Health Reform & Medicare Part D In March 2010, President Obama signed landmark new health reform legislation into law. This law has two pieces—the Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act of 2010—and is now known collectively as the Affordable Care Act (ACA). When joined together, these pieces have resulted in, and will continue to result in, major changes across the U.S. health care system for virtually everyone. These changes will especially affect health insurers and the customers who rely on our products to deliver both high-­‐quality health care and financial security at an affordable cost. Specifically, the ACA has already made important changes to Medicare, the federal health insurance for people who are 65 years and older and certain other eligible individuals. Furthermore, in the coming months and years, the ACA will continue to make more changes to Medicare Part D. This document provides an overview of many of the most significant changes to the Medicare prescription drug coverage program (Part D) along with their effective dates. However, it is important to remember that the specific details of how the changes will be implemented are subject to new regulations from the U.S. Department of Health & Human Services (HHS), Centers for Medicare & Medicaid Services (CMS) or other authorized entity. Changes Effective in 2010
Issue
Part D Coverage Gap Rebate
Summary
• Provides a one-­‐time $250 rebate to Medicare beneficiaries who enter the Part D coverage gap (“donut hole”) • Rebate payable from the federal government’s Medicare Prescription Drug Account, not prescription drug plans (PDPs) HHS Authority • Specifies that the HHS secretary is not required to accept any or every bid submitted by a Part D plan sponsor to Deny Plan • Authorizes the HHS secretary to deny Part D plan bids if they Bids
propose significant increases in cost sharing or decreases in benefits for the 2011 plan year or in future years • Requires the HHS secretary to establish and maintain a complaint Part D system for Part D plans and a model electronic complaint form Complaint •
Requires the HHS secretary to report annually to Congress on the System
reporting system, including the number of complaints, timeliness of response and resolution status Effective Date
January 1, 2010
March 23, 2010
March 23, 2010
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Changes Effective in 2011
Issue
Duals Reassignment
PDP Disenrollment
Branded Medicare Drug Discount Program
Closing the Part D Coverage Gap
Classes of Clinical Concern
OIG Report on Part D & Medicaid Drug Prices
Summary
• Authorizes the HHS secretary to establish a voluntary de minimis policy for Part D plans whose bid exceeds the benchmark to keep from reassigning Medicare/Medicaid dual eligible beneficiaries to other plans • Codifies the removal of Medicare Advantage rebates and quality bonus payments from the calculation of the low-­‐income subsidy benchmark • Creates a 45-­‐day period from January 1 to February 15 for beneficiaries who enrolled into a PDP to disenroll and return to original Medicare (without prescription coverage) • Requires all branded manufacturers to contribute 50% of a covered Part D drug/biologic’s negotiated price for Medicare beneficiaries who enter the coverage gap • Excludes low-­‐income subsidy, higher-­‐income seniors who pay income-­‐related Part B premiums ($85,000/individual and $170,000/couple), and retiree drug subsidy beneficiaries • Requires savings to be passed on at point-­‐of-­‐sale • Counts 100% of drug’s negotiated price toward an enrollee’s true out-­‐of-­‐pocket (TrOOP) calculation for purposes of reaching the catastrophic limit • Administers program through one or more third-­‐party administrators (i.e., not Part D plans) • Begins to close the Part D coverage gap for generic drugs by 7% per year until patient coinsurance is reduced to 25% in 2020 (will be incorporated into 2011 plan bids and rates) • Further closes the Part D coverage gap for branded drugs starting in 2013 until patient coinsurance is reduced to 25% in 2020 • Codifies CMS guidance that requires Part D plan formularies to include all drugs in the six classes of clinical concern (unless CMS has already created an exception to the requirement) • Authorizes the HHS secretary to identify new protected categories and classes through formal rule making Requires the HHS Office of Inspector General (OIG) to submit a report to Congress that compares drug prices in Medicare Advantage plans with prescription drug coverage (MA-­‐PDs) and stand-­‐alone PDPs to state Medicaid programs with recommendations for legislative and administrative actions
Effective Date
January 1, 2011
January 1, 2011
January 1, 2011
January 1, 2011
January 1, 2011
by October 1, 2011
Changes Effective in 2012 and Later
Issue
Part D Appeals & Exceptions
Retiree Drug Summary
• Requires Part D plans to use a single, uniform exceptions and appeals process, including use of single form if determined feasible by the HHS secretary • Requires Part D plans to provide instant access through a toll-­‐
free 800 number and website
Eliminates the tax deduction for expenses related to the retiree ©2013 Coventry Health Care, Inc. All rights reserved. Health Reform & Medicare Part D Effective Date
January 1, 2012
January 1, 2013
Subsidy
Medication Therapy Management (MTM) Programs
Health Insurer Premium Taxes
drug subsidy for employers who maintain prescription drug coverage for their Medicare Part D eligible retirees
• Codifies the requirement for Part D MTM programs to assess beneficiaries’ medication use on at least a quarterly basis to identify eligible MTM beneficiaries Ø Requires Part D plans to automatically enroll eligible beneficiaries in MTM programs (with opt out) Ø Requires plans to offer an annual, in-­‐person comprehensive medication review or use tele-­‐health technology • Imposes a new $8 billion tax on health insurers starting in 2014 that rises to $14.3 billion in 2018 • Levies the tax based on plan net premiums as percentage of total US net premiums Ø Excludes 50% of net premiums for nonprofit plans Ø Exempts nonprofit plans that receive 80% or more of their revenue from Social Security Act programs that target low income, elderly or disabled individuals Ø Exempts administrative-­‐services only (ASO) fees for self-­‐
insured employers and self-­‐insured employer plans Ø Exempts long-­‐term care insurance and Medigap plans Ø Exempts voluntary employee benefit associations Ø Exempts governmental entities ©2013 Coventry Health Care, Inc. All rights reserved. Health Reform & Medicare Part D January 1, 2013
January 1, 2014