Medicare Watch
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Welcome to MEDICARE WATCH, a biweekly electronic newsletter of the Medicare Rights Center
Vol. 11 , No. 16 : August 19, 2008
Contents:1. FAST FACT
2. GAO FINDS MEDICARE PREMIUM WITHHOLDINGS PROBLEMATIC
3. MEDICARE PART D PREMIUMS TO INCREASE IN 2009
4. MEDICARE PAY FOR PERFORMANCE PILOT GENERATES SAVINGS AND IMPROVES QUALITY OF CARE
5. CASE FLASH: DISENROLLING FROM A MEDICARE PRIVATE HEALTH PLAN DURING “12-MONTH TRIAL”
1. FAST FACT
The 2008 National Scorecard on U.S. Health System Performance revealed that 18 percent of all people with Medicare were readmitted to the hospital within 30 days of being discharged due to complications such as hospital-acquired infections. In a recent op-ed in the Boston Globe, the authors of the report said reducing these avoidable hospital readmissions could save Medicare $12 billion annually and significantly improve quality of care. (Why Not the Best? Results from the National Scorecard on U.S. Health System Performance, 2008, The Commonwealth Fund, July 2008)
2. GAO FINDS MEDICARE PREMIUM WITHHOLDINGS PROBLEMATIC
While the Social Security Administration (SSA) has been withholding Medicare Part B premiums from Social Security payments since 1965, withholding premiums for the Parts C and D—the Medicare private health plan (also known as “Medicare Advantage” [MA]) and Prescription Drug Plans (PDP)—has proven difficult. In 2006, the SSA added a premium withholding option for MA and PDP premiums, but since its inception there have been numerous reports of people with Medicare not having the correct amounts withheld and properly paid to the private plans that administer their Medicare benefits.
A recent Government Accountability Office (GAO) report revealed that about 231,000 people with Medicare incorrectly received premium refunds because they were erroneously identified as having paid excess premiums. The withholding process for Part B premiums is straightforward, as it comes from a single entity and is based on a standard amount; the process for withholding premiums for MA and PDPs, however, is much more complex.
There are nearly 800 different MA and PDP policies with more than 6,000 different benefit packages. To initiate premium withholding from monthly Social Security payments, the person enrolled in the plan must request it. Once the request is made, the SSA, Centers for Medicare and Medicaid Services (CMS), and the MA or PDP plan must ensure that all their records match. This sharing of information, commonly referred to as data exchange, can be problematic, resulting in premiums not being withheld or incorrect amounts being withheld. The GAO found that CMS and SSA have improved their collaboration on deductions since 2006, but SSA still rejects about 5 percent of CMS’s premium withholding requests because of errors in data exchange. In 2006, the Social Security Administration rejected 44.5 percent of Medicare's requests for premium deductions, according to the report.
To make MA and PDP premium withholding a more reliable payment option, the GAO provided CMS, SSA and the Treasury Department a number of recommendations. These recommendations include exploring ways of expediting the request and considering methods to avoid double-billing.
3. MEDICARE PART D PREMIUMS TO INCREASE IN 2009
Based on bids submitted by Medicare prescription drug plans to the Centers for Medicare and Medicaid Services (CMS), monthly premiums are expected to increase to roughly $28 for basic coverage, about $3 more than the average 2008 costs. This is about 37 percent lower than originally projected when the benefit was established in 2003.
CMS attributes the roughly 12 percent increase in premiums to the high cost of prescription drugs. Average monthly premiums have increased to mirror the continuous drug price hikes and introductions of new drugs with higher price tags. According to CMS, other factors also contributed to the higher premium costs, including increased estimates for catastrophic coverage. Advocates for people with Medicare attribute these soaring drug prices to the government’s failure to negotiate discounts directly with drug companies.
People with Medicare have access to prescription drug coverage only through private insurance companies. They can choose to receive the benefit through stand-alone Prescription Drug Plans (PDPs) or through Medicare Advantage Prescription Drug Plans (MAPDs), which offer health care coverage and a drug plan through private insurers. The average MAPD premiums for the drug benefit are lower than PDP premiums, though people with an MAPD plan often pay a separate premium for non-drug related benefits. The $28 average is based on both types of plans, with the monthly premium for PDPs projected to rise from $27 to $31, and for MAPDs to increase from $18 to $21.
Individuals receiving the Medicare prescription drug low-income subsidy (Extra Help) who are eligible for full premium subsidies are randomly assigned to a Part D plan that has a premium at or below the premium subsidy amount. In 2009, the premium for some of these LIS plans may increase to above the premium subsidy limit, in which case the individual with LIS may be reassigned to a new plan. These random reassignments can result in people losing coverage for the drugs they take, which could disrupt their care. However, everyone enrolled in an MAPD or a PDP can request an exception to have a medically necessary drug covered by their plan.
4. MEDICARE PAY FOR PERFORMANCE PILOT GENERATES SAVINGS AND IMPROVES QUALITY OF CARE
Medicare’s first pay-for-performance initiative—the Physician Group Program—improved both the quality and efficiency of care provided by doctors who participated in the program. The pilot program, which began in 2005, paid doctors incentive payments to coordinate the medical care for patients with Medicare.
The Centers for Medicare and Medicaid Services (CMS) selected 10 physician groups, representing 5,000 doctors who care for 224,000 people with Medicare, to redesign health care management models and encourage collaboration among practices and network organizations. Multi-specialty physician groups, where clinical and information management systems already existed, were encouraged to apply to be among these pilot sites.
Doctors received increased payments for improved quality of care for patients with congestive heart failure, coronary artery disease, and diabetes. Through the demonstration, doctors could earn up to 80 percent of the savings they generated through coordinated care. In total, doctors received $16.7 million in incentive payments in the second year of the demonstration. Quality and savings measurement results show that four of the ten doctor groups reduced the cost of care by $17.4 million in the second year of the demonstration.
In addition to improved care, these savings came from care coordination, which helped doctors provide the right care at the right time. These strategies were designed to anticipate patient needs, prevent chronic disease complications, and avoid hospitalizations.
This demonstration program allowed doctors to have flexibility in the care of their patients. One doctor group created a comprehensive patient registry that tracked a patient’s information, identified gaps in care, and ensured that quality care was provided in a timely manner. Additionally, it produced a visit planner for patients to track needed tests and treatments. Using this planner allowed doctors to schedule phone calls or reminder letters to be mailed to patients. According to the doctors involved, these visit planners improved the quality of care for the patients. Other participating practices used different strategies, such as electronic health records.
5. CASE FLASH: DISENROLLING FROM A MEDICARE PRIVATE HEALTH PLAN DURING “12-MONTH TRIAL”
Mr. S was enrolled in Original Medicare Parts A and B. In the two years since he turned 65, he had purchased a Medigap plan (Medicare supplemental insurance) and a stand-alone Medicare prescription drug plan (a PDP) to fill in the gaps in Original Medicare coverage. In March, Mr. S saw advertisements for a Medicare private health plan with prescription drug coverage that seemed to offer all of the coverage that he was currently receiving from Original Medicare, his Medigap and PDP plans—but all in one package—and with lower overall costs. So Mr. S enrolled in the private health plan and dropped the Medigap and the PDP.
When Mr. S tried to see his primary care physician with his new insurance, he discovered that the doctor was not in the plan’s network. Mr. S then had to see a different physician in order to have the plan pay for the appointment. (Most Medicare private health plans, like HMOs, require that you go to doctors, hospitals and pharmacies who have agreed to work with them--are in their “network”--in order to get coverage at all.) Later, when Mr. S went to the pharmacy to pick up his blood pressure medication, he discovered that he had to get permission from the plan (“prior authorization”) before the prescription would be covered. Mr. S had to ask his new doctor to write a letter to the plan explaining why the medication was medically necessary.
The more time he spent in the Medicare private health plan, the more Mr. S realized that he should have researched the plan more thoroughly before joining to make sure that he could get the care he needed from the people he was used to seeing. This particular private health plan did not fit his needs, and ended up costing him more time and frustration than it was worth.
In August, Mr. S called the Medicare Rights Center and asked a hotline counselor when he could change his Medicare private health plan. The counselor explained that you can usually change how you receive Medicare coverage only between November 15 and March 30 of every year. However, in some circumstances you qualify for a Special Enrollment Period (SEP) and are permitted to change your plan outside of those standard enrollment periods. Because Mr. S had dropped his Medigap policy to enroll in a Medicare private health plan with prescription drug coverage for the first time, and because he was still within his first 12 months with the plan, he qualified for an SEP and could change his coverage. Additionally, if Mr. S disenrolled from his private health plan during that 12-month “trial period” he would be able to get his Medigap policy back as long as the company still sold it (if not, he would be able to choose from, at minimum, Medigap plans A, B, C or F).
With the counselor’s encouragement, Mr. S called 1-800-MEDICARE and used his SEP to disenroll from the Medicare private health plan and go back to Original Medicare with the same PDP and Medigap that he had before. The change will go into effect on September 1, and Mr. S will again be able to see his long-time physician and get his blood pressure medication without first having to ask for permission.
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MRC’s new Medicare Part D Appeals: An advocate’s manual to navigating the Medicare private drug plan appeals process offers an easy-to-understand, comprehensive overview of the entire appeals process, including real-life case examples, a glossary of important appeals terms, a sample protocol for advocates, and links to important resources.
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Medicare Part D Monitoring Project
The Medicare Rights Center (MRC) would like to hear about your experience, or that of someone you know, enrolled in a Medicare private drug plan. With information about what the issues are with Medicare Part D, we will be able to demand that those problems be fixed.
Submit your story at http://www.medicarerights.org/partdstories.html.
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The Medicare Rights Center (MRC) is the largest independent source of Medicare information and assistance in the United States. Founded in 1989, MRC helps older adults and people with disabilities get good, affordable health care.
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