Medicare Advantage plans in most cases offer more benefits than traditional Medicare because of higher reimbursement rate increases established under the 2003 Medicare law, in addition to separate subsidies from the federal government for plans that provide prescription drug coverage.

Karen Ignagni, president of America’s Health Insurance Plans, said, “No member of Congress will be able to conclude that plans are overpaid next year.”

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Details on the CMS website.

and

http://www.cms.hhs.gov/PrescriptionDrugCovContra/01_Overview.asp#TopOfPage

GENERAL:

• The National Per Capita Growth percentage is used to baseline the rate tables for 2007. The rate is estimated at 6.9%. It is still not possible to predict the final impact on reimbursement with out knowing the other variables, like the Budget Neutrality and Coding Intensity factors.

PART C:

• The HCC model will be recalibrated for 2007 using 2002 and 2003 Fee For Service data. The current model is based on 1999-2000 data. It is expected that the new model will provide a more accurate prediction between health status and the costs associated with providing care. All segments will be updated (community, long-term institutional, new enrollee, and ESRD). There are no changes to the disease grouping in the model however coefficients (the higher the weight allocated to a grouping the higher the reimbursement). As a result of the recalibration of the HCC model, the frailty factor will also be recalibrated.
• The Fee For Service Normalization factor will be recalibrated for 2007 and will no longer be applied to the rate book but to the risk scores. The expectation is that mathematically the result will be the same. However between recalibrating the HCC model AND applying the FFS Normalization factor to the risk scores, the 2007 risk scores will be substantially different in 2007 and not really an apple-apple comparison to 2006 scores
• In 2007 Pain Management will be added (Medicare code 72) to the qualified specialty type and pain management has been added to the HCC model.
• 100% risk adjustment payments in 2007 for all MA plans except Social Health Maintenance Organizations (S/HMOs), Minnesota Senior Health Options (MSHO)/ Minnesota Disability Health Options (MnDHO), Wisconsin Partnership Program (WPP) and Massachusetts Senior Care Options (SCO) demonstrations who will be 75% risk adjusted in 2007.
• The budget neutrality factor will begin its’ phase out in 2007 with a 45% reduction.

DOWNLOAD THE CMS ADVANCE NOTICE HERE

We’re writing today with the objective that, during this initial period, CMS and providers keep lines of communication open. Physicians may occasionally need to help a patient by filing a prior authorization for a medication or appeal a medication’s tier. We want to make it as easy as possible for you to help your Medicare patients, as well as to ensure that you get the support you need if questions arise. Here’s a brief glossary of terms that may assist you in working with your patient’s prescription drug plan:

• Coverage determinations: The first decision made by a plan regarding the prescription drug benefits an enrollee is entitled to receive under the plan, including a decision not to provide or pay for a Part D drug, a decision concerning an exception request, and a decision on the amount of cost sharing for a drug.

• Exceptions: An exception request is a type of coverage determination request. Through the exceptions process an enrollee can request an off-formulary drug, an exception to the plan’s tiered cost sharing structure, and an exception to the application of a cost utilization management tool (e.g., step therapy requirement, dose restriction, or prior authorization requirement).

• Appeals: The process by which an enrollee may challenge a plan’s coverage determination. There are five levels in the appeals process: redetermination by the plan, reconsideration by the Part D QIC, an ALJ hearing, review by the Medicare Appeals Council, and review by a federal district court.

CMS has directed every prescription drug plan to have an expedited request process to communicate coverage decisions no less than 24 hours after receiving an expedited request, or 72 hours after receiving a standard request. We’ve provided an exceptions and appeals contact list for each prescription drug plan on the CMS website. To see this, click on:

http://www.cms.hhs.gov/PrescriptionDrugCovGenIn/04_Formulary.asp.

For more about the exceptions and appeals process, please go to

http://www.medicare.gov/Publications/Pubs/pdf/11112.pdf.

You will find a CMS publication that explains how to file a complaint, coverage determination, or appeal.

CMS is committed to making sure that beneficiaries covered under Part D get the drugs they need. However, in the event that backup systems fail, we are urging people with Medicare—and we hope you will do the same—to call 1-800-MEDICARE immediately so we can resolve the issue and get them their medication. But we want to let you know about the following additional resources that you can call on for support:

1. For your patients, CMS caseworkers can provide one-on-one help. We have hundreds of trained caseworkers working with Medicare beneficiaries to resolve any issues that may arise with this transition. If you have a patient who needs casework assistance, please call 1800-MEDICARE. Phone lines are open 24 hours a day, seven days a week.

2. CMS offers a formulary finder to enable you to find plans in your state that match the patient’s required drug list. It is linked to all plan formularies at: http://formularyfinder.medicare.gov/formularyfinder/selectstate.asp. If you are not sure whether the drug you prescribed is a Part B drug or a Part D drug, you can consult our Part B versus Part D coverage chart found at: www.cms.hhs.gov/pharmacy/downloads/partsbdcoverageissues.pdf.

3. Epocrates, the medical software company, offers PDP formulary information on its website. It provides both tier and step therapy information, is updated constantly, and can be easily accessed by computer or downloaded to a PDA at: http://www.epocrates.com.

We also want to bring your attention to the Request for Prescription Information or Change form. This is a general fax form to expedite communications between pharmacists and physicians. It was created by a coalition of medical societies and advocacy groups and can be found at: http://www.cms.hhs.gov/prescriptiondrugcovgenin/04_formulary.asp.

Finally, we’d like to let you know about some steps we’ve taken to support pharmacists who work with Medicare Part D. These include:

• Setting up a dedicated phone line for pharmacists to help answer questions regarding billing and beneficiary enrollment information;

• Distributing a new pharmacy computer tool, “E-1,” that provides pharmacists with real-time enrollment and eligibility-search information;

• Requiring plans to cover a standard 30-day supply of transitional prescription medication. CMS has approved transition procedures for all Medicare prescription drug plans to provide patients who are on stabilized drug regimens with at least a 30-day supply of their current medication, even if their particular drug is not on their plan’s formulary. Plans have also been asked to extend this temporary coverage on a case-by-case basis; and,

• A point of sale option that allows a beneficiary who is eligible for Medicare and Medicaid to join a plan at the counter to get the drugs they need. For examples of common situations, click on: http://www.cms.hhs.gov/Pharmacy/Downloads/whatif.pdf.

If you wish to communicate with CMS directly, please contact the Physicians’ Regulatory Issues Team (PRIT). You can e-mail PRIT@cms.hhs.gov and let us know what problems you might be encountering—we’ll do everything we can to help address those issues. If you would like to speak to us in person, please take advantage of our regular conference call at 2pm EST every Tuesday. This gives you an opportunity to ask questions directly of CMS staff. Call 1-800-619-2457. Pass code: RBDML. More information about PRIT is available on cms.hhs.gov.

We look forward to continuing to work with you to implement the new Medicare prescription drug coverage. Your help is invaluable in making sure that every Medicare beneficiary is able to get the medication they need.

Sincerely,

Jeffery Kelman, MD

William D. Rogers, MD Chief Medical Officer Director,
Physicians Regulatory Issues Team Center for Beneficiary Choices Office of External Affairs

The Kaiser Family Foundation releases a great monthly update on activites that impact Medicare Advantage and PartD businesses.

Credits:
Prepared by Stephanie Peterson and Marsha Gold, Mathematica Policy Research Inc. as part of work commissioned by the Kaiser Family Foundation

Download MA Plan Tracking Report

P4P is already on its way and most organizations that manage Medicare lines of businesses are not preparing for the changes in data collection and reporting. Here is a good article outlining the P4P programs already in demonstration with CMS and where they are headed. Now is the time for us to pay attention and begin planning and preparing.

Medicare Advantage (MA) Plans are beginning to plan for all of the anticipated changes in payments and reimbursements and there are many planned in 2007. Here are just a few factors that will determine who wins and loses on the battle for MA plan reimbursements:

• 100% Risk Adjustment – 2007 will be the first year that Medicare Advantage Plans will be reimbursed using 100% of the risk adjustment model since it was introduced in 2000. There will be no reimbursement based on the demographic model in 2007. Take a look at how your reimbursement would have looked last year if there was no demographic payments…nervous? This is the reality in 2007. Those with healthier populations (or appear to be because ICD9 codes are lost or miscoded) stand to lose.
• Expected Increase In National Base Payment Rate – CMS is expected to announce an increase in the national base payment rate for specific service areas in April 2006. Many experts assume a “reasonable” increase would be 5%. This will affect everyone the same way. The most significant variable is how much…wait till April to find out.
• “Budget Neutrality” Factor Going Away – Last year CMS announced that they have accelerated the phase out of the Budget Neutrality Factor over a five year period starting in 2006-2007 reducing the factor by 45%! The adjustment factor is currently 13.05% and would be reduced to approximately 7% in 2007.
• Shorter Final Submission Deadline for 2005 Data –Plans have been allowed approximately 1yr 5 months to make final risk adjusted data submission to CMS. For data with a data of service in 2005, the deadline will be reduced by five months, the final submission due date is 1/15/2007. So much for the 2006 holiday season!

The Winners Will Be:

When taking a look at who will be positioned to best take advantage of the changes in 2007; here is what the winners may look like:

• Plans with Sicker Than Average Populations – Plans with sicker populations stand to actually see a slight increase in their average PM/PM payments from CMS where plans with healthier populations may see a reduction because of the 100% RA payments and the phase out of the budget neutrality factor.
• Plans / MSOs Who Manage And Mine Data – Those that do not have a handle on the quality of data captured and sent to CMS may appear to have healthier populations than they really are managing and paying for. Now is the time for investments in tools, processes and training to maximize payments in 2008 and beyond.
• Turning Information In To Action – Many companies have made investments in data management and informatics to understand their data and anticipate where there are gaps. Their challenge now is to turn these mountains of data in to action at the provider level. Now is the time to investigate how to motivate providers, partner with them and offer incentives that will change their view of the data and their actions. Adopt best communication practices and technologies that include the provider in the solution at the point of service. Retroactive actions are more costly, disruptive and can reduce the quality of care rather than providing information and additional solutions at the point of service.
• Those Who Educate / Support Providers – Providers are the absolutely essential in solving these challenges. Winners will have partnered with providers and provided adequate support, training and tools to provide the best quality of care and documentation possible. Never underestimate the investments made at the provider level…P4P will become an additional piece of the MA space and providers will be key to those changes.

Are you ready for 2007?