What to Do About Medicare Part D
|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:
These changes may drive up nursing facility administrative costs in two ways. First, new systems and processes require money to establish and maintain. Second, nursing facilities may have to pay for some of the services LTC pharmacies now provide free of charge. These changes could have a spillover effect both on Medi-Cal spending and the level of resources nursing facilities will have for staffing and other areas that affect quality of care. Recent research shows that half of nursing facilities in California are now operating at no profit or losing money. The additional administrative burdens of managing Part D will likely worsen their financial outlook.
Many nursing facilities may try to maintain a “one facility, one pharmacy” arrangement by encouraging (or requiring) their preferred LTC pharmacies to participate in all available drug plan networks. Although this approach would allow residents to choose any drug plan, it does not address the underlying challenges nursing facilities and pharmacies would face in dealing with multiple formularies, plan benefit rules, and plan billing requirements. Another strategy for nursing facilities may be to encourage all residents to enroll in one drug plan (or some small subset of available drug plans), taking advantage of the residents’ right to switch plans monthly. This approach would greatly reduce the administrative and clinical complexity of providing drugs to residents. Its success, of course, would hinge on residents’ agreement to enroll in the facility’s selected drug plan. A significant problem with this approach, however, is that not all residents’ medication needs are likely to be best served by one plan. As a result, CMS has stated that steering beneficiaries to particular drug plans is inappropriate. CMS has not explicitly defined “steering,” but it is likely that some actions taken by a nursing facility to encourage the selection of a single plan would be deemed improper.
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Reprinted from “The Medicare Drug Benefit: Impact on Nursing Facilities,” courtesy of the California HealthCare Foundation at www.chcf.org.
Topics: Articles , Medicare/Medicaid