Update on Medicare: MIPPA 2008 and Situ v. Leavitt

1. Update on Medicare: MIPPA 2008 and Situ v. Leavitt Presented August 2008 by David Lipschutz & Elaine Wong Eakin This special regional educational effort is supported by funding provided by The California Endowment. California Health Advocates (c) 2008

2. Our Focus California Health Advocates is dedicated to Medicare beneficiary advocacy and education for Californians. www.cahealthadvocates.org • Policy – Public policy research and recommendations for improved rights and protections, partner with national Medicare organizations based in Washington D.C. • Training – Professionals and informal helpers, vibrant web resources, newsletter and regional forums • Advocacy – Bring the experience of Medicare beneficiaries to the public through media and educational campaigns with the legislative staff at federal and state levels. California Health Advocates (c) 2008

3. Overview • Medicare Improvements for Patients and Providers Act (MIPPA) of 2008 • Situ v. Leavitt lawsuit • Center for Medicare Advocacy (CMA) and National Senior Citizens Law Center (NSCLC) California Health Advocates (c) 2008

4. History of Medicare Bills 2008 • The “Medicare Improvements for Patients and Providers Act” (S 3101) introduced on June 6, 2008 by Sen. Baucus failed to receive enough votes for cloture • The “Preserving Access to Medicare Act” (S 3118), rival bill introduced by Sen. Grassley on June 11, 2008, failed to receive consideration • The “Medicare Improvements for Patients and Providers Act” (HR 6331) passed by Congress on July 15 after both chambers voted to override President Bush’s veto California Health Advocates (c) 2008

5. Highlights of MIPPA – Medicare Part B • Physician fees— Delayed 10.6% cut in reimbursement to doctors retroactive to July 1, 2008 (18 month delay). Effective January 1, 2009, 1.1% rate increase • Extends exceptions process for outpatient therapy caps (e.g. physical, speech, occupational) to December 31, 2009; retroactive to July 1, 2008 • Mental health parity—Decreases beneficiary’s coinsurance for outpatient mental health services from 50% to 20% over 6 years California Health Advocates (c) 2008

6. Highlights of MIPPA – Medicare Part B (contd.) • Payment incentives for providers to use electronic prescribing, 2009-2013 • “Welcome to Medicare physical exam”—Extended from 6 months to 1 year, deductible waived, effective January 1, 2009 • Eases addition of coverage for new preventive services through Medicare California Health Advocates (c) 2008

7. Highlights of MIPPA – Medicare Advantage Plans • Phase out of Indirect Medical Education (IME) payments • Teaching hospitals will still be reimbursed by Medicare, but IME payments removed from payment to MA plans • This is the only “cut” or adjustment to Medicare Advantage payment rates in this bill • Adjustment to Medicare Advantage stabilization fund • Fund created by Medicare Modernization Act to entice Regional PPOs to enter Medicare market; incentive not needed – fund reduced to $1 in 2012 California Health Advocates (c) 2008

8. Highlights of MIPPA – MA Plans - SNPs • Special Needs Plans (SNP) • Extends authority for SNPs through 2010 • Extends moratorium on offering of new SNPs • Care management • Model of care with networks of providers • Periodic assessment of individual and plan of care • Dual eligibles and QMBs in SNP should not have to pay more copayments than if they were not in the SNP (starts 2010) California Health Advocates (c) 2008

9. Highlights of MIPPA – MA Plans – SNPs (contd.) • Restrictions on Enrollment (as of Jan 1, 2010) • Dual Eligible-SNPs • Each new enrollee must meet definition of special needs. • Each prospective enrollee must be given a written statement describing the benefits and cost-sharing under the state Medicaid program, and which of such benefits and cost-sharing are covered by the plan, and • The plan has a contract or arrangement with the state Medicaid agency to provide Medicaid benefits. California Health Advocates (c) 2008

10. Highlights of MIPPA – MA Plans – SNPs (contd.) • Restrictions on Enrollment (as of Jan 1, 2010) • Institutional SNPs • Each new enrollee must meet definition of special needs. • If in community but requires institutional level of care, such determination must be made using a state assessment tool and by entity other than SNP. • Chronic SNPs • Each new enrollee must meet definition of special needs. California Health Advocates (c) 2008

11. Highlights of MIPPA – MA PFFS Plans • PFFS plans required to enter into contracts with providers in most areas in order to meet access standards, starting plan year 2011. • Applies to counties with 2 or more non-PFFS plans (HMO or PPO) • PFFS and MSA—Required to report data and have quality improvement programs, like other MA plans, starting 2010. California Health Advocates (c) 2008

12. Highlights of MIPPA – Medicare Part D • Prompt payment to pharmacies—PDP and MA-PD sponsors required to pay clean claims to retail pharmacies within • 14 days if submitted electronically • Otherwise 30 days • Benzodiazepines and barbiturates—Inclusion under Part D coverage for treatment of epilepsy, cancer or chronic mental health disorder effective Jan 1, 2013. California Health Advocates (c) 2008

13. Highlights of MIPPA – Marketing of MA and PD Plans • Prohibited activities (effective 2009 plan year) • Unsolicited means of direct contract • Including door-to-door, outbound telemarketing • Cross selling • Sale of non-health related products during sales and marketing of MA products • Providing meals • Selling and marketing at health care settings and educational events • Health care setting = areas where health care is delivered (except for common areas) California Health Advocates (c) 2008

14. Highlights of MIPPA – Marketing (contd.) • Limitations (effective by Nov 15, 2008, beginning of AEP) • Scope of marketing appointment • Requires advance agreement and documentation • Co-branding • Prohibits use of name or logo or a co-branded network provider on MA membership and marketing materials • Gifts of nominal value • Compensation to agents and brokers • Must follow CMS guidelines • Training and testing of agents, brokers and others • Initial and annual testing and training California Health Advocates (c) 2008

15. Highlights of MIPPA – Marketing (cont.) • MA and Part D plans must include plan type in plan name as of 2010 plan year • E.g. “Acme HMO” • Strengthening collaboration with states (effective 2009 plan year) • Plans must use only licensed agents, abide by appointment laws, report agent terminations and comply with state requests for information re: agent, broker, or other representative’s performance California Health Advocates (c) 2008

16. Highlights of MIPPA – Low Income Programs • Qualifying Individual (QI) program extended to December 31, 2009; retroactive to July 1, 2008. • QI covers Part B premiums • Increase asset level for Medicare Savings Program (MSP) eligibility to asset level for Part D Low-Income Subsidy (LIS) eligibility, effective January 1, 2010. California Health Advocates (c) 2008

17. Highlights of MIPPA – Low Income Programs (cont.) • Income and resources for LIS eligibility—Excludes in-kind support and value of life insurance policy, effective Jan 1, 2010. • Late Enrollment Penalty (LEP) waiver—Part D late enrollment penalty waived for LIS-eligible beneficiaries, effective January 2009. • Current CMS policy is being codified California Health Advocates (c) 2008

18. Highlights of MIPPA – Miscellaneous • DME competitive bidding program (DMEPOS) delayed for 18 months • Was set to be effective in several areas (including Riverside, San Bernardino) as of July 1, 2008 • Medigap • Dept of Health and Human Services must work with states to establish new requirements for Medigap plans • Includes elimination of redundant plans, modification of benefit structure, and 2 new types of plans that alter cost-sharing structure California Health Advocates (c) 2008

19. What’s the next round? • Celebrate the victory, but continue to work on longer term solutions. • Scheduled cuts to physician reimbursement – revise/repeal sustainable growth rate (SGR). • Medicare hospital trust fund may be insolvent by 2019. • Health care reform California Health Advocates (c) 2008

20. Situ v. Leavitt • Class action lawsuit preliminarily approved by federal district court • Data transfers from states more than once a month. CMS must process data received within 1 business day. • Plans must accept best available evidence (BAE) of LIS eligibility presented by beneficiary and update the system within 72 hours. • CMS to conduct outreach and educate pharmacists about changes to point-of-sale (PoS), that pharmacists are no longer financially liable. California Health Advocates (c) 2008

21. Contact Information • California Health Advocates • Sacramento HQ – (916) 231-5110 5380 Elvas Avenue, Suite 104 Sacramento, CA 95819 • Oakland satellite office – (510) 268-8030 464 7th Street, Oakland, CA 94607 • Website:www.cahealthadvocates.org California Health Advocates (c) 2008