2911.10 Medicare Prescription Drug Coverage

Part D Medicare prescription drug coverage is considered comprehensive coverage. Although specific formularies may vary, all Prescription Drug Plans (PDPs) or Medicare Advantage - Prescription Drug Plans (MA PDPs) offering coverage must offer a range of drugs in specific therapeutic drug classifications. In addition, plans must provide all or substantially all of the drugs available in certain classifications: antidepressants, antipsychotic, anticonvulsant, antiretrovirals, immunosuppressant and antineoplastics. Plans must have an appeal process in place to ensure the beneficiary receives medically necessary drugs.

A small group of drugs cannot be covered by the Part D plan and include the barbiturates, benzodiazepines, prescription vitamins, medications for weight loss/gain, and over-the counter medications. These are known as excluded drugs.

Effect of Medicare Part D on Medicaid - Medicaid will not cover Part D prescription drugs for Medicare beneficiaries as of the date the person becomes entitled to Medicare Part D. There will be no Medicaid coverage of drugs regardless of an individual’s enrollment status in a plan. Medicaid payment is based on entitlement to Part D only. Unlike coverage under Parts A and B, where the Medicaid program can supplement the Medicare payment for a covered service, coverage under Part D is considered comprehensive and Federal Financial Participation (FFP) is not available for supplemental coverage of prescription drugs. In addition, there is no Medicaid payment for drugs not covered by the individual PDP due to formulary restrictions. Supplemental coverage under the QMB program is not applicable to Part D and will not cover coinsurance and deductibles for Part D drugs. However, QMB will consider expenses of prescription drugs covered under Parts A and B.

Medicaid may continue to cover the Excluded Part D drugs listed above (see KMAP Provider Manuals for coverage information).

Entitlement to Part D - To be entitled to Medicare Part D, the individual must be entitled to Medicare Part A or enrolled in Part B. For individuals who appear to meet the provisions of 2911.2 (2) , but have not enrolled in Part B, Medicare Part D entitlement is effective as in (3)(b) below.

Effective Date - The effective date is the date the individual becomes eligible to enroll in a Medicare drug plan. It is not the date the individual is actually enrolled in a plan. For prospective Medicare determinations, the effective date of Part D entitlement is the date the individual is initially entitled to Medicare Part A or B, but not before January 1, 2006. For individuals whose Medicare entitlement determination is made retroactively, Part D entitlement begins the month the individuals received the notice of the Medicare entitlement determination.

Enrollment - The Medicare beneficiary enrolls directly with the PDP through an approved method of enrollment (e.g., mail, internet). Upon receipt of the enrollment request, the PDP will verify the individual’s eligibility to enroll through CMS. Once completed, information on the approved enrollment request will be sent to CMS within 30 calendar days of receipt of the enrollment application. Persons in an approved PACE plan (see 8300 ) will not be enrolled in Medicare Part D as their PACE provider will be responsible for all prescription medication. Persons in a Medicare Advantage plan with an approved Part D benefit will receive drug coverage through the MA PDP plan. Beneficiaries may elect to initially enroll or change plans only at certain, designated times. The Initial Enrollment Period (IEP) for new Medicare beneficiaries is concurrent with the Part B period. The IEP for Part B is the seven month period that begins three months before the month an individual meets the eligibility requirements for Part B and ends three months after the month of eligibility. An annual open enrollment period occurs from November 15 - December 31. In addition, plans must offer a Special Enrollment Period for special situations. Examples include: The enrollment period for an individual with retroactive Medicare begins the month the notice is received and continues for two additional months. An individual who moves into, resides in, or moves out of an institution has a special enrollment period. Individuals disenrolling from PACE have a special enrollment period of two months following the effective date of disenrollment. Medicaid recipients, eligible under any program, as well as those eligible for QMB or LMB may enroll in Medicare Part D or change plans at any time. Persons moving from other creditable coverage to Medicare Part D.

Enrollment Effective Date - The Part D Enrollment Date is the date the individual’s coverage begins under the plan. The PDP sponsor is responsible for establishing the effective date of enrollment. For new Medicare beneficiaries initially enrolling, the effective date is the first day of the month of Medicare eligibility if the request is received prior to the month of eligibility. Enrollment requests after the initial period or received during the annual enrollment period are effective the month following the month of request. Enrollment dates will vary during Special Enrollment Periods. Initial enrollment due to the individual’s status as a dual eligible are effective the first month of full Medicaid eligibility, but not prior to the Medicare entitlement date if the beneficiary incurred drug expenses in the prior month(s) as per item (c) below.

Auto Enrollment Process - Automatic enrollment into an approved Part D plan for all dual eligibles receiving full Medicaid coverage, those eligible only for QMB, LMB only and those eligible for subsidy will be initiated if the individual is not already enrolled in an approved plan. This includes those who have other approved employer, union or group based health coverage: For persons with Medicaid (under any program, including Title XIX, Medically Needy with spenddown met, QMB and LMB) who become entitled to Medicare, auto enrollment will be the first day of Part D entitlement. This includes persons who initially apply on or before the initial month of Medicare entitlement, even though Medicaid eligibility may not be approved until a later date. Example : A person with ongoing Medicaid become entitled to Medicare in May 2006. Auto enrollment is effective May 1, 2006 (may be retroactive if CMS fails to flag the individual timely). For persons with Medicare who become eligible for full Medicaid, auto enrollment is effective the first day of Medicaid eligibility. Example : A Medicare beneficiary is approved for full Medicaid on August 17, with coverage beginning June 1. The information on the beneficiary will be sent to CMS in the September MMA file. Auto enrollment is retroactive to June 1. For persons with Medicare who become eligible for QMB or LMB (a Partial Dual) auto enrollment is effective the second month following the month CMS identifies the individual on the auto-enrollment file. This process is also called Facilitated Enrollment. Example : A person is approved for LMB on June 5, 2006, effective May 1, 2006. This information will be sent on the June file to CMS. CMS notifies the individual the following month (July) of pending auto-enrollment to afford them the opportunity to select a plan. Auto-enrollment is effective September 1, 2006, if the individual hasn’t already enrolled. For full Medicaid beneficiaries with Medicare who had previously enrolled in a Part D plan, but disenrolled and failed to enroll in a new Part D plan, auto enrollment is effect the first day of the month after the disenrollment effective date from the part D plan. For persons with Medicare who are eligible for Part D Subsidy only, auto enrollment will be effective the first day of the month following the expiration of the beneficiary’s next open enrollment period. Example : A person is approved for Subsidy only in September 2006. The next open enrollment period is the annual election period running November 15 through December 31. Since the period ends December 31, 2006, auto enrollment is effective January 1, 2007, if the individual is given adequate time to change plans.

Retroactive Enrollment for Full Medicaid Eligibles - A special retroactive enrollment period is available to full Medicaid eligibles who will not be auto-enrolled because the beneficiary has voluntarily enrolled in Medicare Part D plan. The special retroactive enrollment is only available for months in which the beneficiary has been determine eligible for full Medicaid and the beneficiary incurred out-of-pocket prescription drug expenses. The retroactive period is effective with the first month of out-of-pocket expenses in which the individual was a full dual eligible. This special enrollment is not available to partial duals (QMB or LMB only) or to those receiving Part D Subsidy only. Persons must contact their current Medicare Part D PDP to request retroactive enrollment. Example : Bill, a Medicare beneficiary, is approved for Medicaid coverage on May 24, effective March 1. Bill enrolls in the A-1 Medicare PDP, with coverage beginning June 1. However, Bill incurred out-of-pocket expenses in the months of February, March, April, and May. The special enrollment period will allow Bill to retroactively enroll in the A-1 Medicare PDP beginning March 1. Although Bill had non-coverage drugs in February, he was not a full dual in the month of February.

Affirmatively De cline - Persons may refuse auto enrollment into a Part D plan by contacting Medicare or the PDP into which auto-enrollment has been assigned. By affirmatively declining, the individual forfeits auto enrollment. Persons who want to preserve coverage through an employer, union or group may wish to affirmatively decline coverage. However, Medicaid will not provide drug coverage to persons who affirmatively decline auto-enrollment. Persons who wish to enroll in Medicare Part D later may do so by making an enrollment request with the Part D plan.

Late Enrollment Penalty - Except for persons with approved creditable coverage described below, individuals who do not enroll in a Medicare Part D plan during the Initial Enrollment Period (IEP) will be subject to a penalty fee if they later choose to enroll. The surcharge will be compounded monthly beginning with the first month following the expiration of the IEP. Persons eligible for Medicare Part D subsidy may receive help with payment of the surcharge (see 2675 ).

Creditable Coverage through an Employer, Union or Group - Employers, unions or group health plans offering approved prescription drug plans to retirees, current employees or other Medicare beneficiaries at least as good as the Medicare Part D plan may have such plans designated as creditable coverage. Medicare beneficiaries may elect to receive prescription drug coverage through a creditable plan rather than through Medicare Part D. Beneficiaries making a formal election through CMS to receive coverage through retiree/employer plan coverage will not be subject to the late enrollment penalty if they later elect to receive Medicare Part D. However, the individual will not realize any benefits through Medicare Part D Subsidy if they elect the private health plan over Medicare Part D. NOTE : Persons enrolled in a Medicare Supplemental Plan with drug coverage may continue to receive coverage under this plan, but new enrollees will not be accepted. In addition, it is highly unlikely that any supplemental plan will meet the definition of creditable coverage above and the beneficiary may be subject to a Medicare Part D surcharge if they elect to switch coverage later. Subsidy will not provide coverage of any expenses through a supplemental plan.

Failure to Enroll - Failure to enroll in a Medicare Part D plan will not impact Medicaid eligibility or coverage. Because the exclusion of prescription drug coverage is determined by Medicare Part D entitlement, not enrollment, no additional benefits will be provided to those who fail to enroll in a plan. However, a person who elects to refuse Part D coverage may be without drug coverage.

Termination of Part D Coverage - Entitlement to Part D ends when an individual loses entitlement to both Medicare Parts A and B.