payment exclusion
addressed in item (3) below and not the enrollment date. The following rules
apply when determining the Medicare Part D date of entitlement:
- Current Beneficiaries - Entitlement to Part D is effective
January 1, 2006 for all persons entitled to Medicare on or
before that date.
Example: Benji has been a Medicare beneficiary since 01-1977. His Medicare
Part D entitlement date is 01-2006.
- New Beneficiaries Prospectively Entitled to Medicare
B - For persons
prospectively entitled to Medicare, the Medicare Part D effective date
is the earliest of entitlement to Part A or B.
Example: In 02-2006 Sam reports his Medicare will begin
04-2006. 04-2006 is the Medicare Part D entitlement date.
If Sam doesn’t
enroll in a plan until 08-2006, the Medicare entitlement
date is still 04-2006.
- New Medicare Beneficiaries Retroactively Entitled
to Medicare Part B - For persons determined retrospectively entitled to
Medicare Parts
A or B, Medicare Part D entitlement is effective the month of notification
of Medicare entitlement. This essentially means that Parts A and B may
be effective prior to Part D. The Medicaid payment exclusion does not
apply in this situation and Medicaid can pay drugs up through the month
of Medicare entitlement notification.
Example: Jennifer’s disability application with
SSA has been pending since 2003 and is approved in 06-2006.
Later that
month, she
is notified her Medicare entitlement begins 02-01-2006. However,
because Medicare Part D entitlement is not retroactive in these
situations,
Medicare Part D begins 06-01-06. Medicare Parts A and B are effective
02-01-2006.
If Jennifer is a Medicaid recipient, her prescription expenses
are covered until the date of Medicare Part D entitlement,
or 06-2006.
- Source of Entitlement Information
An automated source of Medicare Part D enrollment or entitlement information
is not available to DHPF or SRS staff prior to case approval. Unlike
Part A or B information, which is available on EATSS, Part D information
is not included on another automated data source. The best source of
enrollment information is the applicant. Although having the information
available may be helpful, providing proof of Medicare Part D is not an
eligibility requirement unless there are other issues to warrant the
need for the information, such as a retroactive entitlement.
For Medicaid purposes, the entitlement date is determined based on the rules
described above. The date determined by KAECSES is assumed to be correct unless
the worker receives verification of a different Part D entitlement date. If
it is determined the entitlement date on KAECSES is not correct, it is important
to ensure the correct date is entered on both KAECSES and MMIS.
Once the case is approved and information is sent to the MMIS, the
beneficiary will be included on the MMA file (addressed below). Each
month, we will receive a response to the MMA file list which provides
the actual entitlement date and any enrollment information. This is considered
our primary verification source of Part D entitlement. If the entitlement
date is different from the entitlement date originally determined by
the MMIS, the case will be researched and the case worker notified if
any action is necessary.
- Enrollment
Enrollment refers to joining a prescription drug plan. The effective
date of enrollment is the date the plan becomes responsible for
providing the beneficiary’s
prescription drug coverage. To enroll with a plan, the beneficiary must complete
an enrollment form. The plan is responsible for verifying certain information
with CMS, such as their eligibility to enroll with a drug plan. Persons who
live outside the plans coverage area or are in jail cannot enroll. Enrollment
into the plan is effective the month following the month the completed enrollment
request is received.
Medicare beneficiaries can enroll in a new plan only at certain times,
called enrollment periods. There are three types of enrollment periods:
- Initial Enrollment Period (IEP) - The first opportunity to
enroll in a Medicare prescription drug plan.
For current Medicare beneficiaries, the period begins 11-15-05 and
runs through 05-16-06.
Example: Beth in an ongoing beneficiary. She fills out an accepted
enrollment form in 11-2005. Enrollment is effective 01-2006. Seth is
also an ongoing beneficiary. He fills an enrollment form out in 02-2006.
Enrollment is effective the month following the month the request is
received or 03-2006.
For new Medicare beneficiaries, the IEP is the same as the existing
7-moth period for Part B. IT begins three months prior to the month the
person is eligible and runs three months past the month of eligibility.
Requests received prior to the month of eligibility are effective the
first day of eligibility. Those received later are effective the month
following the month of receipt.
Example: Jack turns 65 in 05-2006 so his IEP runs from 02-01-2006
through 08-31-2006. If his enrollment request is received prior
to 05-01-2006,
coverage in the plan begins 05-01-2006. If it is received after
that date, but still within the IEP timeframe, it is effective
the first
day of the following month. If Jack’s request is received
on 06-15-2006, enrollment is effective 07-01-2006.
- Annual Enrollment Period (AEP) - An open enrollment period
for all Medicare beneficiaries to change plans. Each year, the
AEP begins on
11-15 and ends on 12-31. Enrollment in the new plan is effective 01-01
of the following year.
- Special Enrollment Periods (SEP) - Special period where the
Medicare beneficiary is allowed to change plans because of his
situation. For
most enrollment changes, coverage is effective the month following the
month the request is received, but there are exceptions. The following
events are examples of situations causing an SEP:
- The individual is full dual eligible or a partial dual
eligible. The SEP for a dual eligible begins the first month
of Medicaid
or MSP eligibility and
ends 3 months following the month of termination. This essentially means
that a dual eligible may change plans each month. The new
plan choice is effective
the month following the month the enrollment application is received
by the PDP. This same benefit is not available to a subsidy
eligible individual
or a persons with only a Medically Needy unmet spend down.
The request will be
effective the month after the month the PDP receives the enrollment request.
- An individual moves outside of the plan’s service
area. The effective date is driven by the date the beneficiary
moves and the date
reported.
- The beneficiary moves into, resides in, or moves out
of an institution. The request is effective the month following
the month the PDP receives
the enrollment request.
- The beneficiary is currently covered under an alternate
creditable plan (see item J below) which stops providing
creditable coverage.
- The PDP is in violates certain terms of the CMS contract
which impact the individual beneficiary.
- The PDP stops providing coverage.
- Late Enrollment Penalty
Persons who do not enroll in a Medicare Part D plan during the initial enrollment
period may only do so during the annual enrollment period or a special enrollment
period. Except where creditable coverage exists, there will be a penalty for
late enrollment if the beneficiary doesn’t enroll during the initial
period. The fee is 1% of per month for every month enrollment is delayed. It
is not waived if the beneficiary later enrolls during an open enrollment period.
The fee is assessed based on the base Medicare D premium for the calendar
year. In 2006 the base premium is $32.20. A person who waits to enroll
for 3 months past the initial enrollment period will pay a 3% monthly
penalty, about $.96. Since the premium is computed on the base premium
for the calendar year, it will be adjusted every year.
Example: Iris has been a Medicare beneficiary since 1995. She doesn’t
enroll with a plan until October 2006 when she enters a nursing facility.
Enrollment is effective November 1. There is a 5 month penalty applied,
or about $1.60, to her monthly premium.
- Auto Enrollment in a Medicare Part D Plan
As stated in information previously in the the Auto Enrollment of Medicaid
Beneficiaries Memo, 10-31-2005, all full duals, partial duals and subsidy eligibles
who fail to enroll in a Medicare Part D plan on their own will be automatically
enrolled into a Medicare Part D Plan. Information on the auto enrollment process
for the initial group of full dual eligibles was outlined in the memo. The
partial dual eligibles will be auto enrolled in a similar batch process in
May, 2006 to be effective June, 2006. DHPF should receive the assignment information
for the partial duals in late April, 2006. All full dual eligibles who were
not in the original file, but have been approved prior to the MMA file deadline
of 12-15-05 will be auto enrolled for January, 2006. CMS has since reported
those beneficiaries whose benefits are approved between 11-15-2005 and 12-15-2005
may experience delays in notifications of their auto enrollment.
For enrollments after 2005, the effective date of auto enrollment is
dependent upon Medicaid status at the point of Medicare entitlement.
- Medicaid First - Medicare Later- For persons
who are Medicaid eligible first and then become entitled to Medicare,
the effective
date of auto enrollment
is the first day of Part D entitlement. CMS has indicated they will
attempt to accomplish the enrollment prior to the effective date
of Part D entitlement.
If the Medicaid application is received on or before the month of Medicare
entitlement, Medicare enrollment may be retroactive. This is one of
the few situations where enrollment may be retroactive.
Example: Sam is a Medicaid recipient on the Working Healthy
program. On 04-10-2006 he tells the worker his Medicare entitlement
begins 06-01-2006.
If Sam doesn’t
pick a plan, he will be auto enrolled prior to 06-01-2006 if CMS knows he is
a Medicaid beneficiary. If CMS doesn’t identify his Medicaid
status until a later date, coverage may be retroactive.
- Medicare First - Medicaid Later - For persons
with Medicare who later become Medicaid eligible, auto enrollment
is effective
the second
month following the month the individual is recognized on the MMA file.
This is applicable to both partial and full duals. Upon receipt of the
MMA file, CMS determines the individual hasn’t signed up for a
plan and will flag the individual as a person to be auto enrolled. CMS
will send a notice to the client the following month as notification
of the pending auto enrollment. In order to give the individual time
to pick a plan on their own, the assignment will not be effective until
the first day of the second month following the notice.
Example: Terry, an ongoing Medicare beneficiary who didn’t
sign up for a Medicare prescription drug plan, applied for Medicaid
on 05-21-2006
and was approved on 06-12-2006. Her status as a full dual eligible
will be indicated on the June 2006 MMA file. CMS will target
the individual
for assignment to a PDP and will include Terry on the July auto
enrollment run. She will receive notice from CMS in late July. Terry
may choose
to change plans until the enrollment effective date of September
1, 2006.
Example: John began receiving Medicare in 05-2006 and applied
for Medicaid in 08-2006. His application was approved with an
unmet spenddown
for
the period 08-2006 through 02-2007. He is not eligible for subsidy
or a Medicare Savings Plan. On October 17, 2006 he brings in
an expense incurred by his ineligible wife, which meets the spenddown.
John is
now
a full dual. On October 20, the case is authorized for August -
November.
Because John didn’t pick a plan, he is subject to auto enrollment.
John’s name is sent to CMS as a full dual on the November
MMA file and will be notified in December. John will be auto enrolled
two months
later, or 02-01-2007.
- Medicare to Subsidy D only - For persons with Medicare who
become eligible for Part D subsidy only, auto enrollment is effective
the first
day of the month following the expiration of the beneficiary’s
next open enrollment period.
Example: Joyce is approved for Part D subsidy in 07-2006. However,
she didn’t enroll with a PDP. She will be auto enrolled following
her next open enrollment period. Unless there is another change prompting
a special enrollment period for Joyce, she will be eligible to enroll
in a Part D plan in the open enrollment period running November 15, 2006
through December 31,2006. If she doesn’t enroll in a plan
during the open enrollment period, she will be auto enrolled effective
the
first day of the next month, or January 1, 2007.
- Affirmatively Decline
Beneficiaries who do not want to be auto enrolled into a Medicare
Part D plan must make a specific request to stop the process. All
dual eligible
and subsidy eligibles will be subject to auto enrollment. A beneficiary
may “affirmatively decline” auto enrollment by contacting
Medicare directly or the PDP to which the individual has been prospectively
auto enrolled. CMS will place a special indicator on the beneficiary’s
file to indicate refusal of Part D coverage.
Persons may choose to affirmatively decline if they have alternate,
creditable coverage that they want to preserve. However, persons may
also decline for other reasons. Regardless of why, there is no Medicaid
penalty for affirmatively declining. However, Medicaid will not pay prescription
drugs as long as the beneficiary is entitled to Medicare Part D. If the
beneficiary later decides he wants to be auto enrolled, he can request
to have the indicator removed from his record.
-
Creditable Coverage
A Medicare beneficiary may continue to be offered drug coverage through
a private company or employer. The MMA provides special funding to those
employers or companies who offer an alternative to Medicare Part D if
the coverage is considered creditable. For MMA purposes, creditable coverage
is coverage which is actuarially better or equal to coverage offered
under Medicare Part D. Beneficiaries who choose to sign up for a creditable
plan can delay enrollment into Medicare Part D without incurring a late
enrollment penalty. The company or entity offering the alternative plan
is responsible for determining if the coverage is creditable and for
notification of the beneficiary.
Although it is possible for prescription drug coverage offered through
a Medicare supplemental plan to be creditable, CMS has stated they believe
no standard supplemental plan H or plan I or plan J will meet the creditable
coverage definition (see Kansas Insurance Department website).
- Impact on Medicaid Coverage
Beginning with the date of Part D entitlement, Medicaid will no longer
cover most prescription drugs for Medicare beneficiaries. This is different
than the supplemental coverage Medicaid and QMB provide for services
covered under Medicare Parts A and B. The MMA strictly prohibits the
state Medicaid program from claiming federal matching funds for any prescription
drugs included in a covered therapeutic class. This is true regardless
of whether the actual drug the beneficiary receives is covered by the
plan.
Example: David has both Medicare and Medicaid coverage. On
01-05-2006 his doctor prescribes a pain killer, oxycodone, which
has been covered
by Medicaid in the past. However, his new Medicare plan does not
cover this drug on it’s basic formulary and covers other pain killers
such as codine or morphine. David appeals the plan’s decision to
deny coverage, but David doesn’t win the appeal. Since he still
has a Medicaid card, he asks his caseworker about getting Medicaid
to cover the drug because they cover other services Medicare denies.
However,
Medicaid will NOT cover the drug. Even though it is not covered by
his Medicare PDP, Medicaid is not a secondary payer to Medicare pharmacy
coverage. David must choose to pay for the drug himself or use another
pain killer.
Current full dual eligible lose drug coverage through Medicaid on 12-31-05
and Medicare Part D coverage begins on 01-01-2006. Persons who become
full dual eligible in the future will not have drug coverage under Medicaid
beginning the date of Medicare Part D entitlement.
Exceptions to coverage rules - There are two primary exceptions to the prescription
drug exclusion.
- Excluded Drugs - Certain drug classes were
specifically excluded from Medicare Part D coverage. Medicaid
is allowed
to cover these drugs.
Kansas Medicaid has elected to continue to cover those drugs
listed below, at current coverage levels available to non-Medicare
beneficiaries. The
following is a full list of excluded drugs and current Medicaid
coverage rules (for up-to-date coverage information, please
see the KMAP web site):
- Drugs for anorexia, weight loss or weight gain
- Medicaid provides coverage of some weight loss medications.
Others are not covered.
- Drugs used to treat fertility - Medicaid does not cover.
- Drugs for cosmetic or hair growth purposes - Medicaid
does not cover.
- Prescription vitamins and minerals, except prenatal
and fluoride - Medicaid covers prenatal and fluoride as
well. Coverage of other vitamins
is very limited.
- Over the counter medication - Covered by Medicaid in
specific instances only (e.g., Kan-Be-Healthy and certain
NF beneficiaries).
- Drugs used for the systematic relief of cough
and colds - Medicaid does not cover.
- Barbiturates - Covered by Medicaid.
- Benzodiazepines - Covered by Medicaid.
Although not covered under general Medicare Part D plans, a PDP can
offer them in the coverage package of a supplemental benefit to an upgraded
plan.
- Drugs covered under Medicare Parts A or B - Medicare currently
provides coverage of some drugs under parts A and B. This coverage
will continue at
current levels. Full Medicaid as well as QMB will continue to provide
secondary coverage for these expenses.
- Part A provides coverage of drugs as part of the inpatient
rate paid during hospital and nursing facility stays. Part
A also provides
coverage of drugs
related to pain relief and symptom control under the hospice benefit.
- Part B covers a broader range of drugs, the most common
Part B covered drugs are the following:
- Drugs given through and injection or infusion that
are not usually self-administered. Examples are chemotherapy
treatments given in a physicians
office and respiratory drugs, supplied by a DME provider, and given through
a nebulizer;
- Drugs provided during out patient treatment;
- Certain drugs related to the treatment of End
Stage Renal Disease;
- Immunosuppressive Drugs, or those used for transplant
therapy, if Medicare paid for the transplant;
- Certain vaccines, such as the Pneumococcal, Hepatitis
B and Influenza vaccines; and
- Some oral medications, such as chemotherapy and
anti-nausea drugs for cancer treatment and hemophilia
clotting factors.
Many of these drugs listed above are covered only for specific medical
conditions. If the drugs is used for other purposes, the drug may be
covered under the Part D plan.
- MEDICARE PART D SUBSIDY
Assistance with Medicare Part D costs is available for people with
limited income and resources, including those who receive Medicaid. The
new benefit, the Medicare Part D Subsidy, provides coverage through two
avenues: those deemed eligible due to eligibility for another Medicaid
program and those determined eligible through a separate program determination.
CMS is responsible for provision of benefits under either determination.
DHPF/SRS provide only the eligibility determination.
Because CMS is responsible for maintaining information on the subsidy,
eligibility determinations completed by Kansas Medicaid must be communicated
to them. This is done through a monthly file transfer. This file is sent
to CMS on the 15th of each month. Limited information on the monthly
file transfer is available, see the Auto Enrollment of Medicaid Beneficiaries
Memo dated 10-31-2005. More information will be made available at a later
date.
Persons approved for subsidy through either the deemed or determined
process receive the subsidy benefit through 12-31-2006 regardless of
changes. Persons deemed eligible in 2005 are eligible for the calendar
year 2006. Those deemed or determined eligible in 2006 are eligible for
the remainder of the calendar year 2006. More information will be provided
on eligibility periods past 2006. It now appears that CMS will not reduce
the level of subsidy for a person in the calendar year 2006 and will
only react to changes which will reduce the beneficiaries cost sharing.
More information on these rules and rules for eligibility periods past
2006 will be provided when available from CMS.
- DEEMED ELIGIBLES
Persons approved for Medicaid under any category, including Medically
Needy with a met spenddown or a Medicare Savings Plan are deemed eligible
for the Medicare Part D subsidy. A separate application is not needed
nor is a separate determination required for the months of deemed coverage.
- Effective Date - Subsidy is effective the first month of
mutual eligibility under one of the deemed groups and entitlement
to Medicare
Part D. A person is considered deemed regardless of whether enrollment
into a plan has taken place. CMS will attempt to identify current Medicaid
recipients prior to the effective date of Medicare in order to ensure
subsidy is in place on the first day of Medicare entitlement
Example: Bill is an ongoing Medicaid eligible who becomes entitled
to Medicare beginning 06-01-2006. Bill is deemed eligible for subsidy
beginning 06-01-2006.
Example: Betty is a Medicare beneficiary who is approved for a prior Medically
Needy spenddown period of 03/2006 though 05/2006 and a current base period
of 06/2006 through 11/2006. She chooses to use a due and owing bill to meet
her prior spenddown. Betty is deemed eligible for the subsidy beginning 03/2006.
- Benefits of the Subsidy - The subsidy provides help with
Medicare cost sharing. Individuals deemed subsidy eligible
receive the following
benefits:
- Basic Premium Coverage - The subsidy will provide coverage
of the lowest premium a plan offers, up to the basic premium
level for the state.
A beneficiary receiving the subsidy may elect an enhanced or higher cost
plan, but he is responsible for the difference. The current benchmark
premium cost for Kansas is $33.44.
Example: Benny wants to join plan X, which offers the following premiums:
Basic Premium - $25.00
Enhancement - $35.00 (an additional $10.00)
If approved for subsidy, the lower of the benchmark premiums for the state
or the cost of the basic premium will be covered. Additional costs will not
be covered. For Benny, the subsidy would only cover $25.00 (since it is lower
than the benchmark). If he wants the enhancement, he must pay the full $10.00/month
extra.
Example: Bunny wants to join plan Y, which offers the following premiums:
Basic Premium - $37.00
Enhancement - $5.00
If approved for subsidy, the lower of the benchmark premium and basic premium
for the plan will be covered. For Bunny, the benchmark is lower, so $33.44
of the premium will be covered. If Bunny still wants to enroll in Play Y, she
must pay $3.56 for the basic or an extra $8.56 ($3.56 = $5.00) for the enhanced
plan.
Late Enrollment Penalty: Persons approved for Medicare Part D subsidy
will receive be relieved of a portion of the penalty for the first 5
years. Persons who are deemed eligible for the subsidy will pay 20% of
the penalty.
Example: Iris, from the example in item I (F) above, is approved for
Medicaid in November, 2006. She will be responsible for 20% of the penalty,
or about 32 cents each month.
Beneficiaries determined eligible for the subsidy will not receive
the 20% exemption and must pay the full premium penalty.
- Deductible - The subsidy will cover the standard $250.00
annual deductible. Please note that some plans to do not
charge a deductible.
- Copayments/Coinsurance - Beneficiaries deemed
eligible for subsidy will have a standard copayment for each covered
prescription. The copayment
is based on Medicaid status:
- Persons eligible for QMB, LMB or Expanded
LMB only - $2.00 per generic or preferred brand and $5.00 prescription
for all others.
- Persons eligible for full Medicaid coverage,
including a met spenddown under the Medically Needy
program,
and income is at or below 100% of
FPL - $1.00 per generic or preferred brand and $3.00 for other prescriptions.
- Persons eligible for full Medicaid coverage,
including a met spenddown under the Medically Needy
program,
and income is above 100% of FPL - $2.00
per generic or preferred brand and $5.00 for other
prescriptions.
- Persons eligible for full Medicaid coverage
and a resident of an approved institutional living
arrangement
(Nursing Facility, State Hospital,
ICF-MR, Swing Bed, Head Injury-Rehab or other recognized Medicaid approved
institution - For persons in the institution at least 30 days, no copayments
will be charged for covered prescriptions. HCBS recipients are not considered
institutional residents and will be charged a copayment
The Medicaid status which determines the level of copayment
is indicated on the monthly MMA file each month. The file reports
the
information
as it comes to the MMIS from KAECSES. For MS programs, the income
level will be determined by the countable income entered on
KAECSES. Where
income isn’t enterable on KAECSES (such as the MA CM and
SI programs) the person will be assumed to have income less than
100%
FPL. Information
on the LOC screen in the MMIS, which comes from the KAECSES LOTC
screen, will be used to determine the institutional indicator.
- Determined Eligibles
DHPF and SRS, as the Medicaid agency, and Social Security have been
given authority to process subsidy applications. Information on the SSA
process is available in Policy Memo 05-05-02. Since the formal application
period for the subsidy benefit began in July, we have relied on Social
Security to process all applications. To meet federal requirements, SRS
will begin processing applications for this benefit on January 1, 2006.
Because Social Security continues to encourage applicants through
it’s
system, referrals to Social Security for subsidy determination continue
to be appropriate. If an individual indicates the only benefit he
is interested in is Medicare Part D subsidy, a referral to Social
Security
is appropriate. The worker, or other SRS staff person, may assist
with the application process.
If the client submits an application for medical coverage, Medicare
Part D subsidy is another program option and shall be processed for persons
who are not determined eligible under a deemed group. If an individual
applies for full Medicaid or a Medicare Savings Program, but is denied,
a subsidy determination shall then be completed. These applications are
not to be referred to Social Security, unless the person makes a specific
request to have the application processed by SSA. SRS, including state
staff at the Clearinghouse, shall process the subsidy application for
persons also seeking another benefit plan that does not offer a deemed
subsidy status, such as Medically Needy with an unmet spenddown or TB.
Note: Beneficiaries determined eligible for the subsidy will not receive
the 20% exemption for a late enrollment and must pay the full premium
penalty.
- Medicare D Subsidy Eligibility Requirements - The
non-financial and financial rules of the MS program are used
to determine
subsidy eligibility, except for the following:
- Number in Subsidy Household - Although the assistance
planning rules of KEESM 4300 apply in the subsidy determination,
a new element is also
considered in the determination. Certain relatives
who live with the applicant/recipient are considered members
of the subsidy household.
For this purpose a relative is defined as any person
who is related by blood, marriage or adoption, who is living
with the applicant and spouse
and who is dependent on the applicant or spouse for
at least one half of his/her financial support. The subsidy
household size is used only
to determine the poverty level for the determination.
For example, a subsidy household size of 3, the 3 person
poverty level standard applies.
The income and resources belonging to members of the
subsidy household who are not included in the assistance
plan are exempt. Verification
of relationship is not required and they should not
be registered on the MS program.
Example: George and Martha, married Medicare beneficiaries, apply for
subsidy. They report their two grandchildren, Robert and Ulysses, live
with them. Because they are married and living together, George and Martha
are the only members of the assistance plan and their income and resources
are used in the determination. Because the grandchildren live with them,
the subsidy household size is 4. However, income and resources belonging
to Robert and Ulysses are not considered. The 4 person poverty level
standard is applicable in the determination.
Example: Polly is a 32-year old Medicare beneficiary applying for a
Medicare Savings Plan. Her income is $1500/ month. She is over the income
limit for Expanded LMB, so a subsidy determination is necessary. She
indicates on her application that her sister and two nieces were currently
living with her. She is the only one with income right now. For the subsidy
determination, the household size is 4. Polly is at 93% of FPL for the
Subsidy. She is eligible for Subsidy at Level D.
Note regarding the application forms - Although
the new ES-3100.8 has been designed to capture information
on other household members, persons
who apply using other application forms (e.g., the ES-3100.4
or the ES-3100) will not be asked to report this information.
Separate contact with the
individual will be needed to capture the information.
- SSA COLA Exception - The COLA exemption applicable
to the Medicare Savings Programs until the new poverty
levels are implemented [KEESM
6410 (52)] is not applicable to subsidy determinations.
- Processing Guidelines - There is no
prior eligibility for subsidy. Eligibility is determined
effective the first
day of the month of application.
Eligibility for the subsidy is determined regardless of Part D enrollment
status. If there is a delay in sending approval information to CMS, a
reimbursement may be due from the PDP or other carrier.
- For QMB Approvals - Because eligibility under the QMB
program is not effective until the month following the
month of processing, there
is a potential gap in subsidy coverage. Therefore, for any QMB approval,
a Subsidy application must be processed for each of the months beginning
in the month of application through the month in which QMB is approved.
These applications are the responsibility of SRS and are not referred
to SSA.
Example: Johnny applies for Medicaid on 04-29-2005. His application
is approved for QMB coverage on 06-03-06, so coverage is effective 07-01-2005.
A subsidy determination must be completed for 04/05, 05/05 and 06/05.
- Income/Resource Limits - There are five distinct levels
of Medicare Subsidy. Eligibility under each of the levels
is based on countable income
and resources.
Level D: Incomes at or below 135 % FPL and resources at or below $6,000
for a single or $9,000 for a couple.
Benefits: Coverage of the basic premium charge and the $250 annual
deductible. Copayments of $2.00 per preferred or generic prescription
and $5.00 for other covered prescriptions.
Level D1: Incomes at or below 135% FPL and resources at or below $10,000 for
a single or $20,000 for a couple.
Benefits: Coverage of the basic premium charge. A $50.00 annual deductible
is applicable and copayments of 15% per prescription up to the catastrophic
level. $2.00/$5.00 per prescription after the catastrophic level is reached.
Level D2: Incomes greater than 135% and at or below 140% FPL; resources
at or below $10,000 for a single or $20,000 for a couple.
Benefits: Coverage of 75% of the basic premium charge. A $50.00 annual
deductible is applicable and copayments of 15% per prescription up to
the catastrophic level. $2.00/$5.00 per prescription after the catastrophic
level is reached.
Level D3: Incomes greater than 140% and at or below 145% FPL; resources
at or below $10,000 for a single or $20,000 for a couple.
Benefits: Coverage of 50% of the basic premium charge. A $50.00 annual
deductible is applicable and copayments of 15% per prescription up to
the catastrophic level. $2.00/$5.00 per prescription after the catastrophic
level is reached.
Level D4: Incomes greater than 145% and below 150% FPL; resources at
or below $10,000 for a single or $20,000 for a couple.
Benefits: Coverage of 25% of the basic
premium charge. A $50.00 annual deductible is applicable
and copayments of 15% per prescription up to
the catastrophic level. $2.00/$5.00 per prescription after the catastrophic
level is reached.
- The MD PICK Code
A new special medical indicator, or PICK code, has been created to
use for subsidy only cases. The MD PICK code is mandatory on all subsidy-only
cases. The code is necessary for two reasons:
- The MMIS reads most MS records coming from KAECSES as spenddown
records unless there is another indicator on the case telling
the MMIS that other coverage exists. The CC override for LTC
cases, the LO and
QO medical program subtypes and other PICK codes are examples
of coverage indicators.
For a person seeking only subsidy, the MD PICK code will distinguish
the case as a subsidy only case from other MS cases and tell the MMIS
to provide only the subsidy benefit. Note that the full authorization
through the new SUDD screen also must be completed to authorize a subsidy
record, this is explained in Section IV (Automated System Changes) below.
However, for persons who are also seeking coverage under a Medically
Needy spenddown, the PICK code is not appropriate. Subsidy eligibility
is authorized through SUDD for these cases and using the PICK code will
prevent the spenddown from being read by the MMIS.
-
The PICK code will override the resource limit tied
to the MS program for a subsidy determination. For example,
a beneficiary with countable resources
of $5000 is not eligible for regular medical or an MSP, but is potentially
eligible for subsidy. Using the MD PICK code will allow authorization
of the subsidy benefit regardless of the resource limit.
Please be cautioned, there is no resource limit built into the subsidy
determination. The eligibility worker must pay careful attention to the
countable resources listed on the SUDD screen and limits tied to the
specific subsidy level.
- Denied Applications
As part of the MMA file transfer, information on all denied subsidy
applications is being captured and sent to the MMIS. CMS will retain
this information for coordination with Social Security subsidy applicants.
Therefore, it is extremely important that accurate denial codes are entered
on the SUDD screen (see Section IV below). CMS will allow reporting of
only certain codes, so the codes are limited by federal design. One of
the following must be entered on the new SUDD screen when an application
is denied:
- NM - Not enrolled in Medicare A or B. For use with beneficiaries
who apply for subsidy but are not entitled to Medicare D;
- US - Not residing in the United States,
currently incarcerated or deceased;
- CO - Failure to cooperate;
- XR - Excess Resources. Use if countable resources exceed
$10,000 for a single or $20,000 for a couple;
- XI - Excess Income. Use if countable income exceeds 150%
of the FPL;
- FR - Failed Review. Use if manually closing the program
or case for no review; and
- DM - Deemed Eligible. Use if the subsidy case is closing
because the person is now a deemed eligible (e.g., moving from
subsidy to QMB).
- Treatment of Medicare Part D Expenses For Other Medicaid Programs
Although Medicare Part D is considered comprehensive coverage, the
beneficiary will incur some out of pocket expenses that may be allowable
against a Medically Needy spenddown, patient liability or HCBS client
obligation. These expenses may also be considered when determining Impairment
Related Work Expense (IRWE) or Blind Work Expense (BWE) deductions.
- Premiums
Premiums which are not subject to reimbursement by the subsidy are allowable,
including the following:
- The basic premium charge incurred in months the individual
is not eligible for subsidy;
- Additional charges for enhanced plans above the basic plan covered
by the subsidy;
- Late enrollment fees added to the premium which are not subject
to reimbursement by the subsidy; and
- Premiums paid for creditable prescription drug coverage taken as
an alternative to Medicare Part D.
As with all health insurance premiums, for Medically Needy or SOBRA
spenddown cases these expenses are recorded on the KAECSES MEEX screen.
- Deductibles/Copayments
All cost sharing expenses which are not subject to reimbursement by
the subsidy are allowable, including applicable $1.00 - $5.00 copayment
charged for persons receiving the subsidy.
- For Medically Needy or SOBRA spenddown cases, providers
are encouraged to continue to bill these expenses through the
MMIS. However, pharmacy
billing practices may not permit direct bill of a copayment amount. In
these situations, the copayment is entered on a Beneficiary Billed Claim
Form by the eligibility worker. Expenses used toward the Medicare Part
D deductible are also allowable using the Beneficiary Billed process
if the claim may not be filed electronically.
- For long term care cases, the copayments are allowable
on the KAECSES MEEX screen. However, no deductible is applicable
in the first month
of Medicaid eligibility as the individual is deemed eligible for subsidy.
- Non-Covered Prescription Drugs
Prescription drugs which are not covered by the Part D or other prescription
drug plan are allowable.
- Drugs which are not on the plan’s formulary which
have been denied through an appeal. Proof of the denial from
the company as well
as proof of the appeal finding are required. The actual cost to the beneficiary
is allowable.
For Medically Needy or SOBRA Spenddown cases, the provider may electronically
bill these claims or they are allowed as Bene Billed claims. For LTC
situations, they are entered on the KAECSES MEEX screen.
- Expenses incurred prior to enrollment in a Part D plan
are allowable for persons entitled to Medicare Part D, even
though Medicaid will not
pay these expenses. Extreme caution is to be used before using these
expenses. The actual enrollment date into the plan must be verified prior
to considering the expenses. If the beneficiary fails to enroll in a
plan, the effective date through the auto enrollment process must be
considered. Documentation is required.
- Over-The-Counter Medication. Medicare Part D does not provide
coverage of over-the-counter drugs. Costs for these items are
potentially allowable
if medically necessary. Follow the medical necessity guidance in Appendix
Item P1 to determine medical necessity.
- Drugs purchased through an out of network pharmacy. The
MMA requires reimbursement to the dual eligible beneficiary
who utilizes an out of
network pharmacy. It is unknown how this process will work. Documentation
from the PDP is required prior to allowing expense in which the beneficiary
is claiming non-coverage due to out-of-network provider.
- Automated System Changes
To support both Medicare Part D coverage and the Medicare Part D subsidy,
several changes were made to both the KAECSES AE system and the MMIS.
- KAECSES Changes - The system changes described
below are effective Monday, January 9, 2006. With the exception
of the MEIN screen,
copies of the modified screens will be available in the training
material provided
to eligibility staff in November and December. A copy of the revised
MEIN screen is included in this material.
- PROGRAM - Medicare Part D Subsidy must be processed under
the MS program.
- MERE - Medicare Part D and SubdD fields have been added
to this screen. Information on this screen is necessary in
order to authorize
the subsidy benefit. Note the following rules:
- The Part D field is blank, but requires a ‘Y’ or ‘N’ entry
by the eligibility worker for the MS program.
- Medicare Part D Subsidy cannot be approved on the
new Subsidy D screen (SUDD) unless there is a ‘Y’ in
the Medicare Part D field.
- The value in the new SubD field defaults to ‘N’.
The ‘N’ should
be changed to a ‘Y’ when a consumer
is requesting a Medicare Part D Subsidy eligibility
determination.
- The MD special medical indicator cannot be enter
on PICK for an individual unless that person has
a ‘Y’ in
the SubdD field.
- MEIN - Minor screen layout changes were made to allow room
for new Medicare Part D entitlement and end date fields and
a new Part D Allow
Auto Update field.
- The MEIN Part D entitlement and end dates are not
enterable. Only the ‘Allow Auto Update’ field
is enterable.
- Part D entitlement and end dates will be calculated
by the system anytime a user enters initial Part A
or B entitlement and/or end dates on the MEIN
screen. The dates will also be recalculated
by the system anytime receipt of a BENDEX or WPTQY
record causes a change to either a Part A or B entitlement
or end date. Note: if the worker enters the
Part A and or B dates, they would
have to leave then return to the MEIN screen
to see the newly calculated Part D dates.
- Like the Part A and B Allow Auto Update field, the
Part D Allow Auto Update field will default to Y. The Y
can be changed to an N in
situations where it is determined automated processes can not correctly
determine the Part D entitlement or end dates.
- Since the Part D entitlement and end date field are
not enterable, any necessary change to either will require
SRS help desk participation.
- Unlike Part A and B, Part D information on MEIN does
not cause a Y to be entered in the Part D field on MERE.
- Unlike Part A and B, Part D information is not sent
to the MMIS from KAECSES. The MMIS will calculate Part
D entitlement dates based
on Part A and B entitlement information it receives from MEIN and from
CMS.
- A copy of a portion of the modified MEIN screen is
displayed below, with changes highlighted:
MEIN MEDICARE INFORMATION 110605 13:43
CASE NAME: BOND JAMES CASE NUMBER: 11111111 CHRIS
POA: 01 BID: 0000000001
NAME: BOND JAMES DOB: 02021900 SEX: M SSN: 000000011
------------------------------------------------------------------------------
NAME: BOND JAMES DOB: 02021900 SEX: M SOURCE: BEND
MEDICARE CLAIM #: 000000011A RAILROAD MEDICARE (PARTB)? N MEDICARE HMO: N
ENTITLEMENT START DT END DT COVERAGE IN EFFECT? Z99 DT ALLOW
PART A: 12011996 Y AUTO UPDATE
PART B: 12011996 Y Y
PART D: 01012006 Y
- MSID - Two changes have been made:
- Allows the MS program to be authorized if there are
excess resources when the ‘MD’ code is entered
in the Special Medical Indicator field on PICK.
- Added a new field, ‘Go to Subsidy D’ field?’ ‘N’ is
the default value for this field, but a worker can change to ‘Y’ to
access the Subsidy D (SUDD) screen.
- SUDD (Subsidy D Determination) - This new screen captures
Medicare Part D Subsidy entitlement. SUDD is a multiple part
screen.
- The top part calculates and displays the number in
the medical unit, household size, the household’s
net income, countable resources and federal poverty level
percent. The household size defaults to the
same number as the number in the medical unit, but can be changed by
the eligibility worker. After you change the household size number, push
enter so the system can recalculate and display the new federal poverty
level percent.
- The bottom two-thirds of SUDD is for Medicare Part
D Subsidy approval, change, denial or closure actions.
It functions much like the CHSE and
LOTC screens in that it requires entry of the POA (position on app) number(s)
before the rest of the fields open for entry or display existing data.
- The eligibility worker can enter any of the four action
types (AP for approval/changes; CL for closures; DE for
denials; and DL for deletes).
- Based on the Action type, other fields open on the
screen so required information can be entered by the eligibility
worker.
- Each action requires the eligibility worker to authorize
by entering their PIN. Once an action type is entered,
it will not display the next
time the screen is accessed.
- The Closure/Denial Date is protected and populated
by the system. Closure dates are the last day of a month
and denial dates are the calendar
day the denial action is taken. These dates do not display until the
worker leaves the screen and returns to SUDD.
- SUDD is a month specific screen and can also be accessed
by using the ‘Next’ function. Like other screens,
to next to SUDD, the system requires the case number, benefit
month and budgeting method.
- As with other programs, to close Subsidy D for an individual,
the MS program must be in the month after the effective
date of closure.
For example, to close Subsidy D effective 02/28/06, you must be in the
benefit month of 03/06.
- Medicare Part D Subsidy denials and closures will be
transmitted to the MMIS fiscal agent when SUDD is authorized.
Subsidy D approvals/changes
(types) are sent to the MMIS fiscal agent on the current daily and monthly
benefit files.
- The SUDD Help Screen lists the Action types, Subsidy
D types and Denial/Closure Reasons. Additional information
about the SUDD screen is in KAECSES Code
Card revision and KAECSES AE User Manual Volume I, Section 335D.
- SPEN - Additional edits have been added to this screen
so you cannot authorize an MS case that has a MD special medical
indicator unless there is an approved
Medicare Part D Subsidy type on SUDD.
- MEBH - The Medicare Part D Subsidy type will display on
MEBH for each entitled individual. You can send a changed Subsidy
D record to
MMIS by reworking MSID, SUDD and SPEN.
- Closures - Several rules exist for subsidy closures:
- When the system closes the MS program because of no
review, all open Medicare Part D Subsidy coverage will
also close.
- All subsidy records on the SUDD screen must be closed
before you can close the MS program. You will receive an
error message forcing you
to close these records on SUDD. You cannot close an MS case with open
Subsidy D coverage until you close the Subsidy D on SUDD.
- All unpaid Subsidy records for a month must be closed
or denied prior to changing a participation code on SEPA
for that month. The system
will not allow a Subsidy record to be altered for anyone unless they
are coded “IN” on SEPA. Remember to close/deny the unpaid
Subsidy record on SUDD before changing a participation code on SEPA.
- Subsidy eligibility prior to QMB. See item II.B.1.d.
above. A QMB eligible must have subsidy determined from
the month of application through
the month prior to QMB approval. The subsidy record must be closed for
the month prior to QMB. Following the subsidy approval, the following
steps provide may be followed to close the subsidy record:
- Roll your case into the first month of QMB eligibility
(month after the month of processing).
- Next to PICK and remove the ‘MD’ code
(if used).
- Next to MSID, put a “Y’ in the AUTHORIZE
QMB and GO to SUBSIDY D fields to go to SUDD.
- Enter your POA and press ENTER.
- Enter CL in the ACTION field and press ENTER.
- Enter DM code in the Reason field and press
ENTER to go to SPEN.
- Authorize on SPEN.
- Check MEBH to be sure no subsidy types
display in the first QMB month and any
future months.
If you go back into the SUDD screen, the
last day of the previous month will display
in the
Denial/Closure
Date field.
Your SUDD records are now closed
and QMB may be processed.
- Future System Changes for Medicare Part D and Subsidy occurring
after January’s implementation are as follows:
- Display Subsidy D indicator on CAP2 and Active Case Listing
(CR300/300A).
- Display MD code on Review Labels so staff can easily identify
Medicare Part D Subsidy only cases.
Further information to staff will be made available through SRSTSC
upon implementation of these changes.
- Notices - To support changes related to Medicare Part D, several
new notices are being created. Several existing notices are also being
changed to provide information about Medicare Part D and the subsidy
benefit.
Notices for Persons Deemed Eligible for the Subsidy - Current approval notices
will be updated to provide information on subsidy eligibility as part of the
Medicaid approval. Proposed language is included in the attachment. Separate
notices are being written for Medical Savings Plan/Subsidy determinations.
Notices for Determined Subsidy Eligibles - Approval, denial, closure
and review notices are being developed for subsidy determinations.
SRSTSC will provide information on availability of individual notices.
- MMIS Changes - Several changes are also being
made to the MMIS. The fiscal agent, EDS, will provide additional
information on these
changes prior to
implementation. Please note the following:
- A new window will capture Part D entitlement information.
This will not be displayed on the Medicare Coverage window.
- Part D entitlement on the MMIS is DETERMINED from the Part
A and Part B effective dates sent from MEIN. As indicated earlier,
the Part
D MEIN date is not sent to the MMIS. The logic used to determine the
Part D entitlement date in both systems is the same. However, if an entitlement
date must be changed in the MMIS, this is caused by changing the A or
B dates on MEIN.
- The Part D entitlement date will drive claims edits to
stop payment of pharmacy claims.
- PDP information, sent from CMS on the MMA Response file,
will be available for display in the MMIS. This will provide
current information
on the beneficiary’s current PDP or MA PDP assignment.
- Subsidy eligibility information will be displayed on the
MMIS in a new window. It will not be displayed on the general
eligibility windows.
- Conclusion
The implementation of Medicare Part D has proven to be a multi step
process, with more information yet to come. Several items have been noted
in this memo for additional informational releases in the future. In
addition to those targeted, a separate implementation memo for the new
Medicare Savings Plan/Medicare Part D Subsidy application, the ES-3100.8,
and the Review Extension are in development. Policies are still being
developed for the relationship of Medicare D with other medical benefits,
such as the AIDS Drug Assistance Program. Once these decisions are made,
information critical to field operations will be shared with you and
your staff.
The hard work and dedication to our Medicaid beneficiaries is much
appreciated. Any questions about system issues may be addressed to SRSTSC.
Other questions about the information may be directed to Jeanine Schieferecke
(jzs@srskansas.org) or (785) 296-8866.
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