Sailing a safe course through the implementation of the Medicare Modernization Act (MMA) and Part D will require expert navigation in uncharted waters. Is your facility ready?

Editor’s note: This is the first of a series of articles in ECPN that will explore the impact of the Medicare Modernization Act (MMA) on your facility, the patients you serve, and the facilities with which you work.

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hen the Medicare program was enacted into law in 1965, its intent was to improve access to medical care for our nation’s elderly and disabled. For legislators and the public at that time, “medical care” consisted mainly of services provided by physicians and other healthcare professionals (ie, those with a deemed status as “providers”), most often in the hospital setting. The focus was on intervention, not prevention, and no one imagined that medications (or pharmacists, for that matter) would play a large enough role to require coverage of medications or designation of pharmacists as providers under the law.
       Fast forward to the new millennium. State-of-the-art medication therapies that were hardly imaginable in the mid-1960s are savings lives, curing disease, reducing hospitalization, improving public health, and reducing healthcare expenditures. Pharmacists, physicians, and the multidisciplinary team are collaborating as never before in the development of medication treatment plans across the spectrum of care. Medication intervention has changed the face of medical care for many disease states, such as diabetes, hypertension, heart failure, lipid disorders, Alzheimer’s disease, and mental illness.
       But for our Medicare beneficiaries, the program has not kept pace with these advances. Medicare has only paid for medication treatment in hospitals and other acute care settings or when administered by physicians in outpatient settings. Seniors have relied on an unreliable system of employer-funded retiree benefits, supplemental policies, senior discount plans, or, in many cases, no coverage at all. Advances in medication technology do not benefit those who cannot access medication therapy. With the passage of the Medicare Modernization Act (MMA) of 2003, Congress created a new sub-part of the Medicare Act, Part D, which will offer beneficiaries a comprehensive drug benefit and take effect January 1, 2006.

Eligibility

       According to government estimates, those eligible for the Part D benefit are the approximately 35 million Medicare beneficiaries who are over age 65 and approximately 7 million disabled Medicare beneficiaries who are under 65 years of age. The cost of the program over 10 years is estimated to be $800 million. The benefit will be structured to provide economic assistance to those with low incomes as well as those who are Medicaid beneficiaries (ie, the “dual eligibles”). Beneficiaries residing in nursing facilities and other defined long-term care institutions, such as developmentally disabled group homes and intermediate care facilities, will enjoy special provisions under the law.
       For healthcare professionals working in extended care settings, a significant portion of patients will be eligible for the new benefit. The program will be voluntary for Medicare-eligible individuals living in nursing facilities, assisted living facilities, and facilities for the mentally retarded and developmentally disabled (MRDD) who are private-pay or have other “creditable” prescription medication coverage. The program will be compulsory for Medicare-eligible individuals who are also covered by Medicaid (the dual eligibles). Mostly, these dual eligibles will reside in nursing facilities, MRDD facilities, and group homes, although some may reside in assisted living facilities under state Medicaid waiver programs.

Infrastructure

       The MMA Part D benefit will be administered via new entities called Prescription Drug Plans (PDP) and also through Medicare Advantage plans (MA-PDs). The plans will be risk-sharing entities that are responsible only for the provision of medications covered by the benefit. Medicare Advantage Plans are healthcare plans that will not only provide covered medications but are also responsible for all healthcare services for covered individuals. These entities are licensed by the Centers for Medicare & Medicaid Services (CMS) for administration of the benefit, and the process by which CMS determines eligibility for a PDP or MA-PD license is extensive and, of course, incredibly complex. These are essentially insurance providers operating in a for-profit environment, enrolling eligible Part D beneficiaries and administering the Part D benefit. The Centers for Medicare & Medicaid Services has in place a process to assure that these entities treat beneficiaries fairly, adequately meet their medication needs, do not discriminate against special populations (eg, nursing home patients and the mentally ill), and implement processes to perform medication management services that foster positive health outcomes from medication use.
       The agency has created PDP regions and MA-PD regions. (For a state-by-state breakdown of these plans, visit http://www.medicare.gov/medicarereform/map.asp). It originally mandated that there be at least two plans to choose from in each region. On September 23rd, 2005, CMS released information on the PDP and MA-PD plans that were licensed to provide the MMA Part D benefit. There are at least 2 approved plans in every state, between 11 and 20 organizations offering prescription drug plans in each region, and 10 organizations that will be offering nationwide medication coverage. Also, every state but Alaska has at least one prescription drug plan with a monthly premium of less than $20. (For more information, visit http://www.medicare.gov.)

Costs and Benefits

       According to CMS, a “standard benefit” applies to eligible individuals who would voluntarily enroll and would not receive low-income assistance. The standard benefit would have the usual monthly premium and a yearly deducible of up to $250. The premium and the deductible can vary according to each plan, but they must be equivalent to the standard plan. The Centers for Medicare & Medicaid Services has announced that the average monthly premium across all providers and all plan types is $32.20, which is about $5 less than what was previously estimated. Assuming payment of the monthly premium, once the deductible has been met, the standard plan will pay 75% of medication costs for plan-covered medications (which will be explained later in the article) up to $2,250.
       The Part D legislation also contains a coverage gap (commonly referred to as the “doughnut hole”) during which the beneficiary pays 100% of medications costs between $2,250 and $5,100. Once the beneficiary has reached $3,600 in out-of-pocket expenses and total medication expenses exceed $5,100, the catastrophic coverage sets in for the balance of the calendar year and the plan pays for 95% of medication expenditures (with the individual responsible for 5%). Plans may vary the terms of their coverage, but CMS will hold them responsible for keeping their coverage equal to the CMS standard plan.
       Plans may also use formularies to infuse cost containment into the mix—which has sparked intense debate—to assure that plan formularies offer a large enough range of medications to meet beneficiaries’ needs and that special populations (eg, nursing home patients) receive the medications they require. The Centers for Medicare & Medicaid Services has required that, if plans use formularies as cost containment measures, the formularies need to be administered by a Pharmacy and Therapeutics committee. This committee consists of pharmacists and physicians of which at least one member is independent of conflicts of interest and another is an expert in geriatric medication therapy (eg, a Certified Geriatric Pharmacist, or CGP).
       This, of course, interests healthcare providers in extended care settings, as many patients (especially those in nursing and MRDD facilities) cannot afford such benefits or currently receive medications covered by state Medicaid agencies). The Centers for Medicare & Medicaid Services has provided assistance for low-income individuals, and based on income and assets, these up-front costs, deductibles, and coverage gaps can be reduced (and, in some cases, eliminated). Let us now take a closer look at the implications of the Part D benefit for extended care patients.

Implications For Extended Care Facilities

       Understanding the special needs of Part D beneficiaries in nursing homes and other institutions, CMS has required that the PDPs and MA-PDs engage long-term care pharmacy providers within their pharmacy networks to assure that institutionalized patients can receive the special level of services that they need and are accustomed to receiving. The agency requires that the plans have an extensive network, and the long-term care pharmacies within the plan network meet special criteria for minimum performance and service.
       A basis for considering the implications of Part D in extended care settings lies in CMS’ definition of “institution.” The agency has stated that Part D beneficiaries living in long-term care institutions require special considerations relative to enrollment, costs, and benefits. It has defined “institution” as a licensed nursing facility or an MRDD intermediate care facility or group home. Assisted living buildings are not considered institutions and, as such, assisted living facility residents do not generally enjoy these special considerations. For all dual eligible individuals currently receiving medication benefits from state Medicaid agencies, Medicaid coverage will cease on January 1, 2006, when the Part D benefit takes effect.
       In institutional settings, Part D beneficiaries are exempt from regular enrollment rules, and they may change their plans at will; the changes take effect the first day of the following month. Assisted living facility patients will be bound by routine periods during which they may elect in or out of plans. If they have not enrolled previously, dual eligible patients in institutions will be automatically enrolled in a plan by CMS by December 31, 2005. This automatic enrollment is necessary because their Medicaid benefits will terminate, and CMS wants to assure that all dual eligibles have Part D coverage when the program begin.
       With regard to costs, dual eligible patients in institutions are not subject to any cost risk. They are exempt from premiums, deductibles, and any tiered co-pay arrangements the PDPs and MA-PDs may have in their plans. Non-dual institutional patients will participate in any cost risk that is imposed by their plans. Most assisted living facility residents will not be considered low-income and will participate in the cost risk of their plans—unless they are dual eligible state Medicaid waiver participants, in which case they will also be exempt.
       Part D beneficiaries residing in institutions will be serviced by network long-term care pharmacy providers that meet minimum performance and service criteria. Beneficiaries residing in assisted living facility settings may be serviced by any pharmacy with a contract with the PDP or MA-PD.
       As previously stated, plans may elect to infuse cost-sharing measures into their plans—and one of these measures is maintenance of a formulary. National geriatric professional organizations, such as the American Society of Consultant Pharmacists (ASCP), the American Medical Directors Association (AMDA), and the National Association of Directors of Nursing Administration/Long Term Care (NADONA/LTC), have urged CMS for strict formulary guidance for plans to assure that nursing home patients have access to necessary medications. In addition, some long-term care pharmacies have negotiated with prospective plans to encourage a wide range of available medications and dosage forms. Many plans have agreed to more open formularies, but they enforce some additional co-pay requirements. The implications of these formulary restrictions for dual eligible beneficiaries in institutions will be small, since dual eligibles are not subject to cost risk. These restrictions may be of importance to non-dual institutional beneficiaries and assisted living facility patients.
       A provision of the MMA that specifies by legislation that some classes of medications will not be covered raises a significant access issue. Thus, plans can completely exclude from their formularies nonprescription medications, benzodiazepines, barbiturates, weight loss and weight gain products, fertility drugs, and prescription vitamins and minerals. The future of how beneficiaries will receive these medications is unclear. It is also apparent that many patients in extended care settings will receive these medications. Some state Medicaid agencies have covered some or all of these classes, and CMS has indicated that these agencies should continue to provide coverage for dual eligible beneficiaries.
       As of this writing, approximately 30 states had indicated their willingness to do so; the rest remain undecided. Some plans may allow coverage for these medications even though they cannot get reimbursed from CMS, realizing that, without coverage, more expensive medications that are covered may be used. Additionally, there may be some legislative support to reinstate these medications. In any event, the future availability of these uncovered Part D medications is unclear.

Additional MMA Benefits

       The MMA outlines additional benefits to Part D beneficiaries aside from prescription medication coverage. The legislation provides for wellness and screening opportunities when beneficiaries initially enroll and then periodically throughout their enrollment. Also contained in the legislation is the Chronic Care Improvement Act. This part of the legislation recognizes the burden that multiple chronic comobidties can place on many Part D beneficiaries. It outlines quality improvement infrastructure and provides benefits to assure that not only are medications provided to beneficiaries, but that there are services to assure that these medications are used correctly and that use is studied to determine and foster appropriate medication outcomes.
       Under this section of law, CMS has mandated that each PDP have in place a Medication Therapy Management Program (MTMP), which targets high-risk individuals within Part D beneficiaries and provides clinical intervention services to foster appropriate medication use. These services will be provided by pharmacists and prescribers, and each MTMP has to be approved by CMS. The agency has granted the PDPs wide latitude in determining which beneficiaries are “high-risk,” which services will be provided under the MTMP, and which healthcare professionals (under which conditions) will be able to provide and be reimbursed for MTMP services. As Part D is implemented, this will be an area that all stakeholders will be watching carefully to determine what services are being offered, how they are being provided and reimbursed, and which MTMP intervention models yield the best clinical outcomes.

Challenges for Providers and Beneficiaries

       To paraphrase, the MMA challenge is communication, communication, communication. The Centers for Medicare & Medicaid Services is struggling to communicate the complexity of the Part D benefit to PDPs and providers, and PDPs and providers will struggle to communicate those same complexities to a wide and varied audience of nursing facilities, assisted living facilities, MRDD and psychiatric facilities and group homes, and the general geriatric public at large. Each of these sites will have its own special slice of the communication pie, and pharmacy providers will face the monumental task of communicating and working with everyone in the mix.
       Nursing facilities will have dual and non-dual patients, representing voluntary and mandatory Part D enrollees. There will likely be a multiplicity of PDPs and plans to deal with. Nursing home patients will have special enrollment periods and may be likely to switch PDPs often. Nursing facilities will now be dealing with approved specialized long-term care pharmacies exclusively for their Part D patients. Some PDP policies and procedures may be at odds with CMS’ State Operations Manuals governing quality and patient safety in nursing facilities. Medication Therapy Management Program services may overlap and be confused with the traditional Drug Regimen Review Services mandated by CMS.
       Assisted living facilities that may think of themselves as long-term care are defined by MMA as not “institutional,” and their patients as “community dwelling.” Therefore, they will have limited enrollment periods, and providers will struggle with a multiplicity of possible PDPs and plans, pharmacy services that will not be limited to only CMS-approved long-term care specialty pharmacies, and communication and infrastructure in the assisted living facility setting that may be different from that of nursing facilities.
       Psychiatric and MRDD nursing facilities and group homes may fall into several cracks. The Centers for Medicare & Medicaid Services has designated that these are long-term care “institutions” and available for special consideration in enrollment. However, the Part D eligibility of these residents presents a cloudy picture with respect to how many traditionally Medicaid-serviced patients are also Medicare-enrolled under disability parameters (ie, dual eligibles). This leaves the extent to which Part D will impact these facilities and patients unclear.
       These challenges, along with revisions to sections of the State Operations Manual of Pharmacy Services and Unnecessary Medications (which will become effective in 2006), may create a perfect storm of uncertainty for extended care facilities.

Weathering the Storm

       The key to weathering this storm is information, communication, and cooperation. One of the great benefits of working in the extended care environment is its multidisciplinary character. When we work as a team, we do the best for our patients. Successful implementation of MMA is not just a pharmacy issue. It is a patient issue. Like all patient issues in extended care, it takes the team, all rowing together, to navigate a true course. The Quality Assurance committee should take ownership of Part D implementation in nursing facilities, gather the team, and create an action plan that depends on the individual strengths of each team member. In other practice areas, a champion may need to come forth and take ownership of MMA implementation and rally the stakeholders. Your consultant and senior care pharmacists have explicit and detailed knowledge of the MMA and, as you read this, are ready, willing, and able to assist your team in surviving the storm.