Medicare Savings Programs - Garcia Settlement

On Friday, April 23, 2010, Judge Juan R. Sanchez of the United States District Court for the Eastern District of Pennsylvania approved the settlement of a lawsuit brought by Pennsylvania low-income Medicare beneficiaries. Narcisa Garcia, et al. v. Kathleen Sebelius, et al.[1] The Garcia settlement will lower the cost of Medicare and increase access to Medicare-covered services and benefits for low-income older people and people with disabilities in Pennsylvania. Although the settlement directly affects only Pennsylvania residents, its provisions could be applied in any state willing to make the changes that Pennsylvania has agreed to make. The Garcia case was brought by Community Legal Services of Philadelphia and the Center for Medicare Advocacy.

Background

Most people 65 or older and people who get Social Security disability benefits depend on Medicare insurance to meet their health care needs. However, Medicare requires beneficiaries to pay premiums, copayments and deductibles which can add up quickly. The premium for Medicare Part B, which pays for doctor's visits, is around $100 per month in 2010 (slightly more or slightly less depending on status), or $1,200 or more for the year. Average cost-sharing, above the Part B premium, is over $2,000 per year.[2]

In Pennsylvania, to receive MSP benefits for 2010, single individuals must have an income below $1,218/month and savings of less than $6,600. Married couples must have a combined monthly income below $1,639/month and savings of less than $9,910. Income and savings amounts vary among the states, as states have some liberty to make the program rules more generous, but not less, than the federally-prescribed eligibility levels. Pennsylvania uses the federally-prescribed levels.

Three Medicare Savings Programs pay for the Medicare Part B premium; one of the three programs, the Qualified Medicare Beneficiary (QMB) program, also relieves the beneficiary of all Medicare cost-sharing obligations. The QMB program is available for individuals with incomes up to $903 per month ($1214 for a couple per month). The programs are administered primarily by state Medicaid agencies, which must coordinate with two federal agencies, the Social Security Administration (SSA) and the Centers for Medicare & Medicaid Services (CMS).

Low enrollment in these programs has been documented for decades and is variously ascribed to:

· Lack of knowledge of the programs by potential beneficiaries, the welfare department staff whose job it is to enroll them and the Social Security Administration staff who have opportunities to inform them;

· Barriers to enrollment such as complex applications and documentation requirements, language and transportation issues; and

· Data sharing issues among the three primary entities involved in administering the benefit.

The Garcia case primarily addressed issues of data sharing and the need for greater understanding of, and attention to, enrollment complexities by welfare department staff.

The plaintiffs were two individuals seeking MSP benefits, Narcisa Garcia and Sau Lin Sum So, and two organizations representing individuals eligible for such benefits, the Center for Advocacy for the Rights and Interests of the Elderly (CARIE) and The ARC of PA.

Prior to the lawsuit, plaintiff Narcisa Garcia was barely getting by on her monthly disability income of $695. Although she was found eligible for MSP to pay her monthly Medicare premium in November 2008, she was not actually enrolled into the program for another six months because of various data sharing issues. Ms. Garcia's income dropped by nearly $100 during each of those months because, in the absence of enrollment in the MSP, the Medicare premium was deducted from her Social Security check.

Sau Lin Sum So, another plaintiff, applied for MSP benefits in September 2008 but received no formal notice of her eligibility for benefits from the date of application or her eligibility for benefits retroactive to three months prior to her application, though she was eligible for both. At the time of filing of the lawsuit in April 2009, she still had not received any benefits and continued to have her Part B premium deducted from her Social Security check.

The Complaint described three groups of people and their respective situations prior to becoming eligible for MSP benefits. Some individuals are already receiving Medicaid when they become eligible for Medicare because they have reached age 65, or have completed the 24 month waiting period for Medicare eligibility required of people receiving disability benefits, or have become a citizen or lawful permanent resident for the requisite five years. Other individuals have Medicare first and are having their Part B premium deducted from their Social Security check when they learn of the MSPs and apply for benefits. A third group comprises individuals who are eligible for Medicare but may have declined Part B due to inability to pay the premium before they learn of the MSP.

A subset of any of these three groups of people comprises individuals who do not have Medicare Part A. Entitlement to Part A is an eligibility requirement for MSPs. Individuals who are not entitled to Part A premium-free, by virtue of Medicare-covered employment, can purchase Part A but the monthly premium is $461 (in 2010), a little more than one-half the monthly income for someone eligible for QMB benefits. While it is, thus, not feasible for a QMB to purchase Part A, the QMB program itself can pay for the Part A premium.[4] Policy is designed to allow the individual to become enrolled in Part A and QMB simultaneously, so the individual does not become liable for the Part A premium. Individuals whose only source of income is Supplemental Security Income (SSI) benefits are often without premium-free Part A.

Resolution of the Garcia case focused on increasing the frequency of data sharing among the relevant entities to allow for timely enrollment into the program and prompt resolution of data discrepancies that previously might have taken months to resolve. Thus, the Pennsylvania Department of Public Welfare (DPW) moved from monthly to daily data exchanges with CMS about enrollments of MSP applicants. It also agreed to submit Part A and Part B enrollments simultaneously, whereas previously it had submitted Part A enrollments only after the Part B enrollment had been verified. Plaintiffs' counsel believe that other states also operate on the premise that they must submit such enrollments serially, rather than simultaneously. This is not true.

In addition, DPW agreed to provide more training for staff to increase understanding of the program and to track and monitor resolution of data errors; it will notify applicants concerning delays in effectuating their enrollment. Each applicant for MSP benefits will be evaluated for retroactive benefits. DPW will periodically identify all individuals age 65 and older who are receiving Medicaid but who are not enrolled in Part A, or Part B, or both, and promptly submit enrollment requests to CMS. DPW will work with plaintiffs' counsel to develop written protocols, instructions and training for local staff and revised applications and notices for applicants for benefits.

In addition to the settlement agreements made during the course of the litigation, the Department identified a large group of Pennsylvania residents who were entitled to benefits but were not receiving them, and is currently taking action to enroll these individuals.

In his Order approving the Settlement, Judge Sanchez also ordered that the matter proceed as a class action, the class defined as consisting of "all persons living in Pennsylvania who are, were or will be eligible for Medicare benefits, and who are, were or will be simultaneously also eligible to have their Medicare premiums paid for by the Pennsylvania Medicaid program's Medicare Savings Program, but whose Medicare Savings Program benefits were, are, or will be denied or delayed as a result of defendants' failure to properly and efficiently administer the Medicare Savings Program part of the Medicaid program." (Complaint, ¶25)

While the Garcia settlement applies only to Pennsylvania, the procedures adopted by the state as a result could be adopted by any state. Among the most critical issues to assuring prompt enrollment and prompt resolution of data errors is the daily exchange of information between CMS and the state. Plaintiffs' attorneys were unable to discover which states exchange data more frequently than monthly, but they believe that very few do.

Plaintiffs' attorneys are interested in discussing what they learned through this case with advocates in other states wishing to improve their MSP enrollment processes.

[1] No. 09-CV01747 (E.D. Pa., Order signed April 23, 2010)
[2] Medicare Payment Advisory Commission (MedPAC), A Data Book: Healthcare Spending and the Medicare Program, June 2009 (Chapter 1 "National Health Care and Medicare Spending," Chart 1-15), available at http://www.medpac.gov/chapters/Jun09DataBookSec1.pdf (visited April 26, 2010)
[3] For detailed information about Medicare Savings Programs, see http://www.medicareadvocacy.org/InfoByTopic/MedicareSavingsPrograms/MedicareSavingsProgsMain.htm
[4] See "Can you be a Qualified Medicare Beneficiary If You Don’t Have Medicare Part A?" at http://www.medicareadvocacy.org/Projects/AdvocatesAlliance/IssueBriefs/09_10.19.QMBsWithoutPartA.pdf for detailed information about the QMB program and the process for enrolling in Medicare Part A to become a QMB.