How is the New Medicare Drug Benefit Working for You?
January 9, 2006
The new Medicare drug benefit went into effect on January 1. During the initial days of this benefit, NAMI is hearing both positive and negative stories from across the country about the initial transition period to the new benefit -- especially among low-income individuals with severe mental illness who are "dually eligible" for both Medicare and Medicaid. While some "dual eligibles are getting their prescriptions consistent with the new law -- uninterrupted refills at only $1 for a generic medication and $3 for brand name medication, others have experienced severe problems at the pharmacy counter. These problems include:
- No electronic record of enrollment in a Medicare drug plan;
- Pharmacies charging cost sharing above $1 for a generic drug/$3 for a brand name drug;
- Attempts to impose deductibles;
- Prescriptions being denied because of exclusion from a plan's formulary; and
- Prescriptions being denied because of "prior authorization" and "step therapy" requirements.
In most cases, these problems are the result of Medicare prescription drug plans and pharmacies NOT abiding by the rules set forth by the Centers for Medicare and Medicaid Services (CMS), the federal agency that administers Medicare. NAMI is working aggressively to address these problems. As part of this effort, the NAMI National staff is compiling specific cases of problems being experienced by dual eligible beneficiaries with mental illness in order to press CMS to correct problems encountered during this initial transition period.
Please Let NAMI Know About Your Experiences With Medicare Part D
If you (or a family member) have personal experience with the new Medicare drug benefit (positive or negative) -- particularly as with specific pharmacies and Medicare drug plans -- please let us know. NAMI will protect the confidentiality of all submissions, although the name(s) of the denied medication, Medicare drug plan, and pharmacy involved will be important (i.e., the name of the dual eligible beneficiary is not needed). You can contact the NAMI National staff with your personal experiences under Medicare Part D at: firstname.lastname@example.org or call toll-free 1-888/999-6264 ext. 1228.
A Few Tips and Reminders at the Pharmacy Counter
- There should be no gap in coverage for individuals who are dually eligible for both Medicare and Medicaid (see details below);
- Make sure to bring any enrollment information you have been sent by Medicare to your local pharmacy when filling a prescription after January 1 (if you have not been sent enrollment information, bring your Medicare enrollment number with you);
- Retail pharmacists are required to have computer software that can instantaneously verify eligibility and plan enrollment;
- A Medicare beneficiary can enroll in a drug plan up through December 31 and have their enrollment be effective on January 1;
- Even though the benefit begins on January 1, the "open enrollment" period runs through May 15, 2006 (allowing Medicare beneficiaries to enroll in a plan with no penalty);
- Help with enrollment and plan selection is available 24-7 through 1/800-MEDICARE and www.medicare.gov
Transition for Dual Eligibles
Of particular concern to NAMI are the 6.3 million Medicare beneficiaries who are also eligible for Medicaid – the so-called dual eligibles. For these individuals (as many 1/3 of whom have a mental illness), participation in the new Medicare drug benefit is mandatory and coverage of prescriptions under their state Medicaid programs ended as of midnight December 31.
To ensure seamless coverage, dual eligibles have been automatically enrolled in a new Medicare drug plan and that plan must offer immediate coverage. Most dual eligibles received an auto-enrollment notice from Medicare in November. Dual eligibles are strongly encouraged to hold on to this letter and bring it with them to their pharmacist starting January 1. However, even without the letter from Medicare, all retail pharmacists are supposed to be able to instantly verify plan enrollment (typically, with a Social Security number or Medicare enrollment number). In other words, while the enrollment letter or enrollment card can be helpful, what really matters is electronic verification at the pharmacy counter. This verification is not just of the individual's enrollment, but also their status as a dual eligible beneficiary.
Obligations of the Medicare Drug Plans Serving Dual Eligibles
The Medicare drug plans that dual eligibles have been enrolled in are required to meet the following standards:
- They must offer drug coverage to dual eligibles at no monthly premium, no annual deducible, and no gap in coverage;
- They can NOT impose cost sharing on dual eligibles that exceeds $1 for a generic drug, or $3 for a brand name drug (cost sharing is waived for dual eligibles in nursing homes, Institutes of Mental Disease (IMDs), public psychiatric hospitals, etc.);
- They must cover all the drugs prescribed for a dual eligible prior to January 1 (i.e., if a dual eligible was prescribed a medication prior to January 1, it must be immediately covered);
- They must cover "all or substantially all" of the medications commonly prescribed to treat mental illness, including "all or substantially all" anti-psychotics, antidepressants; and anticonvulsants;
- They can NOT cover medications known as benzodiazepines (e.g., klonopin, ativan, xanax), although nearly every state Medicaid program has elected to cover these medications for dual eligibles;
- They must allow a dual eligible to switch to a different drug plan at any time (so long as the plan is at, or below, the average "benchmark" plan in the region; and
- They must respond quickly (usually within 72 hours) to a request from a beneficiary and their doctor for an exception to any restriction in their coverage (e.g., to cover a medication that is not on the plan's preferred drug list or to waive a prior authorization requirement).
FAQs on the transition for dual eligible beneficiaries
What happens to dual eligibles that were not auto-enrolled (or were not notified of auto-enrollment) prior to January 1?
No government program has ever transitioned 6.3 million people without a mistake and the new Medicare drug program is unlikely to be an exception. Some dual eligibles have not been auto-enrolled (due to the discrepancies between state and federal lists) or have not received enrollment notices (inaccurate mailing addresses, clerical errors, etc.). To deal with such cases, the Centers for Medicare and Medicaid Services (CMS – the federal agency that administers Medicare) has set up a "Point of Sale" system that will allow a dual eligible to immediately get their prescriptions filled and initiate immediate auto-enrollment.
How does the "Point of Sale" System Operate?
A dual eligible must present proof of eligibility in both programs. This can be their Medicare enrollment number and any proof that they are Medicaid eligible (Medicaid card, letter from Social Security declaring SSI eligibility, even asking the pharmacist to check on the computer to see that Medicaid paid for a prescription prior to January 1). Once the beneficiary demonstrates proof of eligibility for both programs, the pharmacy is required to fill the prescription and charge only $1 for a generic drug and $3 for a brand name drug. The pharmacist is also required to initiate enrollment by alerting a national vendor, who will verify the individual's dual eligibility status and auto-enroll them in a national plan. All of this is designed to take place at the pharmacy counter so that the dual eligible is able to get the prescriptions filled immediately and ensure rapid enrollment in a Medicare drug plan.
Are pharmacies required to collect the $1/$3 cost sharing from dual eligible beneficiaries?
Sort of. The law appears to require that dual eligibles meet their cost sharing obligations ($1 for a generic drug, $3 for a brand name drug). However, the regulations specifically mention that a retail pharmacist can, at their discretion, waive cost sharing for a dual eligible. However, a retail pharmacist cannot establish a blanket policy to waive cost sharing for all dual eligibles, nor can they advertise their willingness to forgo cost sharing for dual eligibles. As a result, some pharmacies may be reluctant to waive cost sharing. At the same time, nothing prevents a pharmacist from allowing a third party – including a family member or friend from making co-payments on the dual eligible's behalf.
Are all pharmacies participating in the new Medicare drug benefit?
Yes. However, not every pharmacy – whether a chain drug store or an independent retailer – is part of every drug plan's pharmacy network. The law requires every Medicare drug plan to have an adequate pharmacy network – based on geographic proximity to plan enrollees (including dual eligibles). Drug plans are also required to disclose to enrollees the pharmacies that are in their network. Dual eligibles can switch drug plans at any time if they wish to move to a plan that includes a specific pharmacy.
Will Medicare beneficiaries who reside in IMDs, group homes, supportive housing programs, or other congregate settings that offer on-site pharmacies (or have agreements with a pharmacy) be able to continue to get their medications as before?
In some cases, yes. As noted above, every drug plan will have its own pharmacy network. Unfortunately, this does not mean that most Medicare drug plans have established contracts or relationships with in-house pharmacies in IMDs, group homes, board and care homes, supportive housing, etc. It is critically important for CMHCs, public mental health agencies, and non-profits that manage supportive housing programs to know which plans their dual eligible tenants have been enrolled in and to reach out to these plans and insist that their pharmacies be included in each drug plan's network.
CMS has provided guidance to every Medicare drug plan encouraging them to do this. There is no legal or regulatory barrier preventing in-house pharmacies from continuing to provide medications to their residents who are dual eligible beneficiaries. It just requires them to deal with a new entity (a Medicare drug plan), as opposed to Medicaid or the state mental health authority. NAMI is especially concerned that Medicare drug plans have not done the work necessary to ensure that systems that have traditionally worked to provide medications to dual eligibles with mental illness can continue to do so under the drug benefit. This may be further complicated by difficulties that CMHC administrators, case managers, and other treatment professionals have been experiencing in finding out which plans the consumers they serve have been enrolled in.
Are there other web-based resources with information on Medicare Part D enrollment?