CMS BASICS

1. CMS BASICS Shamiram Feinglass, MD, MPH Senior Medical Officer Coverage & Analysis Group CMS Emory GPM October 4, 2007

2. Sources For This Presentation • The Henry J. Kaiser Foundation www.kff.org • Staff at CMS

3. CMS Basics • Medicaid • Medicare • Coverage policy discussions

4. Dates to Know • Federal program • 1965: Created; immediate outcry • 1972: Expanded; permanent disabilities • 1977: HCFA • 2001: CMS • 2003: MMA; immediate outcry • 2006: Part D

5. Medicaid: 55 Million • “Categorically eligible” • Children • parents of dependent children • pregnant women • people with disabilities • elderly

6. Medicaid: 55 Million • Low-income, majority are children • 27 million children • 14 million adults • 6 million seniors • 8 million disabled

7. Medicaid:Is It More Flexible? • Jointly funded with states • Federal contribution varies by state: 50%-76% • States may expand income eligibility beyond federal minimums (demos) • Need federal waiver for matching funds to cover childless adults • Federal financing is 57% of all spending

8. Medicaid • Almost 1/2 of all nursing home care spending • 1/4 of all enrollees (elderly, disabilities) account for 70% of all spending • Intensive, acute/ long term care services utilized • Almost 10x more for this group

9. Medicaid Minimums • Inpatient and outpatient hospital services • Physician, midwife, and certified nurse practitioner services • Laboratory and x-ray services • Nursing home and home health care for individuals age 21+

10. Medicaid Minimums • Early and periodic screening, diagnosis, and treatment (EPSDT) for children under age 21 • Family planning services and supplies • Rural health clinic/federally qualified health center services

11. 2005 Deficit Reduction Act (DRA) • Previously required to offer the same Medicaid services • May limit benefits to some groups and expand benefits to other groups • Expands states’ discretion to use premiums and cost-sharing in Medicaid

12. Disproportionate Share Hospitals (DSH) • Teaching hospitals, DSH designees, serve more indigent • Federal funds match the state supplemental payments

13. “Dual Eligibles” • Low income Medicare beneficiaries • Rely on Medicaid to pay Medicare premiums and cost-sharing • Covers critical benefits that Medicare does not cover (long-term care) • Spend down and divorce example

14. Medicare: The Big Money • About 43 million people • About $374 billion • About 14% of the federal budget • Pays for residents at training hospitals • Prevention if mandated

15. Medicare: The Specifics • 65 • Permanently Disabled (SSDI), ESRD, Lou Gerhig’s • Must be eligible for Social Security payments • Made a payroll tax contribution for at least 10 years

16. Medicare: Gaps • Dental • Vision • Long-term Care

17. Medicare: The Parts • Part A: Inpatient • Part B: Outpatient, physician • Part C: Medicare Advantage, HMO • Part D: Drug

18. Medicare: Part A • Inpatient hospital • Skilled nursing facility • Home health • Hospice • 41% of benefit spending • Dedicated tax of 2.9% by employers and workers

19. Medicare: Part B • Physician services • Outpatient • Home health • Preventive services (congressional) • General revenues and beneficiary premiums • 34% of benefit spending

20. Medicare: Part B • Monthly premium, about $100 • In 2007, income adjustment for those making above $80,000

21. Medicare: Part C • Medicare Advantage • Private managed care plan • Combined coverage of Part A, Part B, and usually Part D • 14% of benefit spending

22. Medicare: Part D • Prescription drug benefit • Delivered via private plans contracting with CMS (PDPs and MA-PDPs) • Paid to provide the standard drug benefit, or one actuarially equivalent • Some assistance for low-income

23. Medicare: Part D • Funded by general revenues, beneficiary premiums, state payments • 8% of benefit spending • Monthly premium, average is $27

24. Medicare: Part D Doughnut Hole • $3850 out of pocket expenses • $265 deductable • From $265-$2400 25% beneficiary co-pay, plan is 75% • From $2401-$5450 Coverage Gap • From $5451 on, 5% co-pay for beneficiary, 15% by plan, 80% by CMS

25. Standard Medicare Prescription Drug Benefit, 2007 Enrollee Pays5% Plan Pays 95% $5,451 in Total Rx Costs Enrollee Pays 100% $3,051 Coverage Gap $2,400 in Total Rx Costs Enrollee Pays 25% Plan Pays 75% $265 Deductible $328 Average Annual Premium Kaiser Family Foundation, 2006Figure available for download at www.kff.org/charts/111306.htm.

26. Medicare: Cost Sharing • Covers less than 45% of beneficiaries’ total costs • Deductables • Part A $952 • Part B $124 • Part D $265 • No cap, unlike most employer-sponsored plans

27. CMS Stressors • Aging population, long-term care needs • Smaller workforce paying in • Medical care is expensive • Medicare never intended to pay full costs • Part A trust fund reserves projected to be exhausted in 2018

28. Medicare Impacts • Examples

29. Medicare Coverage Process • Brief description of coverage process • This is NOT payment

30. Quality Evidence Enhances Policy • More specialties • More insurers • More manufacturers • More government agencies

31. Using EBM • If something doesn’t work, we should not spend money on it, even if it is not harmful • Concentrate resources on things that improve health • Physicians and patients can make informed choices about treatment • Allows open, explicit, consistent coverage decisions

32. NCD Authority • Social Security Act 1871(a)(2): No rule, requirement, or other statement of policy (other than a national coverage determination) that establishes or changes a substantive legal standard governing the scope of benefits, the payment for services, or the eligibility of individuals, entities, or organizations to furnish or receive services or benefits under this title shall take effect unless it is promulgated by the Secretary by regulation

33. CMS’s Legal Authority for Coverage • SSA Section 1862(a)(1)(A) • No reimbursement for item or service, “which, except for items and services described in a succeeding subparagraph, are not reasonable and necessary for the diagnosis and treatment of illness or injury or to improve the function of a malformed body member”

34. Reasonable and Necessary • Sufficient level of confidence that evidence is adequate to conclude that the item or service: • Improves net health outcomes • Generalizable to the Medicare population • Generalizable to general provider community

35. Most Coverage is Local National 10% Local National Local 90%

36. National Decisions • National Coverage • National Noncoverage • National Coverage with restrictions • Specific populations • Specific providers/facilities • Evidence development

37. What Prompts an NCD • External request • Current national non-coverage policy • Substantial LCD variation • Internally generated • Extensive literature or important new study • Technological advance with potential major clinical or economic impact • Concerns about major inappropriate use

38. MEDICARE NATIONAL COVERAGE PROCESS Reconsideration Preliminary Discussions Benefit Category 6 months 30 days 60 days Final Decision Memorandum and Implementation Instructions National Coverage Request Internal Technology Assessment Draft Decision Memorandum Posted Public Comments External Technology Assessment Staff Review Department Appeals Board Medicare Coverage Advisory Committee 9 months

39. Medicare Data Sources • Available to researchers • Many questions, not enough workforce • ResDAC is paid to provide you data help • http://www.resdac.umn.edu/aboutus/resdac_services.asp#free

40. ResDAC Provides • History of the Medicare and Medicaid systems as they relate to research • Creation of CMS' administrative data files and claims processing • Strengths, weaknesses, and applications of Medicare and Medicaid data

41. ResDAC Provides • Methods of cohort identification and file specification • Conversion of raw data into usable datasets • Medicare and Medicaid program policies and coverage issues • Process of requesting data from CMS • Use of the Decision Support Access Facility (DSAF) and the Data Extraction System (DESY) using the CMS Data Center

42. Resources • www.cms.gov/coverage • http://www.kff.org/medicare/rxdrugbenefit.cfm • http://www.kff.org/medicare/upload/1066-10.pdf • http://en.wikipedia.org/wiki/Roth_IRA

43. Contact Information Shamiram Feinglass, MD, MPH Shamiram.Feinglass@cms.hhs.gov 410/786-9262