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A free service for subscribers to AIS’s monthly newsletter Medicare Part D Compliance News.

October 11, 2007

In this Issue

OIG Releases 2008 Work Plan With Major Focus on Medicare Part D

Seventeen Organizations Will Sponsor Nationwide Part D Plans in 2008

Plans Will Start Collecting Late Penalties

OIG Releases 2008 Work Plan With Major Focus on Medicare Part D

The HHS Office of Inspector General (OIG) released its 2008 Work Plan Oct. 1, including OIG audit and evaluation targets focused on Medicare Part D. These targets, with an emphasis on preventing duplicate claims and the retiree drug subsidy program, include review of:

CMS’s system to reimburse states participating in the Part D dual-eligible demonstration project and assisting dual-eligible and low-income beneficiaries;
Drug claims for individuals who are receiving hospice benefits under Medicare Part A and drug coverage under Part D to determine whether payments made under Part D are correct, supported, and not duplicated in the hospice daily per diem amounts;
CMS’s controls to prevent duplicate Part D claims for the same beneficiary, particularly when a beneficiary changes plans, tries to enroll in more than one plan, or tries to enroll in a plan and a retiree-subsidy covered plan;
Whether claims submitted under Part D have been submitted under Medicare Part A or Part B also;
CMS’s oversight of Medicare Part B and Part D to determine whether there is sufficient coordination to prevent duplicate payments for prescription drugs;
Selected employer controls to track actual allowable retiree costs under the retiree drug subsidy (RDS) program, to ensure that only Part D-covered drugs related to allowable costs are included in the employer interim drug cost submissions, and to develop estimates of expected rebates and other price concessions used for determining interim subsidy payments;
Selected employer RDS plans to identify any material changes to the actuarial value of the plans since their initial approvals;
Whether CMS, stand-alone Prescription Drug Plans, and Medicare Advantage drug plans have established adequate controls over the Part D reconciliation process and whether the plans have submitted accurate and timely information to CMS;
Whether Part D plans enrolled qualified beneficiaries into Medication Therapy Management programs and submitted administrative costs that were supported, reasonable, and allowable;
Part D claims to identify aberrant claims deviating from the usual patterns;
Whether drugs charged to enrollees’ accounts were appropriate for those enrollees who reached the Part D catastrophic coverage limit;
The methodology that CMS uses to review and approve Part D bids;
Part D sponsors’ implementation of and compliance with provides regarding passing on negotiated drug prices to beneficiaries, and CMS’s oversight of sponsors’ disclosure and pass-through of negotiated price concessions;
CMS’s oversight of marketing materials for PDPs;
Potential fraudulent drug overutilization by dual-eligible beneficiaries;
The integrity of drug prices listed on the Medicare Prescription Drug Plan Finder; and
The extent to which PDP sponsors detect and report fraud, waste, and abuse to CMS.

To view OIG’s complete Work Plan, go to www.oig.hhs.gov, and click on “What’s New.”

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The October issue of Medicare Part D Compliance News includes stories on preparing for upcoming CMS audits, reassignment of low-income subsidy beneficiaries, the importance of focusing on enrollment reconciliation as plans finish up Prescription Drug Event data reconciliation, and a court’s decision that a beneficiary must exhaust Part D administrative remedies before seeking judicial review.

For more information on this and other AIS Part D services, please go to www.AISHealth.com/Products/partdproducts.html.

Seventeen Organizations Will Sponsor Nationwide Part D Plans in 2008

As reported in the Sept. 28 Part D E-Letter, 17 organizations will offer national stand-alone Prescription Drug Plans (PDPs) in 2008. This is the same number as in 2007. However, two plans from 2007 are not returning for 2008 — Express Scripts, Inc. and NMHC Systems Inc. The national PDPs in 2008 are: Aetna, Inc.; CIGNA Corp.; Coventry Health Care, Inc.; CVS Caremark Corp.; EnvisionRxPlus, Inc.; Health Net, Inc.; Humana Inc.; Longs Drug Stores Corp.; Medco Health Solutions, Inc.; Member Health, Inc.; NewQuest Health Solutions LLC; Sterling Insurance Group (new for 2008); Torchmark Group; UnitedHealth Group, Inc.; Universal American Financial Corp. (new for 2008); WellCare Health Plans, Inc.; and WellPoint, Inc.

Some national plans have started releasing details of next year’s plan offerings in anticipation of the annual open-enrollment period set to begin Nov. 15, including the following:

UnitedHealth will offer a new Part D drug plan with zero copayments for generic drugs through the mail. It also said it will offer a PDP that provides coverage for certain generic drugs in the coverage gap or “donut hole” — the gap between total drug spending of $2,510 and out-of-pocket spending expenditures of $4,050 in 2008. UnitedHealth’s AARP MedicareRx Preferred plan will have no annual deductible and will include coverage of “Tier 1” generic drugs in the coverage gap. The plan also includes a “Bonus Drug List,” containing several drugs not otherwise covered by Part D, UnitedHealth said.
Medco will offer three new Part D plan options for 2008 — a Value Plan with monthly premiums ranging from $22.20 to $33.30 and annual deductibles of up to $275; a Choice Plan with premiums ranging from $29.10 to $44.60, no deductible, and $6 copayments for 90-day supplies by mail; and an Access Plan with premiums ranging from $62 to $87.90, no deductibles, coverage in the gap at $6 for generics, and copays of $6 for 90-day supplies by mail. The company also said it will provide a “coverage gap alert” that notifies members when they are approaching the donut hole.
WellPoint will offer a new “Prescription Savings Program” to provide existing Part D members and new Blue Cross and Blue Shield and UniCare members with discounts on non-formulary drugs, including weight-loss and erectile dysfunction treatments. The program will provide savings averaging 22% off a pharmacy’s customary price, the company said, adding that the discount can be used at most major pharmacies. Premiums for WellPoint’s PDPs will range from $14.30 a month for the “value” plans to $76.50 for the “premier” plans. The company will continue to offer gap coverage on generic drugs in its Premier/Gold Part D plans.
WellCare will offer two plans — Signature and Classic —with zero generic drug copays and “low-plan premiums,” the company said. The organization will be able to keep 94% of its current low-income subsidy members at the same zero premium.

For more information about some of these plans, contact WellPoint’s Janice Kyser at Janice.kyser@wellpoint.com, WellCare’s John Aberg at john.arberg@wellcare.com, and United’s Peter Ashkenaz at (202) 383-6415.

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CMS Updates Drug Plan Finder

The Medicare Prescription Drug Plan Finder, on www.medicare.gov, is updated with 2008 plan information as of Oct. 11, CMS said Oct. 10. Now beneficiaries and their caregivers can begin to review 2008 Medicare prescription drug plan and health plan information online in order to make informed choices of which health plan is the right one for them in 2008 prior to the start of the annual open-enrollment period Nov. 15.

The agency said the plan finder has been enhanced, with more information and greater clarity on available drug plans, including out-of-pocket costs, pharmacy networks, and important Medicare news and updates. CMS also advised beneficiaries to look for the 2008 Medicare & You handbook which should be arriving sometime in October.

To read CMS’s news release, go to www.cms.hhs.gov and click on “Newsroom.”

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Plans Will Start Collecting Late Penalties

Part D plans will begin collecting late enrollment penalties for the first time under the Part D benefit in 2007, and according to the Center for Medicare Advocacy, Inc., there have already been some problems.

In general, beneficiaries who fail to enroll in a Part D plan when they are first eligible and who do not have “creditable coverage” — coverage that is at least equivalent to that offered under the standard Medicare drug benefit — for a period of 63 days following the last day of a beneficiary’s initial enrollment period or the end of creditable coverage from another insurance source will be subject to a penalty of 1% of the premium for each uncovered month.

The penalty start date is either May 16, 2006 or three months after the beneficiary first becomes eligible for Medicare. For example, the national average monthly premium is $27.32 in 2007. Thus, beneficiaries who could have enrolled in Part D by May 15, 2006, but did not enroll until January 2007, will have $1.91 (7%) added to their base monthly premium in 2007:

($27.32 x .01 x 7 months [June through December 2006] = $1.91)

The penalty calculation formula will be adjusted each year to take into account the new national average monthly premium for the year the beneficiary actually enrolls in a plan.

“While there has been time to establish the process, concerns still exist,” says the center. “If this follows the pattern of the 2006/2007 Social Security Part D premium deduction process, advocates should be ready for a whole new set of problems in 2008,” it warns. According to the center, it received a call from a beneficiary who claimed to have received a letter from his plan, which has covered him from March 1, 2006 to the present day, telling him that information they received from CMS indicates he has had a lapse in coverage greater than 63 days and, therefore, will be subject to a penalty. The center says the beneficiary has returned his attestation form and is waiting to see what happens next.

For more information, go to www.medicareadvocacy.org.

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