Compliance TrainingEnrollment Regulatory Training, Segment 1: A Medicare Overview

March 2010

Presented By:

Kim Pinar

Administrator, Compliance

Before We Get Started….

• This is a two hour course, which includes

– this presentation,

– a fun interactive game and

– a short quiz at the end

• Please feel free to ask questions at any time!

2

Table of Contents

1. Training Disclaimers

2. Acronyms

3. History Of Medicare and CMS

4. Medicare Coverage Basics

5. Medicare Coverage Choices

• Original Medicare

• Medicare Advantage Plans

• Other Medicare Plans

• Medicare Part D

• Medigap

6. Enrollment and ESRD

7. Resources

Training Disclaimers

• These training slides are meant to serve as an overview and

background. They are high level.

• These slides may be used as a guide to the rules and guidance.

They should not be used as a replacement for the actual CMS

issuances.

• Although this training presentation outlines the current

regulations, any of the information discussed in this training is

subject to change by law or CMS.

Acronyms

Frequently Used Acronyms A-H

• AEP: Annual Election Period

• AM: Account Manager

• BCSS: Batch Completion Summary Status report

• BEQ: Batch Eligibility Query

• CCP: Coordinated Care Plan

• CMS: Centers for Medicare & Medicaid Services

• CTM: Complaints Tracking Module

• ESRD: End Stage Renal Disease

• FEHB: Federal Employee Health Benefits

• FFS: Fee for Service

• GEP: General Enrollment Period

• GHP: Group Health Plan

• HCFA: Health Care Financing Administration

• HCCP: Health Care Prepayment Plan

• HMO: Health Maintenance Organization

Frequently Used Acronyms I-O

• ICEP: Initial Coverage Election Period

• IEP: Initial Enrollment Period

• IG: IntegriGuard

• LEP: Late Enrollment Penalty

• LIS: Low Income Subsidy

• M+C: Medicare+ Choice

• MA: Medicare Advantage

• MA-PD: Medicare Advantage Prescription Drug

• MMR: Monthly Membership Report

• MSA: Medicare Medical Savings Account

• OEC: Online Enrollment Center

• OEP: Open Enrollment Period

Frequently Used Acronyms P-Z

• P&P: Policy and Procedure

• PACE: Program of All Inclusive Care for the Elderly

• PDP: Prescription Drug Plan

• PFFS: Private Fee For Service

• PPO: Preferred Provider Organization

• RO: Regional Office

• SCC: State and County Codes

• SEP: Special Election Period

• SMI: Supplementary Medical Insurance

• SNP: Special Needs Plan

• SOP: Standard Operating Procedures

• SPAP: State Pharmaceutical Assistance Program

• SSA: Social Security Administration

• TRR: Transaction Reply Report

• VA: Veterans Affairs

History of Medicare and CMS

Brief history of Medicare and CMS

Presidents Johnson and Truman with Lady Bird and Bess looking on

at the Medicare signing ceremony

The Medicare (Title 18 of the Social Security

Act) and Medicaid (Title 19 of the Social

Security Act) programs were signed into law

on July 30, 1965

Brief history of Medicare and CMS

• In the beginning Medicare was part of the Social Security

Administration (SSA) and Medicaid was in the Social and

Rehabilitative Services Administration

• In 1977, President Carter joined Medicare and Medicaid

together into the Health Care Financing Administration

(HCFA)

• Secretary Thompson renamed HCFA to the Centers for

Medicare & Medicaid Services (CMS) on June 14, 2001

Brief history of Medicare and CMS

• In 1997, President Clinton signed

the Balanced Budget Act,

establishing the Medicare+Choice

(M+C) Program, including Private

Fee-For-Services (PFFS) plans

• At its high point about 16% of the

Medicare beneficiaries were

enrolled in M+C

• Payment rates were a problem for

the program

• In 1998, 346 plans participated, but

by 2003, the number of plans

dropped to 148.

• By 2003, 11% of Medicare

beneficiaries were enrolled in M+C

President Bush signed the Medicare Modernization Act of 2003

(MMA) creating Medicare Advantage and Part D

Medicare Beneficiaries

• President Lyndon Johnson signed the bill for the

Medicare and Medicaid programs into law on July 30,

1965.

– Medicaid began January 1, 1966, and

– Medicare began July 1, 1966.

• Medicare is the nation’s largest health insurance program,

currently covering over 44 million Americans.

Applying for Medicare

• Social Security tells people it is best to apply for Medicare 3 months before age 65.

– An individual can’t get Medicare benefits before age 65 unless they have a disability or ESRD.

• If a beneficiary is receiving Social Security benefits (for example, getting early retirement), he/she will be automatically enrolled in Medicare without having to apply again.

– He/she will get a Medicare card and other information about 3 months before age 65 or before the 25th month of disability benefits

Medicare Coverage Basics

Medicare Coverage Basics

• Part A (Hospital Insurance)

• Part B (Medical Insurance)

• Part C (Medicare Advantage Plan)

– For Example: an HMO or PPO

• Part D (Medicare Prescription Drug Plan)

Medicare Part A - Hospital Insurance (HI)

• Most people don’t pay a monthly premium for Part A.

• Part A covers

– Inpatient care in hospitals

– Care received in a skilled nursing facility,

– Hospice, and

– Home health care

• Most people will automatically become eligible for Part A when

they reach age 65 if they are eligible for

– monthly Social Security retirement or

– survivor benefits or

– railroad retirement benefits.

– Note: these individuals will not have to pay a premium for Part A.

Medicare Part A - Hospital Insurance (HI)

• Individuals under the age of 65 may be entitled to Part A if

they are entitled to

– Social Security Disability

– Railroad Retirement Disability

– Note: These individuals will not have to pay a monthly premium

for Part A.

• Individuals older than 65 who are not automatically entitled to

Part A may voluntarily enroll in the Part A program.

– By doing so, they will be required to pay a monthly premium.

– The Part A premium amount is determined on a case-by-case

basis.

• In 2010, individuals will pay up to $461 each month if they don’t

get premium-free Part A.

Medicare Part B - Supplementary Medical

Insurance (SMI)

• Individuals may choose whether or not to enroll in Medicare Part B.•

• Medicare Part B covers medically necessary services including but

not limited to the following:

– Outpatient Hospital Services such as outpatient surgery

– Doctor Office Visits

– Radiology Services such as X-rays, MRI, CAT Scans, etc…

– Laboratory Services

– Certain Invasive Procedures

– Physical Therapy

– Durable Medicare Equipment (DME)

Medicare Part B Premium

• Most individuals will pay a monthly premium of $96.40 in 2010.– This amount may be reduced by some Medicare Advantage plans as

a supplemental benefit.

• Some people with higher annual incomes pay a higher Part B premium.

– In 2009, higher income beneficiaries will pay a monthly premium equal to 35-80 percent of the total cost, depending on what they reported to the IRS.

• This affects less than 5% of Medicare beneficiaries.

• Most people will continue to pay the standard premium without an income-related adjustment.

• These amounts change each year

– For example:

• If an individual files their taxes as “married, filing jointly” and their income is more than $170,000, they will pay a higher Part B premium.

•

• If an individual files their taxes as single and their income more than $85,000, they will pay a higher Part B premium.

Medicare Part B

• A prospective beneficiary can sign up for Part B any time during a 7-month period that begins 3 months before the month they become eligible for Medicare. – This is called the Part B Initial Enrollment Period (IEP).

• For Example:

– Stanley Smith’s 65th birthday is June 21, 2009. His Medicare Part A

will become effective June 1, 2009 and he is eligible to enroll into

Part B to be effective as early as June 1. His IEP for Part B is March

1, 2009 through September 30, 2009.

SeptemberJulyJune 1March April May August

IEP for Part B

Three Months before Eligibility Three Months after Eligibility

The Month

of Eligibility

Medicare Part B

• If a beneficiary doesn’t enroll in Part B when they are first eligible,

they may have to wait to sign up during a General Enrollment

Period (GEP).

– This period runs from January 1 through March 31 of each year, with

coverage beginning July 1 of that year.

– Those that wait may have to pay a premium penalty of 10% for each full

12-month period he/she could have had Part B but didn’t sign up for it.

There is no MA reduction possibility for the Part B enrollment penalty.

• Some people may delay enrolling in Part B without being assessed a

penalty

– If they delay enrolling in Part B because they had employer or union

group health coverage, based on their or their spouse’s employment

• They will get a Special Enrollment Period (SEP) upon retiring.

• They must sign up within 8 months after coverage ends

Paying the Part B Premium

• Facts about Part B Premiums

– They may be taken out of monthly payments

• Social Security

• Railroad retirement

• Federal government retirement

– May be billed to the beneficiary and paid for by check

monthly or quarterly.

– May be reduced by some Medicare Advantage plans

Medicare Coverage Choices

Summary of Medicare Coverage Choices

• So now a beneficiary is entitled to Medicare Part A

and has enrolled in Medicare Part B, what coverage

options do they have?

– Original Medicare (Fee-for-service; FFS)

– Medicare Advantage Plans (PFFS, PPO, HMO & SNP)

– Other Medicare Plans (PACE, various demos, health

care prepayment plan)

– Stand alone Medicare Prescription Drug Plans (PDP)

– Medigap

Original Medicare

FFS Medicare

• Beneficiaries can go to any health care provider that

accepts Medicare

• For Part A services in 2010, beneficiaries pay

– $1,100 deductible for hospital stays up to 60 days

• After 60 days, days 61-90, beneficiaries must pay $275 per

day

– Additional costs for other Part A services

• For Part B services in 2010, beneficiaries pay

– $155 annual deductible

– 20% coinsurance for most Part B services

Medicare Advantage (MA) plans

Medicare Advantage (MA) plans

• MA Plan types include:

– Health Maintenance Organization (HMO) Plans

• Some have Point-of-Service (POS) option

– Preferred Provider Organization (PPO) Plans

– Private Fee-for-Service (PFFS) Plans

– Special Needs Plans (SNP)

– Medicare Medical Savings Account (MSA) Plans

• Available option since 2007

• MSA plans are not integrated, meaning they do not have Part D coverage like an MA-PD does.

How Do MA Plans Work?

• Members of a MA plan generally get all Medicare-covered

services through the plan.

– It can include prescription drug coverage.

• A MA plan that includes drug coverage is called a MA-PD plan.

• Members may have to see certain doctors or go to certain

hospitals to get care

– Emergency care covered anywhere in the U.S.

• Benefits and cost-sharing may be different from Original Medicare

– If Medicare covers an item or service the MA plan must also cover it.

• Many plans have supplemental benefits and reduced premiums.

– Generally must still pay Part B premium however some plans pay all

or part of the Part B premium.

Medicare Advantage Members

• Important facts about Medicare Advantage Members

– They are still in Medicare program

– They still have Medicare rights and protections

– They still get all regular Medicare-covered services

– They may get extra benefits

• Such as vision, hearing, dental care, and routine care

– They may be able to get prescription drug coverage

Medicare HMO Plans

• A few important facts about Medicare HMOs

– Copayment amounts are set by the plan

– Members generally must get care and services from plan’s

network

• Use doctors and hospitals that are part of the plan’s network

• May have to pay in full for care outside plan’s network

– Members may need to choose a primary care doctor

• Members usually need a referral to see a specialist

• Doctors can join or leave the network

– Plans may include prescription drug coverage

• Individuals in a HMO plan may NOT have a standalone PDP plan.

– If an individual wants HMO coverage and prescription drug

coverage, they would need to choose a HMO with drug coverage.

Medicare PPO Plans

• Members can see any provider that accepts Medicare

– Usually does not need a referral to see specialist

• Can see out-of-network providers

– Copayment and coinsurance amounts set by plan

• Members will usually pay more for out-of-network care

• Plans may include Medicare prescription drug coverage

• Individuals in a PPO plan may NOT have a standalone PDP

plan.

– If an individual wants PPO coverage and prescription drug

coverage, they would need to choose a PPO with drug coverage.

• Members may need prior approval for certain procedures

Medicare PFFS Plans

• Can see any Medicare-approved doctor or hospital that accepts the plan

– Members can get services outside service area

– Members may see a specialist without a referral

– The plan sets the copayment amounts

• Some PFFS plans offer Medicare prescription drug coverage

– Individuals can have a PFFS plan and a standalone PDP plan.

Special Needs Plans (SNPs)

•Designed to provide

– Focused care management

– Special expertise of plan’s providers

– Benefits tailored to the member’s

conditions

•Must include prescription drug coverage

– All SNP plans are MAPD type plans.

•There are three types of SNPs

– May limit all or most of membership to

people

1.With certain chronic or disabling

conditions

2.Eligible for Medicare and Medicaid

3. In certain institutions

MSA Plans

• MSA Plans started in 2007

• Similar to Health Savings Account plans

• Have two parts

– Medicare Advantage Plan with high deductible

• Pays covered costs after annual deductible is met

– Medical Savings Account

• Medicare deposits money the person may use to pay health

care costs

– Individuals may have a MSA plan and a standalone PDP plan.

Other Medicare Plans

Other Medicare Plans

• A small number of beneficiaries are enrolled in a variety

of pre-Medicare Modernization Act (MMA) plans such as

– PACE or

– the health care prepayment plan (HCCP) available to

some coal miners and railroad retirees.

– Cost Plans

• Essence is not currently engaged in these products.

Medicare Part D

Medicare Part D

• This coverage option began January 1, 2006

• All people with Medicare can join a Part D plan

• Plans are provided through private companies

– Medicare Prescription Drug Plans (PDP)

– Medicare Advantage and other Medicare plans

– Some employers and unions (Retiree Drug Subsidy)

• Note: Must be enrolled in one of these plan options to get coverage.

• Most people will have to pay a premium for Medicare Part D

coverage except

– Folks that qualify for “Extra Help” through SSA or Medicaid also

known as Low Income Subsidy (LIS) will have their premiums

reduced or paid for them.

Medicare Prescription Drug Plans

• A few facts about Medicare Prescription Drug Plans

– Are sometimes called

– “Stand-alone” drug plans

– PDPs

– Is included in some MA plans

– Coverage may be in addition to

• Original Medicare

• Some other types of Medicare plans

– Some Medicare Private Fee-for Service Plans

– Some Medicare Cost Plans

– Medicare Medical Savings Account Plans

– Can be flexible in benefit design

• Must offer at least standard level of coverage

• May offer different or enhanced benefits

• Benefits & costs may change from year to year

Late Enrollment Penalty (LEP)

• An individual may have to pay a penalty if

– They do not apply for a Medicare Part D plan when they are first

eligible to do so (during their IEP for Part D) or

– They go 63 days or more without creditable coverage

• A penalty will not be assessed for

– People with extra help

– People who had creditable coverage

• What is the penalty amount?

– The penalty amount is 1% of the National base Medicare Part D

premium for every month the individual was eligible but not

enrolled.

• The National base Medicare Part D premium is $30.36 in 2009.

– Is subject to change each year.

– Penalty amount is added to premium bill.

What is Creditable Drug Coverage?

• Coverage paying at least as

much as Medicare’s standard

drug coverage such as

– Employer group plans

– Retiree plans

– VA

– TRICARE

– FEHB

– Qualified SPAPs

• Only qualified SPAPs are

considered creditable.

Part D Drugs

Part D Covered Drugs are

– Available only by

prescription

• Include brand-name and

generic drugs

– Approved by FDA

– Used and sold in U.S.

– Used for medically-accepted

indication

– Include

• Drugs

• Biologicals

• Insulin

– Supplies associated with

injection or inhalation

Part D Non-Covered Drugs are

– Excluded by law from

Medicare coverage

• Plan may choose to cover

– Own cost

– Share cost with member

– Non-prescription drugs

– Covered under Medicare

Part A or B

Medigap

Medigap (aka Medicare Supplement)

• Health insurance policy

– Sold by private insurance companies

– Must say “Medicare Supplement Insurance”

– Covers “gaps” in Original Medicare

• Deductibles, coinsurance, copayments

• Does not work with Medicare Advantage Plans

– Up to 12 standardized plans A – L

• Except in Massachusetts, Minnesota, Wisconsin

Basics of how Medigap works

• A beneficiary can buy a Medigap policy

– Within 6 months of enrolling in Part B

• Must be age 65 or older

• May obtain a Medigap policy under 65 years of age,

dependant upon state laws.

– If he/she lost certain kinds of health coverage through

no fault

– In some cases, if he/she left a Medicare Advantage Plan

• Pay a monthly premium

• Generally can go to any doctor or specialist

Enrollment and ESRD

End-Stage Renal Disease (ESRD)

• What is ESRD?

– Kidney failure

• Irreversible and permanent

• Requires regular dialysis or a kidney transplant to maintain life

• Medicare Coverage for individuals with ESRD began in 1973

A Few Facts

•Over 432,800 were enrolled during 2006

•Over 1 million receive life-saving therapy

– Dialysis

• Over 340,000 on dialysis by end of 2005

– Transplant

• More than 302,500 kidney transplants

since program began

ESRD Part A and B Eligibility

• Individuals with ESRD are eligible for Medicare Part A at any age if

– they need regular course of maintenance dialysis (therefore need a

kidney transplant) or

– they had kidney transplant

AND have acquired at least one of the following

– worked required amount of time

– are receiving Social Security, railroad retirement, or Federal retirement

benefits

– are the spouse or dependent child of someone

• who worked the required amount of time or

• receives benefits

• Note: Individuals can enroll in Part B if entitled to Part A.

– Will have to pay Part B premium

ESRD Coverage

• ESRD Coverage begins

– The individual’s fourth month of dialysis

• First month if certain conditions are met

– The month the individual receives a kidney transplant

– Month the individual is admitted to an approved hospital

• For transplant or procedures preliminary to transplant

– 2 months before month of transplant

• If transplant is delayed more than 2 months

• ESRD Coverage Ends

– If ESRD is the ONLY reason the individual was entitled

• 12 months after the month they no longer require maintenance

dialysis OR

• 36 months after month of kidney transplant

Medicare Coordination of Benefits for ESRD

• If ESRD is only reason an individual has Medicare

– During first three months of dialysis

• Generally Medicare will not pay

• GHP is generally the only payer.

• Medicare is the secondary payer for a 30-month coordination

period

– The Coordination Period begins when first eligible for Medicare

• Even if not enrolled

– During coordination period

• GHP pays first

• Medicare pays second

– Medicare pays first after 30 months

– New 30-month period begins if new period of Medicare coverage

ESRD Coverage Options

• Original Medicare is usually the only choice with a few

exceptions.

• There are a few situations in which an individual with ESRD

can join a MA plan.

– If they’ve had a successful kidney transplant.

– If they are already in a MA plan and develop ESRD, they can stay

in the plan or join another plan offered by the same company in

the same state.

– They may join a MA plan if they are in a Group Health Plan (GHP)

and later become eligible for Medicare based on ESRD.

• They can join a MA plan offered by the same organization that

offered the GHP.

• Note: There must be no break in coverage between the non-Medicare

plan and the MA plan.

ESRD Coverage Options continued

– If an ESRD member of a plan discontinues their Medicare

contract or no longer provides coverage in their area, they can

join another MA plan.

– Employer Group sponsored MA plans may choose to accept

enrollees with ESRD under certain limited circumstances.

• NOTE: If an individual with ESRD leaves their MA plan, their

only plan option is Original Medicare.

Resources

Resources

• Centers for Medicare & Medicaid Website

– http://www.cms.hhs.gov/

• 2010 Medicare and You

– http://www.medicare.gov/Publications/Pubs/pdf/10050

.pdf

• 2009 Medicare Explained Manual

QUESTIONS