Medicare Compliance & Reimbursement

But the SPAP must be 'qualified' to be kosher.

Those unanswered questions on the Medicare Modernization Act just keep coming and coming. Here are a couple of new themes that have emerged over the past week:

Qualified, non-qualified? What's a SPAP to do? Come January, all Medicare recipients, including those who also receive Medicaid assistance, will be eligible for Medicare's new Part D drug coverage.

But over the past several years, as many elderly and disabled people struggled to pay for their medications, states have established state pharmacy assistance programs to provide such assistance.

Under the new Part D, SPAPs are permitted to continue offering such assistance, coordinating their aid with the Medicare drug benefit, and many states are expected to do so in the face of high drug-spending needs among the elderly population.

Under the conventional wisdom, there was one primary way in which SPAPs would wrap around Medicare. MMA rules specify that a SPAP's assistance to a beneficiary will only count toward that beneficiary's out-of-pocket spending limit if the SPAP becomes a "qualified" wrap-around plan. To help beneficiaries reach their out-of-pocket limits sooner and thus qualify for the federal government's catastrophic coverage, states were generally expected to opt for this approach.

There's just one catch, however, said the Medicare Rights Center's Andy Cohen at a March 29 Medicaid forum in Washington. To be a "qualified" plan, SPAPs must not auto-enroll their beneficiaries into a single Part D prescription drug plan.

The law won't permit that, however, in the interest of fostering competition among a wide range of Part D drug plans, according to a Centers for Medicare and Medicaid Services guidance.

"The MMA prohibits [SPAPs] from counting their financial contributions as true out-of-pocket costs if they automatically enroll beneficiaries into a preferred plan. ...

The law intends that all Part D plans in a state be given comparable opportunities, promoting competition among Part D plans," the guidance states.

So, according to scuttlebutt, some SPAPs may be about to make a surprising decision, said Cohen. Feeling that they'll have a better chance to work seamlessly with only one PDP to ensure that beneficiaries get the best deal possible, they could very well forgo counting their financial contributions toward beneficiaries' OOP costs - and auto-enroll their beneficiaries in a single PDP regardless.