Print Friendly, PDF & Email

In 2006 the Centers for Medicare & Medicaid Services (CMS) created the “Point-of-Sale Facilitated Enrollment” (POS) process, administered by WellPoint.  The purpose of the POS is to assist people who are dually eligible for Medicare and Medicaid (dual eligibles) in filling their prescriptions at the pharmacy if they have not yet been assigned to a Part D prescription drug plan (PDP).

Effective January 1, 2010, the POS process will be enhanced by a new process for providing retroactive and temporary drug coverage for all Low-Income Subsidy (LIS) eligible individuals. The new process, referred to as the “Limited Income Newly Eligible Transition” program (LI NET or Limited Income NET), will be administered by Humana, and will do more than the previous POS system.

LI NET will operate as a temporary PDP for low-income Medicare beneficiaries who are not enrolled in a prescription drug plan and who are entitled to either prospective and/or retroactive coverage.  LI NET will cover all Part D drugs without prior authorization or other utilization management requirements, such as step therapy or quantity limits (other than FDA-required quantity limits).  Because LI NET will serve LIS-eligible individuals, there will be no premium or deductible.  There also will be no pharmacy network restrictions.

LI NET Will Have Three Responsibilities

  1. Auto-enrollment into LI NET for Dual Eligibles Who are Entitled to Retroactive Coverage

LI NET will serve as the initial PDP for full benefit dual eligibles who are entitled to retroactive coverage. This group includes people who have Medicaid and become newly eligible for Medicare, people who have Medicare and become eligible for Medicaid, and people with SSI and Medicare.  Medicare beneficiaries who are new to Medicaid and who do not have an existing PDP, Medicaid recipients who are new to Medicare and have not chosen a PDP during their initial enrollment period, and SSI recipients who do not have Medicaid and are new to Medicare will be automatically enrolled in LI NET by CMS.  The effective date will correspond to their date of Medicaid eligibility, if they had Medicare first, or to the date of their Medicare entitlement, if they had Medicaid first. For people with SSI but no Medicare, the effective date will correspond to the effective date of their Medicare eligibility.

After a beneficiary has been enrolled in LI NET, LI NET will go through the process of auto-enrolling him/her into a PDP that qualifies as a Part D “Benchmark” plan for the region in which the beneficiary lives.  Enrollment will become effective on the first day of the month following the month of LI NET enrollment.  Thus, the beneficiary will remain in LI NET only for about two months.  An individual cannot remain in LI NET beyond this two month initial coverage.

All dually eligible beneficiaries retain the option of choosing their own prescription drug plans.  Those with Medicaid who choose a PDP during their initial enrollment period before they become entitled to Medicare will be enrolled in the PDP of their choice and will not be enrolled in LI NET.  Beneficiaries who choose a PDP on their own after they have been enrolled in LI NET will be enrolled in the plan they elect, effective the first day of the month following their election of that plan.  A beneficiary election should always take precedence for future drug coverage.

The LI NET auto-enrollment process applies only to full benefit dual eligibles and to people with Medicare and people with SSI who do not also have Medicaid and who are also entitled to retroactive Part D coverage.  The existing facilitated enrollment process will remain in effect for all other eligible people who apply for LIS.

  1. LI NET at the Pharmacy Counter

When a beneficiary goes to the pharmacy to get a prescription filled or refilled, the pharmacist submits a claim through the Part D electronic claims system in order to get reimbursed by the beneficiary’s drug plan. CMS established the POS system so that LIS-eligible beneficiaries could get their medications when the electronic claims system did not show them as enrolled in any prescription drug plan. Effective January 1, 2010, the POS process will be run through LI NET. As with the previous POS system, and unlike auto-enrollment into LI NET, the LI NET POS process will be available to all LIS-eligible beneficiaries, regardless of how they became eligible for LIS.

The LI NET POS process is very similar to the earlier WellPoint POS process.  It consists of four steps:

1.      The pharmacist asks the beneficiary for a Part D identification card or information showing enrollment in a drug plan.  This could include a letter from a plan confirming enrollment or a letter from LI NET confirming auto-enrollment.

2.      If the beneficiary does not have this information, the pharmacist submits an E1 query through the Part D electronic claims system to find the plan in which the beneficiary is enrolled.

3.      If the E1 query shows no plan enrollment, the pharmacist establishes LIS-eligibility. LIS-eligibility may be established through the electronic claims system or by paper documentation from the beneficiary.

4.      Once LIS-eligibility has been established, the pharmacist submits the claim through LI NET, and the beneficiary will be enrolled in LI NET.

Proving LIS eligibility may be a sticking point for some beneficiaries.  Instructions from Humana to pharmacists[1] indicate that Medicare entitlement may be verified by pharmacists through an E1query or by calling the Medicare pharmacy eligibility hot line (1-866-835-7595).  The instructions also suggest asking customers for a recent Medicare Summary Notice (MSN) to verify Medicare entitlement, though beneficiaries have reported problems in the past when trying to use an MSN to verify Medicare eligibility.  Medicaid status or LIS eligibility can be verified by showing the pharmacist a Medicaid card, a state document or a screen from the state’s Medicaid system, or by an LIS award or announcement from the Social Security Administration.

Humana advises pharmacists to refer beneficiaries who cannot establish eligibility for Medicare and Medicaid or LIS to their State Health Insurance Assistance Program (SHIP).  Moreover, CMS indicates in a fact sheet that a Medicaid worker can call LI NET at 1-800-783-1307 to verify eligibility.[2] Humana will notify a beneficiary for whom it cannot prove LIS eligibility and ask the beneficiary to submit proof.  If eligibility is not verified, or the beneficiary is found not to be LIS-eligible, and the pharmacy treated the beneficiary as if s/he were LIS eligible, the beneficiary will be responsible for the costs that should not have been paid by LI NET.

  1. Retroactive Reimbursement through LI NET

LI NET will provide retroactive reimbursement for out-of-pocket expenditures to beneficiaries who were not enrolled in a drug plan but who were LIS-eligible.  Retroactive reimbursement through LI NET will be available to all LIS beneficiaries who are owed money, regardless of whether they are enrolled in LI NET or enrolled in another prescription drug plan. Beneficiaries may submit receipts for out-of-pocket costs to LI NET, which then has 72 hours to make a decision on the request for reimbursement.  Favorable claims must be paid within 14 days. LI NET will reconcile claims with other Part D plans so that neither the beneficiary nor the pharmacist will be inconvenienced.

Dual Eligibles and People with Medicare and SSI:  Retroactive LIS eligibility may occur if a Medicare beneficiary is awarded Medicaid retroactively; if a Medicaid recipient receives a retroactive Social Security disability award such that Medicare becomes effective immediately; or if a Medicare beneficiary receives a retroactive SSI award that does not automatically establish Medicaid eligibility.  LI NET may reimburse dual eligibles for claims up to 36 months in the past, and, in limited situations, even longer if Medicaid is retroactive for more than 36 months.

Other LIS-Eligible Individuals:  Non-dual eligible individuals may also be eligible for retroactive reimbursement of costs they paid out of pocket that should have been covered by LIS.  Claims for reimbursement for non-duals are limited to the past 30 days.

Notice of Retroactive Coverage for Beneficiaries Who are Newly Eligible for Medicaid or SSI:  CMS will send beneficiaries who are newly eligible for Medicaid or SSI a yellow notice that advises them of their automatic enrollment into a prescription drug plan and of the effective date of their Part D coverage.  CMS will use two different yellow notices, Notice 11154 (the standard auto-assignment notice) and Notice 11429. Both notices will inform beneficiaries of the drug plan to which they will be auto-assigned for future drug coverage.  Notice 11429 also contains LI NET contact information for dates of retroactive coverage, and will only be sent to beneficiaries who are entitled to such coverage.  LI NET will send a separate notice to this group explaining the reimbursement process.

Notice of retroactive coverage for other LIS-eligible beneficiaries: CMS has made no provision to send notice to other LIS-eligible beneficiaries about the process for seeking retroactive reimbursement from LI NET.  A CMS fact sheet states:

People who learn they are eligible for retroactive coverage should contact Limited Income NET at 1-800-783-1307 for information about how to get reimbursed for any covered Part D drug expenses they had during months they were eligible for retroactive coverage.[3]


The LI NET process holds promise for low-income Medicare beneficiaries.  If all new duals who are retroactively eligible for LIS are assigned to LI NET on a temporary basis, and then auto-assigned to a benchmark drug plan, the number of duals who fall through the cracks may be reduced.  This, in turn, would reduce the number of beneficiaries who need to use the POS process.  The retroactive reimbursement component of LI NET should help new duals receive reimbursement for money they spent for prescriptions.  It is unclear, however, how effective the process for retroactive reimbursement will be for non-duals who are LIS-eligible.  Such beneficiaries are unlikely to know of the process.

Beneficiary advocates should monitor the new LI NET process for its effectiveness for their clients.  The Center for Medicare Advocacy asks advocates to share with us their client and advocate experiences with LI NET, both good and bad.

[1] Limited Income Newly Eligible Transition (NET) Program, Four Steps for Pharmacy Providers, Effective January 1, 2010; [2] Limited Income NET for People at the Pharmacy Counter; [3] The Limited Income NET Program for People with Retroactive Medicaid & SSI Eligibility,

Comments are closed.