Medicare Compliance & Reimbursement

'Extra help' may be an extra challenge in 2008

Changes in an obscure federal formula could mean the end of assistance for many Part D plan enrollees in 2008, paving the way for cash flow problems for you.

New reality: "Millions" of the most vulnerable seniors, those who are eligible for Medicare and Medicaid, will be forced to change plans in 2008, reports Vicki Gottlich, senior policy attorney for the Center for Medicare Advocacy in Washington, DC.

Why? Fewer prescription drug plans (PDPs) will meet an essential benchmark set by the Centers for Medicare & Medicaid Services (CMS).

Background: Plans can offer the low-income subsidy known as "extra help" only if their premium is at or below the benchmark premium amount set by CMS. Because of the way the benchmark is calculated this year, fewer plans have premiums at or below that amount.

Example: Health insurer Humana Inc. announced Oct. 2 that it expected to drop about 265,000 low-income participants from its Medicare PDP ranks because its 2008 premiums are above the government's cutoff.

CMS estimates that 1.6 million beneficiaries will be reassigned to different drug plans. But that projection does not include all of the dual-eligible beneficiaries who left the plan to which they were automatically assigned and mistakenly chose a plan that no longer qualifies for the low-income subsidy.

That spells trouble for beneficiaries--and for your chances of getting claims paid.

Consider these two scenarios:

Scenario No. 1: If a beneficiary received extra help this year but was enrolled in a plan that failed to meet the 2008 premium benchmark, the feds will in many cases automatically reassign the person to a PDP that can offer the subsidy.

At risk: Beneficiaries who have remained in the prescription drug plan to which they were initially assigned by CMS need to take action to prevent random automatic assignment. Otherwise, they're likely to land in a plan that is a bad match for their needs, experts say.

If you know a customer who fits into that category, counsel him that careful research is in order. Since no two PDPs are alike, it can be difficult to get to know the new plan's formulary and restrictions.

Scenario No. 2: Those beneficiaries who opt to select a different plan themselves won't be immune to problems. They won't be automatically assigned, but they could wind up missing important points about benefits as they try to decipher confusing plan documents.

"Those who cannot navigate the plan information about a change in the benefit structure will not learn until January that they have to pay more for their drug coverage," warns Gottlich.

First priority: Stress to beneficiaries that they need to find out if a plan is eligible for full premium and cost-sharing assistance. [...]