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What to Do About Medicare Part D

February 1, 2006
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The California HealthCare Foundation's model guidance on coping with the massive challenges
What to do about Medicare Part D

Excerpt from "The Medicare Drug Benefit: Impact on Nursing Facilities," California HealthCare Foundation

Editor's Note: Confusion has been the hallmark of Medicare Part D enrollment since its inception on November 15, 2005, and as of press time this has shown no sign of abating. It isn't just a matter of elderly, often computer-adverse beneficiaries feeling overwhelmed by their not always crystal-clear choices. Providers are often in the dark concerning their patients' pharmaceutical coverage and, of these providers, nursing homes may be the most grievously afflicted: Residents are often cognitively compromised, use upwards of a half-dozen medications each day, and have decisions made by family members off-site, sometimes distantly so. Realizing that its 1,300 facilities, serving some 105,000 residents, were no more shielded from this conundrum than any other in the nation, the California HealthCare Foundation commissioned a Washington, D.C., healthcare think tank, Avalere Health, LLC, to report on how nursing facilities might optimally prepare for the looming Part D challenge. Although some of its references and allusions are specific to Medi-Cal, the California Medicaid program, Nursing Homes/Long Term Care Management found the report to be the clearest and most pointed guideline yet to appropriate response. What follows is a key excerpt from the report. Implementation of the Medicare drug benefit presents numerous challenges for nursing facilities and their residents. Some of them are short-term, either because they relate to the transition from the current system or will diminish in importance as participation in Medicare Part D grows over time. Other challenges will persist for the long term.

Many nursing facility residents will require help choosing a Medicare drug plan. The Medicare prescription drug benefit is both new and complex, requiring beneficiaries to compare plan benefits, formularies and cost-sharing responsibilities, and to reconcile those options with current drug spending in order to choose the best plan.

For many Medicare beneficiaries, physicians and pharmacists will play a leading role in providing information about the new drug benefit. However, Medicare beneficiaries residing in nursing facilities are much less likely to make use of these providers-with whom they have little interaction-for this information. Also, because mail is typically sent to the beneficiary's home address or that of a family member, nursing facility residents are less likely to receive information sent by CMS or the drug plans. Moreover, the majority of nursing facility residents have a cognitive impairment, and very few are likely to evaluate their plan choices using the CMS Web site or other Internet resources. For some residents, the nursing facility has been designated as an authorized representative and will choose the drug plan for the resident.

For all these reasons, nursing facility staff likely will play a leading role in helping residents select a drug plan that provides adequate, affordable coverage. This will be a natural extension of the role nursing facility staff currently play in educating residents and their families about payer benefits and coverage rules, and about Medi-Cal eligibility and enrollment, but will require increased facility administrative capacity. Federal guidelines detailing the extent to which nursing facilities may assist beneficiaries with plan selection has been ambiguous; it has been clearly indicated, however, that nursing facilities will not be permitted to steer beneficiaries into one or a few preferred drug plans.

Nursing facilities may not know which drug plans their residents have been assigned to. When a dual-eligible beneficiary is auto-assigned to a Medicare drug plan, CMS will notify the beneficiary (by mail, often to the beneficiary's home address) and the drug plan. However, CMS does not intend to notify nursing facilities of the drug plan assignments for their dual-eligible residents. Until nursing facility staff are notified (by the beneficiary, a family member, or the drug plan), they may not have sufficient information to manage a resident's prescription drug regimen in accordance with the rules of the new drug plan. The facility also may not know if its resident's drug plan has a network relationship with the facility's contracted LTC pharmacy. And a facility may not know if CMS has failed to enroll some of its dual-eligible residents....

New systems and processes are needed to ensure proper coordination between nursing facilities and multiple drug plans. The new Medicare prescription drug benefit is designed to promote competition among drug plans and pharmacies in price and service. To work with multiple, competing drug plans, nursing facilities must:

  • Determine which drug plan a new resident is enrolled in, whether the resident's drug plan works with the facility's LTC pharmacy, what drugs are covered under the formulary, and how a resident or authorized representative would navigate the plan's exceptions process. It is particularly important that this determination be made immediately upon admission for beneficiaries who enter nursing facilities without a stay covered by Medicare Part A.

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