August 7, 2008

Important New Medicare Law Provisions:
a Beneficiary's Perspective (Part 1)

As we have reported previously, both the Senate and the House of Representatives voted on Tuesday, July 15, 2008, to override the presidential veto of H.R. 6331, the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), Pub. Law 110-275.

Most press reports describe MIPPA as a law that cancels the pay cuts to doctors that went into effect on July 1, but do not describe other important changes.  MIPPA also contains improvements for Medicare beneficiaries.  While these improvements are more modest than the improvements included in legislation passed by the House of Representatives last year, they are significant and provide relief for many older people and people with disabilities.

The Center for Medicare Advocacy (the Center) will publish a series of Weekly Alerts that describes the key aspects of MIPPA. This Alert, the first in that series, describes provisions of the law that have already gone into effect or that will go into effect in the near future.

Provisions effective immediately or later in Federal Fiscal Year 2009

Protections for Individuals with Low Incomes

• Section 111. Extension of Qualified Individual program.  This program, which pays Part B premiums for Medicare beneficiaries with incomes between 120% and 135% of the federal poverty levels and limited assets, is extended through December 2009.  For the calendar year 2009, the allocation for the program is increased by $100 million, for a total of $500 million.  The program expired on June 30, 2008, before MIPPA passed, but this provision reinstates the program retroactive to July 1, 2008.

• Section 114. Elimination of Medicare Part D Late Enrollment Penalties Paid by Subsidy Eligible Individuals.  Under this provision, individuals receiving a full or partial low income subsidy under Part D are not subject to a penalty for late enrollment into the Part D program.  While the provision itself is effective January 1, 2009, the Centers for Medicare & Medicaid Services (CMS) has, in the past, administratively waived the late enrollment penalty for such individuals, and will continue to do so through 2008.  The statutory provision codifies the administrative policy.

• Section 117. Judicial Review of Decisions of the Commissioner of Social Security Under the Medicare Part D Low-Income Subsidy Program.  This section corrects an oversight in drafting of the Medicare Act of 2003 the result of which was that applicants for the Part D low income subsidy did not have the same review rights that apply to beneficiaries with respect to other aspects of both Medicare and Social Security.  Recognizing the oversight, Congress made this provision effective as if included in the Medicare Act of 2003.

Additional Funding for Medicare Outreach

• Section 119(a). Medicare Enrollment Assistance.  This provision makes an additional $7.5 million  available to states for their State Health Insurance Assistance Programs (SHIPs) to undertake outreach to "subsidy eligible individuals" under Medicare Part D who have not enrolled to receive a subsidy.  It also extends outreach activities to Part D eligible individuals residing in rural areas of a state (as determined by the Secretary). Funds are to be made available for fiscal year 2009 and are to remain available until expended.

• Section 119(b). Additional Funding for Area Agencies on Aging.  This provision makes an additional $7.5 million available to Area Agencies on Aging (funded under the Older Americans Act) to provide outreach to eligible Medicare beneficiaries regarding the benefits available under the Medicare statute. Funds are to be made available for fiscal year 2009 and are to remain available until expended.

• Section 119(c). Additional Funding for Aging and Disability Resources Centers.  This provision makes an additional $5.0 million available to provide outreach to individuals regarding the benefits available under the Medicare prescription drug benefit under Part D of the Medicare statute and under the Medicare Savings Program.  Funds are to be made available for fiscal year 2009 and are to remain available until expended.

• Section 119(d). Coordination of Efforts to Inform Older Americans about Benefits Under Federal and State Programs.  The Secretary of HHS, acting through the Assistant Secretary for Aging, in cooperation with related partners, shall make a grant or contract, $5.0 million, with a qualified, experienced entity to maintain and update web-based decision support tools and systems to inform older individuals about benefits under federal and state programs.  Funds are to be made available for fiscal year 2009 and are to remain available until expended.

Access to Outpatient Therapy Services

• Section 141. Extension of exceptions process for therapy caps.  The exception process through which beneficiaries could receive additional outpatient physical therapy, speech therapy, and occupational therapy services after the payment cap was reached expired on June 30, 2008.  This section reinstates the exceptions process retroactively and extends the process through December 31, 2009. CMS's first guidance on this provision is found at http://www.cms.gov/TherapyServices/.   

Physician Payments

• Section 131. Physician payment.  MIPPA restores payment levels to those in effect before July 1, thereby reversing the 10.6 percent payment reduction, and provides for a 1.1 percent payment increase.  CMS's statement on the physician payment issue is found at http://www.cms.gov/PhysicianFeeSched/. 
  
  Important Note to Advocates:  The Office of Inspector General (OIG) has issued a policy statement to physicians and other providers whose payments were restored to pre-July 1 levels concerning collection of additional beneficiary cost-sharing that arises as a result of increased payment schedules.  The OIG says providers will not be subject to OIG administrative sanctions if they waive collection of such increased beneficiary cost-sharing for certain services that were provided between July 1 and the time it takes the Centers for Medicare & Medicaid Services (CMS) to implement the increased payment rates.  The services involved include physician services, durable medical equipment in the 10 competitive bidding areas, certain outpatient brachytherapy sources and therapeutic radiopharmaceuticals, and some ambulance services.   The policy statement does not require affected providers to waive any additional cost-sharing; it just says they will not be subject to administrative sanctions if they choose to do so.[1]

Protection against Fraudulent Marketing

• Section 103. Prohibitions and Limitations on Certain Sales and Marketing Activities under Medicare Advantage and Prescription Drug Plans.  For plan years beginning in 2009, a Medicare Advantage (MA) or Prescription Drug Plan (PDP) may not engage in certain activities, including cold-calling and door-to-door solicitation, cross-selling of related products such as life insurance or annuities; providing meals at promotional and sales events; or holding sales and marketing activities in health care settings other than at educational events.  Note:  While advocates and CMS interpret this provision as applying to the Fall 2008 annual enrollment period, some provider representatives believe the law is not effective until Fall 2009.[2]
  
  Other provisions become effective at a date specified by CMS, but no later than November 15, 2008. These provisions limit the scope of any marketing appointment with an agent or broker to topics and products that the beneficiary and agent or broker have agreed upon in advance; limit co-branding of a name or logo with the MA or PDP; limit the value of gifts and promotional items offer to potential enrollees; and limit agent and broker compensation. They also require training and testing of agents and brokers.
  
  Also for plan years beginning on or after January 1, 2009, plans are required to use only agents and brokers licensed under state law; to abide by state appointment of agent or broker laws; to report agent termination to the applicable state; and to comply with state information requests.

Access to "Cost Plans"

• Section 167. Access to Medicare Reasonable Cost Contract Plans. MIPPA extends reasonable cost contracts for plans authorized under 42 U.S.C. §1395mm(h)(5)(C)(ii) until January 1, 2010. Authority for cost plans, under which one can use doctors and hospitals in the plan's network, but services received from a non-network provider are still covered under the Original Medicare Plan, was to expire on January 1, 2009.  The GAO is authorized to study and report no later than December 31, 2009 the reasons why, if any, reasonable health plans offered as cost contracts are unable to become Medicare Advantage plans.

Clinical Laboratory Tests

• Section 145. Repeal of Competitive Bidding Demo. MIPPA repeals the Medicare Competitive Bidding Demonstration Project for Clinical Laboratory Services, effective on the date of its enactment.

Durable Medical Equipment Competitive Acquisition Program (DMEPOS)
 

• Section 154. Temporary Delay and Reform.  Upon enactment of MIPPA, contracts awarded in round one of the DMEPOS program[3] are terminated and no payment is to be made on the basis of such contracts.  Payment for DMEPOS items are to be made under previously existing schedules and payment conditions.  The Secretary is to conduct a new round of competitive bidding to begin in 2009 and include the same items for bid as in the initial competition, excluding negative pressure wound therapy items and services.  In addition, the Secretary is to exclude Puerto Rico from the new competition.[4]

Provisions Effective During Calendar year 2009

Additional Preventive Services

• Section 101. Improvements to Coverage of Preventive Services. Effective January 1, 2009, CMS may use its national coverage determination (NCD) process to add coverage for additional preventive services that have been recommended by the United States Preventive Services Task Force that are reasonable and necessary for the prevention or early detection of an illness or disability, and are appropriate for individuals entitled to benefits under Medicare Part A and enrolled in Medicare Part B.  Such services would be subject to the 20 percent co-insurance under Part B.  Also effective January 1, 2009, the Act extends eligibility for the Welcome to Medicare physical from the initial six months of Part B eligibility to the initial year, eliminates application of the Part B deductible to the initial physical, and adds services to be included in the examination.

Rental Payments for Oxygen Equipment

• Section 144(b). Repeal of Transfer of Ownership of Oxygen Equipment. Effective January 1, 2009, suppliers must continue to furnish oxygen equipment after the 36th continuous month of rental of such equipment for the remaining reasonable useful lifetime of the equipment as determined by the Secretary; payments for oxygen and for maintenance of the equipment shall continue to be made for reasonable and necessary services under the same schedule as previously.

Kidney Disease Education

• Section 152. Kidney Disease Education and Awareness Provisions.  This provision authorizes CMS, beginning January 1, 2009, to conduct pilot initiatives in 3 states to promote awareness of chronic kidney disease, focusing on prevention.

Anti-Cancer Drugs

• Section 182. Revision of Definition of Medically Accepted Indication for Drugs.  Starting in 2009, the standards for determining whether Part D will cover an anti-cancer drug have changed. Coverage can be based on a listing in one of the compendia used to determine coverage under Part D for non-cancer drugs as well as one of the compendia used to determine coverage of anti-cancer drugs under Part B, including peer reviewed literature identified by CMS.

Improved Access to Ambulance Services

• Section 146. Improved Access to Ambulance Services.  Any area that was designated as rural area for purposes of making payments for air ambulance services furnished on December 31, 2006 shall be treated as a rural area for purposes of making payments for such services for the period beginning on July 1, 2008, and ending on December 31, 2009.  This provision is effective on enactment of MIPPA.

Critical Access Hospitals

• Section 148. Clarification of payments for tests furnished by Critical Access Hospitals. Effective for services performed on or after July 1, 2009, this provision clarifies that clinical diagnostic laboratory services furnished by a critical access hospital shall be treated as being furnished as part of outpatient critical access services without regard to whether the individual is physically present in the critical access hospital or in a skilled nursing facility or a clinic operated by a critical access hospital at the time that the specimen is collected. 

MEDPAC Study on Improving Chronic Care

• Section 150. Study and Report on Improving Chronic Care Demonstration Programs.  The Medicare Payment Advisory Commission (MedPac) is to conduct a study on the feasibility and advisability of establishing a Medicare Chronic Care Practice Research Network for testing new models of care coordination and other approaches to care for chronically ill patients.  The study is to take into consideration prior work in this area, including the chronic care improvement programs commonly known as "Medicare Health Support."  The report is to be submitted to Congress by June 15, 2009.

Conclusion

MIPPA provisions correct, reaffirm, or continue vital programs and services.  Persons engaged in various outreach efforts will find the additional funding for SHIPs and other entities helpful.  Similarly, the restoration of the Medicare Savings Programs (MSP) provisions as well as restoring the exceptions process for coverage of physical therapy services extends access to necessary services and benefits for many people with Medicare. 

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