Adult Medicaid and State Supplementation1/1/10

Volume IVAOMTL-349

Adult Medicaid and State Supplementation1/1/10

MS4390MEDICARE PART D

Medicare Part D is the prescription drug plan offered to individuals receiving Medicare A and B. There are multiple companies who offer Part D plans, at various costs and benefit levels. Low income individuals can apply for “Extra Help” with the cost of this plan through Low Income Subsidy (LIS). LIS is a federal payment that is equal to the average cost of a basic Part D plan in each state and is adjusted annually according to premium cost. If a person receiving LIS enrolls in a Medicare Part D plan which has a premium higher than the LIS payment, the beneficiary is responsible for paying the difference in the premium. Individuals who receive any form of Medicaid, including Medicare Saving Plan (QMB, SLMB and QI1) automatically meet the criteria for LIS.

The Social Security Administration’s (SSA) definition of dual eligibility is an individual who receives Medicare Part A and/or Part B and some form of Medicaid benefit at the same time. Partial duals are those receiving cost sharing assistance under Medicare Savings Program (QMB, SLMB or QI1). Full dual eligibility is and individual that receives Medicaid. Individuals that receive either dual or partial dual eligibility are deemed as qualified for LIS. Qualified individuals who are not already enrolled in a Part D plan are automatically enrolled with LIS for the full calendar year. Dual eligibility includes the receipt of Medicaid by way of spend down Medicaid coverage. Even if the spend down card is received for only one month, the receipt of Medicaid for that one month qualifies the individual for LIS benefits through the end of the calendar year,which exempts recipients fromthe “Donut Hole” for the remainder of the current calendar year.

Note: The “Donut Hole” is as follows;once the total retail cost of covered medications reaches the allowed amount for that calendar year, the participantsenter a coverage gap and are responsible for their prescription costs until they meet the obligated amount for that calendar year. This period is referred to as the “Donut Hole”. Once an individual passes the “Donut Hole” period, they enter into the last phase of the Medicare Part D program. During this phase Medicare Part D will pay at a higher amount than before the coverage gap.

Individuals who receive Medicaidfor nursing facility stays are qualified for Medicare Part D and therefore, automatically eligible to receive LIS and will be auto enrolled if they have not opted out of Medicare Part D. Once enrolled in a Part D plan, these individuals do not have co-pays and do not have a “Donut Hole” period. If the individual has a Part D plan upon entering the nursing facility, their Part D provider is notified of the change in their status automatically qualifying them for LIS. This change in status could take several months and until the change is completed the incurred co-pays and premiums are to be used as a medical deduction in calculating patient liability. Field staff must spot check case to verify and remove these deductions after two months of continuous stay in the nursing facility. If theindividual selected a plan with a higher premium than the LIS payment, the difference can be given as a medical deduction through the end of the calendar year. Note: Individuals receiving Medicaid for HCBS waiver services will continue to be responsible for co-pays.

Full benefit dual eligible for LIS may opted out of or affirmatively decline auto enrollment into a Part D plan. The primary method for doing so is by calling 1-800-MEDICARE, but they can also call the provider of the Part D plan which they have been assigned. If the member has opted out of Medicare Part D, Medicaid will not pay for the individual’s prescriptions and the prescription expense cannot be given as a deduction to reduce patient liability. However, the current cost of the prescriptions or the amount of those still owed can be used to reduce the individual’s portion of liability for a spend down case. Individuals who opt out do not permanently surrender their eligibility for enrollment in a Part D plan. Those eligible for LIS can re-enroll at any time, they are not limited to open enrollment.