Dentistry Advocates Aim for Medicare Benefits

Leave a comment

Dentist Photo

Carolyn Thompson’s tight-lipped smile hides a health care problem the 81-year-old retired nurse cannot afford to correct and that Medicare will not cover.

She needs dentures. Her missing bottom teeth make chewing difficult, so she avoids most of the fresh fruits and foods that provide valuable nutrients. Thompson has not seen a dentist for many years.

“While working I always took care of my teeth, but in the last couple of years have found it difficult to pay for care,” said Thompson.

Thompson’s predicament is common. About 1 in 5 people 65 and older have untreated dental problems. But Medicare rarely covers dental care and fewer than half of elderly Americans see a dentist even once a year — often because they cannot afford to — according to a Johns Hopkins University study published in Health Affairs last year. Just 12 percent of Americans over 65 have dental insurance, that study reported.

Dental benefits were not recognized as a priority when Medicare was enacted in 1965. Back then, nearly half of Americans ages 65-74 had lost their natural teeth; today, 87 percent in that age group still have some or all of their teeth, according to the American Dental Association.

Research shows that untreated dental problems can exacerbate health problems such as diabetes and heart disease, leading to costlier bills for Medicare. That’s why a nonprofit think tank devoted to improving oral health is working toward an audacious goal: Medicare-paid dental care for America’s seniors.

The Santa Fe Group’s objective looks daunting in post-election Washington, where repealing the Affordable Care Act and cutting federal health spending are priorities for both the Trump administration and Congress’ Republican leadership.

Moreover, the costs of expansion would be significant. Such a benefit would likely be heavily used in an aging America whose 65-and-older population is projected to grow at least 30 percent by 2030. Also, while dentures were (and are) relatively inexpensive, newer techniques to preserve natural teeth, such as dental implants, are costly.

The Santa Fe Group’s members include academics, dental industry executives and former government officials. Among the sponsors are Colgate-Palmolive, DentaQuest and Henry Schein.

Santa Fe understands the uphill climb for coverage, but its sights are set on on its strategy to start building public demand for a Medicare dental benefit spearheaded by Dr. Claude Earl Fox, a former senior health official in the Clinton administration.

“We have a long road to go, but we think it’s doable and there will be a growing audience for this,” said Fox, who worked as a professor at both Johns Hopkins and University of Miami medical schools after his career in federal government.

The Johns Hopkins study estimated a dental benefit could cost from $4.4 billion to $16.2 billion a year, depending on what is covered, how much seniors pay out-of-pocket and the level of premium subsidies provided to low-income beneficiaries.

“Most of the talk in Medicare reform is how do we reduce cost rather than expand costs, and adding a dental benefit can make people [on Capitol Hill] very nervous,” said Amber Willink, the study’s lead author and assistant scientist at the Johns Hopkins Bloomberg School of Public Health.

Prescription drugs were the last major benefit Congress added to Medicare. That was in 2006 after more than a decade of pleading from advocates.

Without Medicare to help, seniors have few options to get comprehensive coverage. Private coverage is typically too expensive for many seniors.

Medicare Advantage, private plans that cover about one-third of seniors, sometimes offer a limited dental benefit for additional costs but typically only for a small network of dentists.

“It is important to show a benefit can be structured to save money for Medicare,” Fox said.

Supporting evidence from large studies is limited, however. It is uncertain whether the Congressional Budget Office — the official scorekeeper on federal legislation — would agree with the dental industry’s savings estimates from a Medicare benefit.

Politics aside, some advocates point to firsthand experiences to show that older adults’ health improves with regular dental care.

A retirement community in Alabama, which includes a nursing home and an assisted-living facility, added a dental clinic in 2012. Pneumonia rates dropped soon after, said Lillian Mitchell, a dentist who oversees the office and is the director of geriatric dentistry at the University of Alabama, Birmingham. Mitchell and other faculty oversee dental students who treat patients at the clinic.

“Taking care of oral health affects their overall health by reducing inflammation that has been linked to heart disease, diabetes and other chronic conditions common to the elderly,” Mitchell said.

The clinic’s services cost about half the price of private dentists.

Patients say easy access to the clinic in the building where they live makes a big difference. “This is such a comfort knowing we can go to the dentist without having to leave the facility,” said Peggy Batcheler, 87, a former nursing professor. “We feel so fortunate.”

The Santa Fe Group hopes to draw the American Dental Association, AARP and other seniors’ groups into its campaign for a Medicare dental benefit.

“It is not our No. 1 issue, but it is on top of our conversation list,” said Joseph Crowley, a Cincinnati dentist and president-elect of the American Dental Association. He is very optimistic.

 

Does Your Insurance Cover Alzheimer’s Care?

Leave a comment

Senior man sitting on a wheelchair with caregiverOne in eight individuals 65 and older suffers from Alzheimer’s disease –quite a sobering statistic for the growing number of baby boomers rapidly crossing that age threshold. And the costs can be an “overwhelming financial burden,” says Carol Steinberg, executive vice-president of the Alzheimer’s Foundation of America.

Private and government insurance programs may cover some costs. Here’s a primer on your options.

Medicare

Many people are shocked to discover that Medicare does not cover the long-term custodial care that Alzheimer’s patients need. Custodial care is the non-medical care associated with activities of daily living, such as bathing and dressing.

Medicare does cover limited care in a nursing facility or at home. For home care, the patient must require skilled-nursing care or physical or occupational therapy to help with the recovery from an illness or injury — not to help an Alzheimer’s patient with daily-living activities. “One of the most difficult situations is when a loved one needs personal or custodial home care, but Medicare will only cover that if there is some type of skilled-care need,” says Frederic Riccardi, director of programs and outreach for the Medicare Rights Center, an advocacy group.

At-home services in most cases can be provided for fewer than seven days each week or less than eight hours each day over a period of 21 days or less. Limited custodial care could be provided during these visits — perhaps if an Alzheimer’s patient treated by a registered nurse for a broken hip needs help bathing. Medicare pays the cost of a skilled-nursing facility, but only to provide continuing treatment following a hospital stay of at least three days. Skilled care in a facility is limited to 100 days.

While Medicare offers little by way of custodial care, it does provide diagnostic and medical treatment that Alzheimer’s patients need. The new annual wellness physical exam, which is free and part of the health care law, includes testing for cognitive impairment. “This is a critical, yet hardly known, provision,” Steinberg says. Medicare also covers visits to a geriatric assessment clinic.

Alzheimer’s patients and their families need to carefully choose a Medicare Part D prescription-drug plan or private Medicare plan. Alzheimer’s medications are generally covered under Part D, but plans vary regarding co-payments. The Alzheimer’s Association offers a guide about coverage for common Alzheimer’s drugs.

If you choose a Medicare Advantage plan, make sure your neurologist and other physicians you see often are covered as in-network providers. Otherwise, you will pay higher out-of-pocket costs or ask about Medicare supplement plans.

Long-term-care insurance

These policies provide coverage for the custodial care that Alzheimer’s patients usually need. Benefits typically trigger if the patient needs help with at least two activities of daily living or if a doctor provides evidence of cognitive impairment. Because most people with Alzheimer’s receive care in their own homes, look carefully at the policy’s home-care requirements. Typically, a patient must wait 60 or 90 days before benefits begin. But policies differ on when the clock starts ticking, which could be a big headache for caregivers. 

Some long-term care insurance policies start the 60-day waiting period on the day the doctor certifies the cognitive impairment — and benefits trigger 60 days later. But other policies count only the days a patient receives care from a qualified caregiver during the waiting period. If the caregiver visits two days a week, the policy only counts those two visits toward the 60-day waiting period — and benefits will not trigger for 30 weeks. In the meantime, the family has to pick up the tab for the caregiver.

Before you hire a caregiver, check the policy’s fine print on the type of caregiver the insurance company will cover. Some policies pay for any caregiver who is not a family member, while others only pay for licensed caregivers who work for an agency. Some families who hire an unlicensed caregiver later discover that the caregiver doe not qualify under the policy.

Do not expect a policy to pick up round-the-clock home care. Daily coverage is based on the daily benefit. A policy with a $200 daily benefit, for example, will likely cover the cost of eight to ten hours of a home health aide. If a family caregiver cannot fill in the gap, a nursing home may be a better option.

You cannot use more than your daily benefit in a day, but you can stretch your daily benefit over longer periods. Say you choose a benefit period of three years, at $200 a day. If you only use $100 a day, your coverage can last for six years. Some policies cover adult day care, which can cost a lot less than daily caregivers. “Many adult day services specialize in care for those with Alzheimer’s disease and similar disorders,” says Kathy O’Brien, senior gerontologist with the MetLife Mature Market Institute.

An alternative and more cost-effective option for long-term care insurance in today’s expensive health care environment is a short-term custodial care policy.

Medicaid

This program, whose costs are shared by federal and state governments, is the primary payer of long-term-care services for the elderly. Unlike Medicare, it provides custodial care for Alzheimer’s patients. Custodial care typically is provided in Medicaid-eligible nursing homes, but many states’ Medicaid programs now pay for home care and sometimes adult day care or care in assisted-living facilities, says O’Brien.

 

The downside: You need to be virtually impoverished to qualify. Many people end up qualifying after spending their retirement savings on care. While state laws differ, generally you cannot have more than $2,000 in countable assets, including investments. A spouse who lives at home can generally keep about $113,000. You’re allowed to keep your home, car and assets in certain kinds of trusts. (Visit www.medicaid.gov to find eligibility requirements in your state.)

To protect more of your assets, you can buy a state-approved long-term-care policy that is “partnership” eligible. The policy would allow you to qualify for Medicaid without having to spend almost all of your money first. For example, if you buy a partnership policy that covers $200,000 of care, you would pay out of pocket until you have $200,000 left and still qualify for Medicaid. Go to the National Clearinghouse for Long Term Care Information to see if your state allows these policies.

 

 

 

 

When Medicare Does Not Alleviate Enrollment

Leave a comment

Cute couple smilingCindy Hunter received her Medicare card in the mail last Spring and she did not know much about Medicare. She and her husband, retired teachers who live in a Philadelphia suburb, decided she did not need Medicare because she shared her husband’s retiree health insurance plan. 

We were so thankful we had good insurance,” she said. So she sent back the card, telling officials she would keep Medicare Part A, which is free for most older or disabled Americans and covers hospitalization, some nursing home stays and home health care. But she turned down Part B, which covers doctor visits and other outpatient care and comes with a monthly premium charge. A new Medicare card arrived that said she only has Part A.

When Stan Withers left a job at a medical device company to become vice president of a small start-up near Sacramento, California, he took his health insurance with him. Under a federal law known as COBRA, he paid the full cost to continue his coverage from his previous employer. A few years earlier, when he turned 65, he signed up for Medicare’s Part A. With the addition of a COBRA plan, he thought he didn’t need Medicare Part B.

Hunter and Withers now know they were wrong and are stuck with medical bills their insurance will not cover. Hunter called it “an honest mistake” and said there was nothing in the written materials she and her husband received indicating that if they had Medicare Part A, his retiree coverage could not replace Medicare Part B. Withers had no idea he made a bad choice.

Thousands of seniors unwittingly make similar mistakes every year, believing that because they have some type of health insurance, they do not need to worry about signing up for Medicare Part B. Generally, insurance other than that provided by a current employer will not exempt them from Medicare’s strict enrollment requirements. Seniors’ advocates and some members of Congress want to fix the problem, backed by a broad, unlikely group of unions, health insurers, patient organizations, health care providers and even eight former Medicare administrators.

Medicare’s Part B enrollment rules have not changed since the program was created in 1965. Seniors can enroll only when they first become eligible — usually three months before and after the month they turn 65 — or when their job-based insurance ends. If they miss this opportunity, they have to wait until the months of January through March to enroll and then coverage only begins July 1. Most will not be allowed to buy any other health insurance policy during that time.

And if they delay signing up for 12 or more months after becoming eligible, many will be hit with a permanent penalty added to their Part B monthly premium. In 2014, about 750,000 beneficiaries paid late penalties, raising their Part B premiums an average of 29 percent, according to the Congressional Research Service.

“The rules have not changed, but our lives have,” said Joe Baker, president of the Medicare Rights Center, an advocacy group that is leading the effort to update the enrollment process. When Medicare began, the government wanted seniors, especially younger and healthier people, to sign up quickly and so the deadlines and late penalties were incentives to get them in the program.

But these days more seniors work past the Medicare eligibility age, get health insurance through their employer or their spouse’s, or have individual health insurance coverage, Baker said. The problem is not that people are going without insurance. “The confusion that we really see is with how Medicare interacts with other insurance coverage,” he said.

Hunter, 62, became eligible for Medicare earlier than 65 because she gets Social Security disability benefits. She’s receiving two chemotherapy drugs to control ovarian cancer. This fall her oncologist’s office told her there’s “something going on with your insurance,” she recalled. After many calls to her husband’s retiree plan, Social Security, Medicare and even her congressman, she learned that her insurance would only pay a share of the bills for her treatments after deducting the amount the insurer said was Medicare’s responsibility. “But Medicare isn’t paying because I don’t have Part B,” she said. So Hunter is responsible for that portion.

Withers thought the health plan he purchased through his old employer would count as job-based coverage, but COBRA is not a substitute for Medicare Part B, a point no one mentioned when he submitted his paperwork. He should have signed up for Part B when he left his previous job.

“How could there be a rule that no one knows about?” Withers asked.

In addition, the private plan has refused to pay thousands of dollars in medical bills because the company argued that he should have had Part B and those are Medicare’s responsibility.

Confusion over COBRA is just one of many reasons that people miss their opportunity to enroll in Part B. Others think, incorrectly, that getting Veterans Health Administration benefits, job-based health insurance from a company with less than 20 workers, retiree coverage from a former employer, or individual health insurance coverage exempts them from Part B’s lifetime late penalties and waiting periods with no insurance.

To help seniors avoid such mistakes, bipartisan legislation has been introduced in both the House and Senate that would allow people who miss their initial Part B enrollment deadline to sign up in the fall, when millions of seniors already in Medicare are choosing private drug or medical plan changes. Part B coverage would begin the month after they enroll. It would also allow most people who enroll late to apply for retroactive coverage to their initial eligibility date and request a waiver of the late penalties if they can prove they were misled (currently, an exemption may be based only on misinformation from a federal government representative, i.e. Social Security or CMS).

“Because I didn’t ask Social Security and they did not provide any wrong information, there was nothing they could do,” Hunter said. “They said if they had given me the wrong information, they might be able to do something.”

Seniors “should not face penalties or gaps in their Part B coverage simply due to bureaucratic snafu,” said Rep. Patrick Meehan, R-Pa., who co-sponsored the House bill. “I’ve had seniors contact my office and say they simply had no idea of existing deadlines — or that they faced penalties down the road for missing them.”

The legislation also would require Medicare officials to notify all Americans prior to their 65th birthday about signing up for Medicare. Currently, the federal government and some states notify only those 64-year-olds who have health insurance though the Affordable Care Act’s marketplaces.

Although the bill did not see action before the end of the 2016 congressional session, Meehan said he will reintroduce it in 2017.

Getting an official government notice before turning 65 explaining when to sign up for Part B would “absolutely” help, said Withers. “There should be something that tells people what they need to do.”

Hospice Care – Although Not Actually Dying?

Leave a comment

mother-and-daughter

The service of hospice care is intended for patients who are terminally ill and expected to die.

But over the past decade [as a 2014 Washington Post investigation found] the number of patients who outlived hospice care in the United States has risen dramatically, in part because hospice companies earn more by recruiting patients who are not actually dying.

Now government inspectors have turned up information about how that happens.

About one in three hospice patients were not given key information about what the choice of hospice entails at the time they enrolled, according to a report released on September 15, 2016 by the Office of Inspector General of the Department of Health and Human Services.

In their investigation, government inspectors reviewed a random sample of the documentation that patients sign to indicate they want hospice care. In many cases, the patient was not informed that electing hospice meant that they intended to forgo a cure for their terminal illness — a critical distinction between hospice care and other health services. Hospices instead provide “palliative care”- that is,  care focused on the prevention and alleviation of suffering.

“When people elect hospice care they are forgoing curative care – and it’s important for them to know that,” Nancy Harrison, one of the investigators, said in a interview.

Moreover, in about 14 percent of cases reviewed, the physician who is supposed to approve the enrollment of a patient in hospice care paid only cursory attention to the matter. They provided scant information about the patient’s prognosis, and “appeared to have limited involvement  in determining that the [patient] was appropriate for hospice care,” according to the report.

The trend is “alarming” said Jodi Nudelman, who also worked on the report.

Medicare, the government insurer, pays for the vast majority of hospice care in the United States. In 2013, it paid $15.1 billion for hospice services covering 1.3 million people. The federal government in recent years has sought to recover more than $1 billion from hospices that, according to attorneys, illegally billed Medicare for patients who were not near death.

 

Patients who are not near death are more profitable because they typically require fewer services. Hospices are paid a flat daily rate for hospice patients.

The Office of Inspector General at HHS “has investigated and is investigating hundreds of hospice fraud schemes,” a spokesman said.

The report follows the 2014 series in The Post, “Business of Dying,” that examined how hospice care, which had begun as a service provided by nonprofit groups, had changed as businesses began to provide the service.

The series reported that at hundreds of United States hospices, more than one in three patients are dropping the service before dying, a sign of trouble in an industry who’s responsibility is to care for patients until death.

With that many patients leaving hospice care alive, experts said, the hospices are likely to be either driving them away with inadequate care or enrolling patients who aren’t really dying in order to pad their profits.

It is normal for a hospice to release a small portion of patients before death — about 15 percent has been typical, often because a patient’s health unexpectedly improves. But research showed that at some hospices, and particularly at new, for-profit companies, the rate of patients leaving hospice care alive is double that level or more.

The number of “hospice survivors” was especially high in two states: in Mississippi, where 41 percent of hospice patients were discharged alive, and Alabama, 35 percent. 

The new findings by the government inspectors are part of a larger body of work by the government that, in the inspectors words, reveals “numerous vulnerabilities” and raises serious questions “as to whether Medicare is paying appropriately for hospice.”

 

 

 

 

New Medicare Law for a Patient Loophole

Leave a comment

Long-Term CareLast November, after a bad fall, 85-year old Elizabeth Cannon was taken to a hospital near Philadelphia for seven days of observation, followed by nearly five months in a nursing home for rehabilitation and skilled nursing care. The cost: more than $40,000.  

The hospital insisted that Elizabeth had never been formally admitted there as an inpatient, so under federal rules, Medicare would not pay for her nursing home stay. The money would have to come from her pocket.

The experience of Elizabeth and thousands like her inspired a new Medicare law — in force as of Saturday, August 6, 2016 — that requires hospitals to notify patients they may incur huge out-of-pocket costs if they stay more than 24 hours in the hospital without being formally admitted. Because of the Notice Act, passed by Congress last year [2015] with broad bipartisan support, patients can expect to start receiving the notice in January [2017].

“It was extremely distressful to my mother, who was frugal her whole life,” said Cynthia Morgan, Elizabeth’s daughter. Elizabeth had questioned why Medicare would not pay for her care after she paid into Medicare for so many years. Elizabeth died in April 2016.

Hospitals have been keeping patients like Elizabeth in limbo due to fear of being penalized by Medicare for inappropriate admissions. While under observation, patients can be liable for substantial hospital bills, and Medicare will not pay for subsequent nursing home care unless a person has spent three consecutive days in the hospital as an inpatient.

Time spent under observation does not count toward the three days, even though the patient may spend five or six nights in a hospital bed and receive extensive hospital services, including tests, treatment and medications ordered by a doctor.

Under the new law, the notice must be provided to “each individual who receives observation services as an outpatient” at a hospital for more than 24 hours. Medicare officials estimate that hospitals will have to issue 1.4 million notices a year.

“The financial consequences of observation stays can be devastating for seniors,” said Senator Susan Collins, Republican of Maine and the chairwoman of the Senate Special Committee on Aging.

Senator Benjamin Cardin, Democrat of Maryland, the chief sponsor of the Senate version of the legislation, said it would “save seniors from the sticker shock that comes after they are discharged from the hospital and realize that Medicare will not cover the cost of care in a skilled nursing facility.”

The median cost for a private room in a nursing home is roughly $92,000 a year, according to a survey by Genworth Financial. Medicare covers up to 100 days of skilled nursing home care at a time.

The text of the standard “Medicare outpatient observation notice” is subject to approval by the White House Office of Management and Budget. In its current form, the notice to beneficiaries says: “You are a hospital outpatient receiving observation services. You are not an inpatient.” And it explains that Medicare will cover care in a skilled nursing home only if the beneficiary has had an inpatient hospital stay of at least three days.

Patients can then consult their doctors and may ask to be reclassified as inpatients.

Hospitals have found themselves in a dilemma. They increased their use of “observation status” in response to close scrutiny of their billing practices by Medicare auditors — private companies hired by the government to review claims. In many cases, these companies challenged decisions by doctors to admit patients to a hospital, saying the services should have been provided on an outpatient basis. The auditors then tried to recover what they described as improper payments.

Doctors and hospitals said the auditors were like bounty hunters because they were allowed to keep a percentage of the funds they recovered.

But patients will now, at least, be better informed. The Senate Finance Committee explained the reason for the law this way:

“The number of Medicare beneficiaries receiving outpatient observation care over the last several years has been steadily increasing. Some beneficiaries are surprised to learn that although having received treatment overnight in a hospital bed, the beneficiary was never formally admitted as an inpatient but was instead a hospital outpatient.”

Federal officials acknowledged that Medicare beneficiaries sometimes had to pay more as outpatients under observation than they would have paid if they had been formally admitted to the hospital and received the same services as inpatients.

The administration issued rules to carry out the new law. The purpose, it said, is “to inform beneficiaries of costs they might not otherwise be aware.”

“Even if staying in a hospital overnight, the status might still be considered outpatient,” the administration said in a publication for beneficiaries.

Consumer advocates and nursing homes support the new requirement.

“Medicare beneficiaries are spending more and more time in the hospital without being formally admitted,” said Joyce Rogers, a senior vice president of AARP, the lobby for older Americans, adding that this “can expose beneficiaries to unexpectedly high out-of-pocket costs amounting to thousands of dollars.”

Mark Parkinson, the president and chief executive of the American Health Care Association, a trade group for nursing homes, said, “Patients often have no idea what their status is in a hospital and observation stays impose a significant financial burden on seniors increasing the likelihood of turning to Medicaid.”  

“The new law is an important first step, but Congress and the administration need to do more to protect beneficiaries,” said Judith Stein, the executive director of the nonprofit Center for Medicare Advocacy.

Under the law, hospitals can still keep Medicare patients in observation status, and some of the patients will be responsible for nursing home costs. Twenty-four senators and more than 120 House members are supporting bipartisan legislation to address that concern. Under that bill, time in a hospital under observation would count toward the three-day inpatient stay required for Medicare coverage of nursing home care.

Automatically Enrolled? Some Seniors Surprised

Leave a comment

Couple worried at computerOnly days after Judy Moore came home from the hospital after surgery last year, her doctor’s office called with distressing news. Her records showed that instead of original Medicare, Judy had a private Medicare Advantage plan. Her doctor and hospital were not in the plan’s network.

Neither the plan nor Medicare would now cover her medical costs. She owed $16,622.

“I was panicking,” said Judy [who lived in Carlsbad, New Mexico at the time]. After more than five hours of making phone calls, she learned that because she previously had individual coverage through Blue Cross Blue Shield when she became eligible for Medicare, Blue Cross Blue Shield automatically enrolled her into its own Medicare Advantage plan after notifying her in a letter. Judy said she ignored all mail from insurers because she had chosen traditional Medicare.

“I felt like I had insured myself properly with Medicare,” she said. “So I quit paying attention to the mail.”

With Medicare’s specific approval, a health insurance company can enroll a member of its marketplace or other commercial plan into its Medicare Advantage coverage when that individual becomes eligible for Medicare. Called “seamless conversion,” the process requires the insurer to send a letter explaining the new coverage, which takes effect unless the member opts out within 60 days.

Medicare officials have refused to name the companies that have sought or received such approval or even to say how long the Centers for Medicare & Medicaid Services has allowed the practice. Numerous insurers, including Cigna, Anthem and other Blue Cross Blue Shield subsidiaries, also declined to discuss whether they are automatically enrolling beneficiaries when they turn 65.

And other insurers say they are moving ahead.

Aetna will begin the process soon for its marketplace members in 17 Florida counties. The effort will kick off with individuals who qualify for Medicare in November 2016, spokesman Matthew Clyburn said. Beneficiaries turning 65 will receive a 90-day advance notice instead of the required 60 days and a postcard they can mail back to Aetna. Then, the company will follow up by phone to make sure they understand the change.

In November 2016, United Healthcare will begin to automatically enroll members of its Medicaid plans in Tennessee and Arizona into its Medicare Advantage plans.

Humana, the nation’s second largest Medicare Advantage provider, has asked for federal permission to also do auto-enrollment. 

Medicare officials are developing a procedure for reviewing seamless conversion requests as well as a system to monitor implementation. A company given approval must automatically enroll all Medicare-eligible beneficiaries. But because federal law prohibits marketplace insurers from dropping a member who qualifies for Medicare, both marketplace and Medicare Advantage coverage continue until the person cancels the marketplace plan.

Sally Thompsen, who lives outside Chicago and had an individual health policy from Blue Cross Blue Shield last year, was more than surprised when she received her member card for a Medicare Advantage plan shortly before turning 65. Printed on the card was the name of her new primary care physician, someone she did not know.

“I almost hit the ceiling,” said Sally, who had already enrolled in traditional Medicare.

She demanded that Blue Cross cancel her Medicare Advantage enrollment and reported the situation to Erin Weir, health care access manager at the local advocacy group AgeOptions. Erin heard a similar story from another local woman, who had received a letter from her insurer saying a Medicare Advantage plan was “selected for you because it is similar to your current plan and unless you contact us, you will be automatically enrolled.”

After learning about the problem both from constituents and health care advocates, Rep. Jan Schakowsky (D-Ill.) wants stronger consumer protections. “I am exploring the option of requiring an ‘opt-in’ so that Medicare beneficiaries are adequately informed and able to make the choices that work best for them,” said Schakowsky, whose district includes the Chicago area.

The Lovelace Medicare Advantage plan, in which Judy Moore found herself enrolled, is run by Health Care Service Corporation, which administers Blue Cross Blue Shield plans covering 15 million beneficiaries in Illinois, Montana, New Mexico, Oklahoma and Texas. A Health Care Service spokeswoman said it “offers seamless conversion enrollment on a limited basis.” She would not provide details.

Judy Moore finally solved her dilemma with help from a Medicare counselor at New Mexico’s Aging and Disability Resource Center, who contacted David Lipschutz, a senior attorney at the Center for Medicare Advocacy in Washington. He advised the counselor to tell Medicare officials that the retiree was enrolled in Medicare Advantage without her knowledge even though enrollment must be voluntary.

Eventually, officials disenrolled Judy from her unwanted plan, restored her traditional Medicare coverage and agreed to cover her medical bills.

Lipschutz said giving beneficiaries the chance to opt out does not adequately safeguard consumers. An insurer’s notification letter can easily be mistaken or overlooked in the deluge of marketing materials seniors receive when turning 65.

“The right to opt out does not exist if a Medicare beneficiary does not receive a notice or if they do receive a notice but do not understand the contents,” he said.

 

Fraud Emerges as Compounding Drug Sales Skyrocket

Leave a comment

PharmacistsWhat the government is spending on “compounded” drugs that are mostly handmade by retail pharmacies has skyrocketed, drawing the attention of federal investigators who are raising concerns of fraud and overbilling.

Spending on these medications in Medicare’s Part D program, for example, rose 56 percent last year, with some of the costliest products, including topical pain creams, priced at hundreds or thousands of dollars per tube. The federal workers’ compensation program has also seen a recent spike in spending.

The spending jump, along with a sharp increase in the number of patients getting the compounded drugs “may indicate an emerging fraud trend,” said Miriam Anderson, who helped oversee a June report on the Medicare spending by the inspector general’s office at the Department of Health and Human Services.

Some of the prescriptions may not have been medically necessary — or even dispensed at all, notes the report, which also details recent fraud cases brought by U.S. attorneys in several states.

The practice of compounding drugs, which is done by mixing drugs in pharmacies or special compounding centers by licensed pharmacists, is as old as the pharmacy profession itself. By creating specifically tailored medications, compounding is aimed at patients who cannot take commercially available, FDA-approved medications.

But use among Medicare beneficiaries and federal employees in workers’ compensation insurance plans has recently soared, according to Anderson’s report and a separate Postal Service inspector general’s study of the workers’ compensation program released last spring.

Similar run-ups in spending for compounded drugs were also noted by private-sector benefit managers in recent years.

In Medicare’s drug program, known as Part D, the number of Medicare beneficiaries getting compounded drugs has grown 281 percent since 2006 to nearly 280,000 in 2015. Spending on such drugs in Medicare’s Part D grew 625 percent between 2006 and 2015, to $509 million, according to the OIG report. That is still a tiny fraction of the program’s total spending on drugs.

The fastest-growing category of compounded drugs are topical creams and gels, often used for pain. Spending on those increased 3,466 percent in the Medicare program since 2006, the report said, while the average cost per prescription hit $331, up from $40 in 2006.

A large spike in spending for compounded drugs led the U.S. Postal Service to try to hold back payments for its share of federal workers’ compensation costs last year, saying the agency overseeing the program had failed to more strictly police the use of such drugs. It eventually paid.

Overall, the federal government’s worker’s compensation program, which includes the Postal Service, saw the spending on compounded medications grow from $2.35 million in fiscal 2011 to $214 million in fiscal 2015, according to the Department of Labor, which oversees the program.

New rules from the Department of Labor went into effect July 1, aimed at slowing the spending. Among other changes, the agency will now limit initial prescriptions to 90 days.

While legitimately prescribed compounded drugs “can dramatically improve a patients’ quality of life,” it is also important to have “proper controls around billing,” said John Voliva, executive vice president of the International Academy of Compounding Pharmacists. The HHS inspector general’s report demonstrated that such controls “are not in place,” he said.

Benefits vs. Drawbacks

The studies come amid ongoing scrutiny of the drug compounding industry, particularly following a meningitis outbreak that killed 64 Americans in 2012. Those deaths were linked to a Massachusetts pharmacy that sold tainted injectable medications.

Following that outbreak, some states tightened their oversight of such pharmacies, particularly those producing products that must be sterile.

Compounding pharmacies are generally overseen by state boards of pharmacy, and the drugs they produce are not considered FDA approved. The agency does get involved, however, when it is concerned that pharmacies might not be making medications properly or have started to mass produce treatments, rather than preparing them for individual patients.

When prescribed appropriately, compounded drugs allow patients who can’t take or tolerate commercially prepared products to have special formulations mixed just for them. Patients who can’t swallow pills, for example, can get liquid formulations or those allergic to certain dyes can get products made without them.

And sometimes such drugs can be more cost-effective.

When Turing Pharmaceuticals raised the price of a drug used for patients with compromised immune systems from $13.50 a pill to $750 last year, for example, one of the nation’s largest pharmacy benefit managers partnered with a compounding pharmacy to produce its own version for $1 a pill, said Glen Stettin, senior vice president for clinical research of Express Scripts.

Nationally, since 2012, pharmacies have been required to report all the ingredients they used to make a compounded drug. The idea was to provide insurers with more information about what they were being billed for and to make sure there were no hidden ingredients.

The effect that had on drug prices is up for debate. Stettin and others say a few unscrupulous pharmacies began adding more ingredients so they could charge more.

“They are [creating] combinations of things that have never been tested together,” said Stettin. “We saw a diaper cream that was billed at $1,000, where a patient could get one over the counter for $2.50.”

In California, federal investigators say a marketer for one pharmacy paid doctors to write prescriptions for compounded pain creams formulated to include a “five-pack” of the most expensive ingredients. Then the pharmacy could bill California’s worker’s compensation program $3,000 per tube for creams it cost about $20 to make, according to a federal indictment filed in June.

In Florida, federal prosecutors also in June unsealed an indictment against a doctor who allegedly was given kickbacks — including a $72,000 BMW — for sending prescriptions to a particular pharmacy, which then billed Tricare, Medicare and other government health programs for compounded creams. Prices ranged from about $900 to $21,000 for a one-month supply, according to court documents.

To combat rising spending, Express Scripts in 2014 drew up a list of about 1,000 ingredients used by compounders for which it would no longer pay, saying they were high priced and were not any safer or more effective than other treatments. Many of its clients, including the military health program Tricare, have incorporated that list into their health plans.

Since the limit, Express Scripts says it has seen its clients’ spending on pharmacy-made drugs fall sharply. The list has also prompted two antitrust lawsuits filed against Express Scripts in federal court by compounding pharmacies.

Awaiting Action

What actions Medicare will take — and the effectiveness of a July 1 2016 change in how such medications are paid for in the federal compensation program — remain unclear. The Medicare report does not make any recommendations, although investigators expect to issue a follow up report that will.

In its March 2016 report, the inspector general criticized a lack of action by the Labor Department to address the growing spending, saying that it estimated the Postal Service “has incurred over $81.8 million in excessive compound drug costs and nearly $4.1 million in excessive administrative fees” for the past two fiscal years.

Following that, the Labor Department issued new rules it says will “contain the cost of compound drugs … but still allow for appropriate medical treatment,” according to Leonard J. Howie III, director of the Office of Workers’ Compensation Programs.

 

 

 

 

Older Entries