Conference Agreement. The conference agreement allows Medicare beneficiaries to retain their ability to make and change elections to a Medicare+Choice plan through 2006. The current law limitation on changing elections that begins in 2005, is delayed until 2006. Further, the annual coordinated election period for 2004 and 2005 begins on November 15 and ends on December 31. For 2006, the annual coordinated election period begins on November 15 and ends on May 15, 2006. Beginning in 2007, the annual coordinated election period will begin on November 15 and end on December 31. The Secretary is to provide for an education and publicity campaign to inform MA eligible individuals about the availability of MA plans, including MA-PD plans, offered in different areas and the election process for MA plans. If any portion of an individual’s initial enrollment period for Part B occurs after the end of the annual coordinated election period, their initial enrollment period would be extended through the end of their Part B initial enrollment period. The conference agreement will limit an individual’s right to change MA plans, for plan years beginning on or after January 1, 2006. This limit will not affect an individual’s opportunity to make changes during the annual coordinated election period, but it will limit changes during the continuous open enrollment and disenrollment periods in a year. Individuals enrolled in an MA plan that provides qualified prescription drug coverage, may only disenroll from their plan to get coverage through FFS Medicare or through another MA plan that does not provide qualified prescription drug coverage. They may not leave their plan to obtain coverage under an MA-PD plan or under a prescription drug plan under Part D. Conversely, individuals enrolled in an MA-PD plan, may only change to another MA-PD plan or they may get coverage under FFS Medicare with coverage under a drug plan under part D. They may not enroll in an MA plan if it does not provide qualified prescription drug coverage. An MA-PD plan could provide for a separate or differential payment for a participating physician who prescribes covered part D drugs in accordance with an electronic prescription program meeting Part D requirements. Such payment could take into consideration the implementation costs for the physician and could also be increased for those participating physicians who significantly increased: 1) formulary compliance; 2) lower cost and therapeutically equivalent alternatives; 3) r...
Conference Agreement. Section 211(a). The conference agreement makes several changes to the payments for MA plans. In some MA payment areas, the MA payment rate is lower than the costs of providing FFS care to enrollees in traditional Medicare in some parts of the country. Many private plans have seen their Medicare payment rates rise much less rapidly than the costs of FFS Medicare, as they have been held to increases of two percent annually every year since 1998, except for 2001 when a three percent increase was paid due to the BIPA. Health costs in general are running much higher than the two percent payment increases that most plans are receiving in the areas where most of the beneficiaries are enrolled in Medicare+Choice. Plans find it difficult⎯if not impossible⎯to contract with providers if FFS Medicare can reimburse providers at higher rates than private plans may offer, given their Medicare payments. If paid less than FFS Medicare, private plans may be forced to increase enrollee premiums or cost-sharing, or decrease supplemental benefits, such as prescription drug coverage. Since 1998, the number of plans participating in M+C has declined from 346 to 155. To encourage plan entry, all private plans would be paid at a minimum of the FFS rate. In addition, private plan rates would increase at the same rate as growth in FFS Medicare. The goal is to increase beneficiary choice, by increasing private plan participation in Medicare. For 2004, a 4th payment mechanism will be added and plans will receive the highest of the four payment calculations (the floor, blend, minimum percentage increase, or the new amount). The new payment amount is 100% of fee-for-service (FFS) costs. The FFS payment is based on the adjusted average per capita cost for the year, for an MA payment area, for services covered under Parts A and B for beneficiaries entitled to benefits under Part A, enrolled in Part B and not enrolled in an MA plan. The 4th payment mechanism, 100% fee-for-service, will be rebased no less than once every 3 years. This payment will be adjusted to: (1) remove payments for direct medical education costs, and (2) include the additional payments that would have been made if Medicare beneficiaries entitled to benefits from facilities of the Department of Veteran Affairs (VA) and the Department of Defense (DOD) had not used those services (VA/DOD adjustment). Section 211(b). In 2004, no adjustment will be made for budget neutrality, in order to fund the blend for that year.
Conference Agreement. The conference agreement establishes organizational requirements for PDP sponsors under the New Section 1860D-12. In general, the section would require a PDP sponsor to be licensed under state law as a risk bearing entity eligible to offer health insurance or health benefits coverage in each state in which it offers a prescription drug plan. Alternatively it could meet solvency standards established by the Secretary for entities not licensed by the state. To the extent an entity is at risk, it must assume financial risk on a prospective basis for covered benefits that is not covered by direct subsidy payments. The entity could obtain insurance or make other arrangements for the cost of coverage provided to enrollees. PDP plan sponsors would be required to enter into a contract with the Secretary under which the sponsor agreed to comply both with the applicable requirements and standards and the terms and conditions of payment. The contract could cover more than one plan. The Secretary may not enter into a contract with a PDP sponsor if the entity submitted a bid for the year (as the first year of the contract period) to offer a fallback plan in any region or offered a fallback plan in the region during the previous year. An entity is to be treated as submitting a bid if it is acting as a subcontractor of a PDP sponsor that is offering a plan; however this does not apply to a MA organization insofar as it is acting as a PDP sponsor. The new section would incorporate, by reference, many of the contract requirements applicable to MA plans including minimum enrollment, contract periods, protections against fraud and abuse, intermediate sanctions, and contract terminations. Pro rata user fees may be established to help finance enrollment activities. The new Section 1860D-12 permits the Secretary, in order to expand choice, to waive the state licensure requirement under circumstances similar to those permitted under Part C for provider sponsored organizations. In such cases, plans would be required to meet financial solvency and capital adequacy standards established by the Secretary. The Secretary, in consultation with the National Association of Insurance Commissioners, would establish and publish such standards by January 1, 2005. The Secretary may periodically review and revise the standards; however, the Secretary may not implement significant new regulatory requirements except at the beginning of a calendar year. The standards established under Part D supe...
Conference Agreement. The agreement includes miscellaneous provisions. It permits the Secretary to waive Part D requirements, including the requirement for two plans in an area, insofar as the Secretary determines it necessary to secure access to qualified drug coverage in the territories. The agreement requires the Secretary to submit a legislative proposal within six months of enactment containing necessary technical and conforming amendments to titles I and II of the bill. Not later than January 1, 2005, the Secretary is required to submit a report to Congress containing recommendations for providing benefits under Part D for drugs currently paid for under Part B. By March 1, 2005, the Secretary is required to submit a report to Congress on the progress made in implementing the drug benefit. The report will include specific steps taken, and that need to be taken, to ensure a timely start on January 1, 2006. The report is to include recommendations regarding an appropriate transition form the discount card and transitional assistance program. Medicare Advantage Conforming Amendments (Section 102 of Conference agreement; Section 231 of House bill; Sections 201 and 204 of Senate bill).
Conference Agreement. The agreement prohibits, effective January 1, 2006, the selling, issuance, or renewal of existing Medigap policies with prescription drug coverage for Part D enrollees. The prohibition would not apply to renewal of Medigap prescription policies for persons who are not Part D enrollees. Persons enrolling under Part D during the initial enrollment period could enroll in a plan without drug coverage, or continue their previous policy as modified to exclude drugs. H, I, and J policies, modified to exclude drugs, could continue to be offered to new enrollees. Medigap issuers would be required to notify individuals of these changes 60 days prior to the initial Part D enrollment period. The provision guarantees issuance of a substitute Medigap policy for persons, enrolling in Part D, who at the time of such enrollment were enrolled in and terminated enrollment in a Medigap policy H, I, or J or a pre-standard policy that included drug coverage. Evidence of enrollment and termination would be required. The guaranteed enrollment is for any of the Plans A, B, C, and F within the same carrier of issue. The guarantee applies for enrollments occurring in the new Medigap plan within 63 days of termination of enrollment in a Medigap drug Plan H, I, or J. The insurer may not impose an exclusion based on a pre-existing condition for such individuals. Further, the insurer is prohibited from discriminating in the pricing of such policy on the basis of the individual’s health status, claims experience, receipt of health care or medical condition. The conferees intend that these provisions be administered in such a manner as to avoid a break in coverage. The conference agreement requires the Secretary to request the National Association of Insurance Commissioners to review and revise standards for benefit packages taking into account the changes in benefits resulting form the enactment of this Act and to otherwise update standards to reflect other changes in law included in the Act. To the extent practicable, the revision will provide for implementation of revised standards as of January 1, 2006. The revision is to include 2 new benefit packages. The first new package will have the following benefits (notwithstanding other provisions of law relating to core benefits): 1) coverage of 50% of the cost-sharing otherwise applicable (except coverage of 100% cost-sharing applicable for preventive benefits); 2) no coverage of the Part B deductible; 3) coverage of all hospital coinsuran...
Conference Agreement. The agreement establishes a State Pharmaceutical Assistance Transition Commission to develop a proposal for dealing with the transitional issues facing State programs and participants due to implementation of the new Part D prescription drug program. The Commission, to be established as of the first day of the third month following enactment, will include: 1) a representative of each governor from each state with a program that the Secretary identifies as having a benefit package comparable to or more generous than the low-income assistance under the new Section 1860D-14; 2) representatives from other states that have pharmaceutical assistance programs, as appointed by the Secretary; 3) representatives (not exceeding the total under #1 and #2) of organizations that have an inherent interest in the participants or the program itself; appointed by the Secretary; 4) representatives of MA organizations, Pharmacy Benefit Managers and other private insurance plans; and 5) the Secretary or the Secretary’s designee and other members specified by the Secretary. The Commission is to develop the proposal in accordance with specified principles, namely: 1) protection of the interests of program participants in the least disruptive manner; 2) protection of the financial and flexibility interests of states so they are not financially worse off; and 3) principles of Medicare modernization outlined in Title II of the Act. The Commission will report to the President and Congress by January 1, 2005, including specific legislative or administrative recommendations, if any. The Commission will terminate 30 days later. The Conferees intend the Commission to play an integral role in identifying potential problems and proposing creative solutions to ensure a seamless transition for States and beneficiaries in coordinating and interacting with the new Medicare plans. Studies and Reports (Section 107 of Conference agreement; New Section 1860D-10 of House bill; Section 102, Section 106 and Section 110 of Senate bill). House Bill Under the new Section 1860D-10, the Secretary, within six months of enactment, would be required to review the current standards of practice for pharmacy services provided to patients in nursing facilities. Specifically, the Secretary would assess: 1) the current standards of practice, clinical services, and other service requirements generally utilized for such pharmacy services; 2) evaluate the impact of those standards with respect to patient safety, red...
Conference Agreement. The agreement requires the Secretary to study variations in per capita spending for covered Part D drugs among PDP regions to determine the amount of such variation that is attributable to price variations and the differences in per capita utilization that is not taken into account in the health status risk adjustment made to PDP bids. The Secretary is required to submit a report to Congress on the study including information on the extent of geographic variation in per capita utilization, an analysis of the impact of direct subsidies and whether such subsidies should be adjusted to take into account such variation, and recommendations regarding the appropriateness of applying an additional geographic adjustment factor to bids. The conference agreement requires the Secretary, within six months of enactment, to review the current standards of practice for pharmacy services provided to patients in nursing facilities. Specifically, the Secretary is to assess: 1) the current standards of practice, clinical services, and other service requirements generally utilized for such pharmacy services; and 2) evaluate the impact of those standards with respect to patient safety, reduction of medication errors, and quality of care. The report is to contain a description of the Secretary’s plans to implement this Act in a manner consistent with applicable state and federal laws designed to protect the safety and quality of care of nursing facility patients. The report must also include recommendations regarding necessary actions. The conference agreement requires the Secretary to enter into a contract with the Institute of Medicine to carry out a comprehensive study of drug safety and quality issues in order to provide a blueprint for system-wide change. The objectives of the study are to: 1) develop a full understanding of drug safety and quality issues through an evidence-based review of the literature, case studies, and analysis; 2) attempt to develop credible estimates of the incidence, severity and costs of medication errors; 3) evaluate alterative approaches to reducing medication errors; 4) provide guidance on high-priority strategies to achieve drug safety goals; 5) assess opportunities and key impediments to broad nationwide implementation of medication error reductions; and 6) develop an applied research agenda to evaluate the health and cost impacts of alternative interventions. The study is to be completed within an 18-month period. Such sums as may be necessa...
Conference Agreement. The agreement authorizes the Secretary to make grants to physicians for the purpose of assisting them to implement electronic prescription programs in complying with the standards under the new Section 1860D-(4)(e). The Secretary, in awarding the grant shall give special consideration to physicians who serve a disproportionate number of Medicare patients and give preference to physicians who serve a rural or underserved area. Grant funds may be used for purchasing, leasing, and installing hardware and software; making upgrades and other improvements; and providing education and training to eligible physician staff on the use of technology. Xxxxx applicants are required to provide the secretary with information necessary to evaluate the project and to ensure that funding is expended only for the purposes for which it is made. The applicant must agree to make available non-Federal contributions totaling at least 50 percent of the costs. $50 million is authorized for FY 2007, and such sums as may be necessary for FY 2008 and FY 2009. Expanding the Work of Medicare Quality Improvement Organizations to Include Parts c and D (New section 109 of the Conference agreement). Present Law Quality improvement organizations (QIOs) review medical necessity and quality of services provided under Medicare. House Bill No provision. Senate Bill
Conference Agreement. The conference agreement requires the Federal Trade Commission to conduct a study of differences in payment amounts for pharmacy services provided to enrollees in group health plans that utilize pharmacy benefit managers (PBMs). The study is to include an assessment of the differences in costs incurred by such enrollees and plans for drugs dispensed by mail order pharmacies owned by PBMs compared to those not owned by PBMs, and community pharmacies. The study is to examine whether such plans are acting in a manner that maximizes competition and results in lower prescription drug prices for enrollees. The report is due to Congress within 18 months of enactment. It is to include recommendations regarding any legislation to insure the fiscal integrity of the Part D program. Conferees note the Secretary has the authority to accept or reject bids, based, among other factors, costs associated with delivering drug benefits. The intent of the conferees in including this assessment by the FTC is to assess whether Medicare spending is likely to be adversely affected because of the use of mail order pharmacies that are owned and operated by a PBM under contract to a prescription drug plan or MA-PD plan. Therefore, this study should evaluate to what extent prescription drug spending is likely to be affected if a PDP or MA-PD plan approves the dispensation of covered drugs from a mail- order pharmacy owned directly or indirectly by a PBM compared to drug utilization and costs if the mail-order pharmacy were independently owned. Such assessment shall take into account the following:
Conference Agreement. No provision. Limitation on Prescription Drug Benefits of Members of Congress (Section 107 of Senate Bill). Present Law Members of Congress are entitled to receive health benefits through the Federal Employees Health Benefits (FEHB) program. House Bill
