Medicare Part D
Enrolling New Dual-Eligible Beneficiaries in Prescription Drug Plans Gao ID: GAO-07-824T May 8, 2007Under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), dual-eligible beneficiaries--individuals with both Medicare and Medicaid coverage--have their drug costs covered under Medicare Part D rather than under state Medicaid programs. The MMA requires the Centers for Medicare & Medicaid Services (CMS) to enroll these beneficiaries in a Medicare prescription drug plan (PDP) if they do not select a plan on their own. CMS enrolled about 5.5 million dual-eligible beneficiaries in late 2005 and about 634,000 beneficiaries who became dually eligible during 2006. GAO was asked to testify on (1) CMS's process for enrolling new dual-eligible beneficiaries into PDPs and its effect on access to drugs and (2) how CMS set the effective coverage date for certain dual-eligible beneficiaries and its implementation of this policy. This testimony is based on a GAO report that is being released today, Medicare Part D: Challenges in Enrolling New Dual-Eligible Beneficiaries (GAO-07-272).
CMS's process for enrolling new dual-eligible beneficiaries who have not yet signed up for a PDP involves many parties, information systems and administrative steps, and takes a minimum of 5 weeks to complete. For about two-thirds of these individuals--generally Medicare beneficiaries who subsequently qualify for Medicaid--pharmacies may not have up-to-date PDP enrollment information needed to bill PDPs appropriately until the beneficiaries' data are completely processed. As a result, these beneficiaries may have difficulty obtaining their Part D-covered prescription drugs during this interval. CMS has created contingency measures to help individuals obtain their new Medicare benefit, but these measures have not always worked effectively. For the other one-third of new dual-eligible beneficiaries--Medicaid enrollees who become Medicare-eligible because of age or disability--CMS eliminated the impact of processing time by enrolling them in PDPs just prior to their attaining Medicare eligibility. This prospective enrollment, implemented in late 2006, offers these dual-eligible beneficiaries a seamless transition to Medicare Part D coverage. CMS set the effective Part D coverage date for Medicare-eligible beneficiaries who subsequently become eligible for Medicaid to coincide with the date their Medicaid coverage becomes effective. Under this policy, which was designed to provide drug coverage for dual-eligible beneficiaries as soon as they attain dual-eligible status, the start of their Part D coverage can extend retroactively for several months before the date beneficiaries are notified of their PDP enrollment. GAO found that CMS did not fully implement or monitor the impact of this policy. Although beneficiaries are entitled to reimbursement for covered drug costs incurred during this retroactive period, CMS did not begin informing them of this right until March 2007. Given their vulnerability, it is unlikely that these beneficiaries would have sought reimbursement or retained proof of their drug purchases if they were not informed of their right to do so. Also, CMS made monthly payments to PDPs for providing drug coverage during retroactive periods, but did not monitor PDPs' reimbursements to beneficiaries during that time period. GAO estimated that in 2006, Medicare paid PDPs millions of dollars for coverage during periods for which dual-eligible beneficiaries may not have sought reimbursement for their drug costs.
GAO-07-824T, Medicare Part D: Enrolling New Dual-Eligible Beneficiaries in Prescription Drug Plans
This is the accessible text file for GAO report number GAO-07-824T
entitled 'Medicare Part D: Enrolling New Dual-Eligible Beneficiaries in
Prescription Drug Plans' which was released on May 8, 2007.
This text file was formatted by the U.S. Government Accountability
Office (GAO) to be accessible to users with visual impairments, as part
of a longer term project to improve GAO products' accessibility. Every
attempt has been made to maintain the structural and data integrity of
the original printed product. Accessibility features, such as text
descriptions of tables, consecutively numbered footnotes placed at the
end of the file, and the text of agency comment letters, are provided
but may not exactly duplicate the presentation or format of the printed
version. The portable document format (PDF) file is an exact electronic
replica of the printed version. We welcome your feedback. Please E-mail
your comments regarding the contents or accessibility features of this
document to Webmaster@gao.gov.
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed
in its entirety without further permission from GAO. Because this work
may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this
material separately.
Testimony:
Before the Committee on Finance, U.S. Senate:
United States Government Accountability Office:
GAO:
For Release on Delivery Expected at 10:00 a.m. EDT:
Tuesday, May 8, 2007:
Medicare Part D:
Enrolling New Dual-Eligible Beneficiaries in Prescription Drug Plans:
Statement of Kathleen M. King:
Director, Health Care:
GAO-07-824T:
GAO Highlights:
Highlights of GAO-07-824T, a testimony before the Committee on Finance,
U.S. Senate
Why GAO Did This Study:
Under the Medicare Prescription Drug, Improvement, and Modernization
Act of 2003 (MMA), dual-eligible beneficiaries” individuals with both
Medicare and Medicaid coverage”have their drug costs covered under
Medicare Part D rather than under state Medicaid programs. The MMA
requires the Centers for Medicare & Medicaid Services (CMS) to enroll
these beneficiaries in a Medicare prescription drug plan (PDP) if they
do not select a plan on their own. CMS enrolled about 5.5 million dual-
eligible beneficiaries in late 2005 and about 634,000 beneficiaries who
became dually eligible during 2006.
GAO was asked to testify on
(1) CMS‘s process for enrolling new dual-eligible beneficiaries into
PDPs and its effect on access to drugs and (2) how CMS set the
effective coverage date for certain dual-eligible beneficiaries and its
implementation of this policy. This testimony is based on a GAO report
that is being released today, Medicare Part D: Challenges in Enrolling
New Dual-Eligible Beneficiaries (GAO-07-272).
What GAO Found:
CMS‘s process for enrolling new dual-eligible beneficiaries who have
not yet signed up for a PDP involves many parties, information systems
and administrative steps, and takes a minimum of 5 weeks to complete.
For about two-thirds of these individuals”generally Medicare
beneficiaries who subsequently qualify for Medicaid”pharmacies may not
have up-to-date PDP enrollment information needed to bill PDPs
appropriately until the beneficiaries‘ data are completely processed.
As a result, these beneficiaries may have difficulty obtaining their
Part D-covered prescription drugs during this interval. CMS has created
contingency measures to help individuals obtain their new Medicare
benefit, but these measures have not always worked effectively. For the
other one-third of new dual-eligible beneficiaries”Medicaid enrollees
who become Medicare-eligible because of age or disability”CMS
eliminated the impact of processing time by enrolling them in PDPs just
prior to their attaining Medicare eligibility. This prospective
enrollment, implemented in late 2006, offers these dual-eligible
beneficiaries a seamless transition to Medicare Part D coverage.
CMS set the effective Part D coverage date for Medicare-eligible
beneficiaries who subsequently become eligible for Medicaid to coincide
with the date their Medicaid coverage becomes effective. Under this
policy, which was designed to provide drug coverage for dual-eligible
beneficiaries as soon as they attain dual-eligible status, the start of
their Part D coverage can extend retroactively for several months
before the date beneficiaries are notified of their PDP enrollment. GAO
found that CMS did not fully implement or monitor the impact of this
policy. Although beneficiaries are entitled to reimbursement for
covered drug costs incurred during this retroactive period, CMS did not
begin informing them of this right until March 2007. Given their
vulnerability, it is unlikely that these beneficiaries would have
sought reimbursement or retained proof of their drug purchases if they
were not informed of their right to do so. Also, CMS made monthly
payments to PDPs for providing drug coverage during retroactive
periods, but did not monitor PDPs‘ reimbursements to beneficiaries
during that time period. GAO estimated that in 2006, Medicare paid PDPs
millions of dollars for coverage during periods for which dual-eligible
beneficiaries may not have sought reimbursement for their drug costs.
What GAO Recommends:
GAO‘s report contains several recommendations, including that CMS
require PDPs to modify beneficiary notices and that CMS monitor the
implementation of its payment policy. CMS did not agree with all of the
recommendations, but it has taken steps to implement some.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-824T].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Kathleen M. King at (202)
512-7119 or kingk@gao.gov.
[End of section]
Mr. Chairman and Members of the Committee:
I am pleased to be here today as you discuss the Medicare Part D
prescription drug benefit. Implementation of this new drug benefit has
raised particular concerns for individuals eligible for both Medicare
and full Medicaid benefits--known as dual-eligible
beneficiaries.[Footnote 1] These individuals account for about 15
percent of all Medicare beneficiaries and 15 percent of all Medicaid
enrollees. As a group, they are generally poorer and tend to have more
extensive health care needs than other Medicare beneficiaries. Under
the Medicare Prescription Drug, Improvement, and Modernization Act of
2003 (MMA),[Footnote 2] dual-eligible beneficiaries--who previously
received drug benefits under Medicaid--have had their prescription drug
costs paid under Medicare Part D since January 1, 2006. In addition,
the MMA requires the Centers for Medicare & Medicaid Services
(CMS)[Footnote 3] to assist dual-eligible beneficiaries by enrolling
them in a private Medicare prescription drug plan (PDP) if they do not
select a plan on their own. CMS enrolled about 5.5 million dual-
eligible beneficiaries in late 2005 for the initial implementation of
Part D and about 634,000 beneficiaries who became dual-eligible during
2006.
My testimony today will summarize selected findings from the GAO report
that is being released today, Medicare Part D: Challenges in Enrolling
New Dual-Eligible Beneficiaries.[Footnote 4] Specifically, my remarks
today will focus on (1) CMS's process for enrolling new dual-eligible
beneficiaries into PDPs and its effect on beneficiary access to drugs
and (2) how CMS set the effective Part D coverage date for certain dual-
eligible beneficiaries and its implementation of this policy.
To address these issues, we conducted site visits in six states--
California, Maine, Maryland, Michigan, New Jersey, and Texas--to learn
about dual-eligible beneficiaries' enrollment in Part D from the
perspective of state Medicaid agencies, pharmacies, and long-term care
providers. We also interviewed officials from CMS and representatives
of PDPs about issues that pertain to dual-eligible beneficiaries. We
conducted the work for our report from March 2006 through April 2007 in
accordance with generally accepted government auditing standards.
In summary, we found that CMS's process for enrolling new dual-eligible
beneficiaries involves many parties, information systems, and
administrative steps, and takes a minimum of 5 weeks to complete. For
the majority of these individuals--generally Medicare beneficiaries not
yet enrolled in Part D who subsequently qualify for Medicaid--this
processing interval can create difficulties in obtaining Part D-covered
drugs at their pharmacies. For other new dual-eligible beneficiaries--
Medicaid enrollees who become Medicare eligible because of age or
disability--CMS took steps to eliminate the impact of the processing
interval by enrolling them in PDPs just prior to their attaining
Medicare eligibility. In addition, for the Medicare first, Medicaid
second group of new dual-eligible beneficiaries, CMS set the effective
date of Part D coverage to coincide with the first date of their
Medicaid eligibility. Under this policy, which was designed to provide
drug coverage for dual-eligible beneficiaries as soon as they attain
dual-eligible status, the start of their Part D coverage can be
retroactively set to several months before the date of their actual PDP
enrollment. We found that CMS did not fully implement or monitor the
impact of this coverage date policy. Although beneficiaries are
entitled to reimbursement for covered drug costs incurred during this
retroactive period, CMS and PDPs did not begin informing them of this
right until March 2007. Also, CMS did not track Medicare payments made
to PDPs to provide retroactive coverage or monitor PDPs' reimbursements
to beneficiaries for that time period. We estimate that in 2006,
Medicare paid PDPs about $100 million for coverage during periods for
which dual-eligible beneficiaries may not have sought reimbursement for
their drug costs. In the report, we recommend that CMS require PDPs to
notify beneficiaries about their right to reimbursement, monitor
implementation of its retroactive payment policy, and take other steps
to improve the operational efficiency of the program.
Background:
Dual-eligible beneficiaries are a particularly vulnerable population.
These individuals are typically poorer, tend to have far more extensive
health care needs, have higher rates of cognitive impairments, and are
more likely to be disabled than other Medicare beneficiaries. About
three out of four dual-eligible beneficiaries live in the community and
typically obtain drugs through retail pharmacies. Other dual-eligible
beneficiaries reside in long-term care facilities and obtain drugs
through pharmacies that specifically serve these facilities.
In general, individuals become dual-eligible beneficiaries in two ways.
One way is when Medicare-eligible individuals subsequently become
Medicaid eligible. This typically occurs when income and resources of
beneficiaries fall below certain levels and they enroll in the
Supplemental Security Income (SSI) program,[Footnote 5] or they incur
medical costs that reduce their income below Medicaid eligibility
thresholds. If these Medicare beneficiaries did not sign up for a Part
D plan on their own, they have no drug coverage until they are enrolled
in a PDP by CMS. CMS data show that this group represented about two-
thirds of new dual-eligible beneficiaries the agency enrolled in PDPs
in 2006. According to CMS, it is not possible for it to predict which
Medicare beneficiaries will become Medicaid eligible in any given month
because Medicaid eligibility determinations are a state function.
Another way individuals become dually eligible is when Medicaid
beneficiaries subsequently become eligible for Medicare by reaching 65
years of age or by completing the 24-month disability waiting
period.[Footnote 6] Once they become dual-eligible beneficiaries, they
can no longer receive coverage from state Medicaid agencies for their
Part D-covered prescription drugs. In 2006, this group represented
approximately one-third of the new dual-eligible beneficiaries enrolled
in PDPs by CMS. CMS can generally learn from states when these
individuals will become dually eligible.
For dual-eligible beneficiaries, Medicare provides a low-income subsidy
that covers most of their out-of-pocket costs for Part D drug coverage.
This subsidy covers the full amount of the monthly premium that non-
subsidy-eligible beneficiaries normally pay, up to the low-income
benchmark premium.[Footnote 7] The subsidy also covers most or all of a
dual-eligible beneficiary's prescription copayments. In 2007, these
beneficiaries are responsible for copayments that range from $1 to
$5.35 per prescription, depending on their income and asset levels,
with the exception of those in long-term care facilities, who pay no
copayments.
CMS's Enrollment Process Takes Time and Can Create Difficulties for
Some Dual-Eligible Beneficiaries:
Given the number of entities, information systems, and administrative
steps involved, it takes a minimum of 5 weeks for CMS to identify and
enroll a new dual-eligible beneficiary in a PDP. As a result, two out
of three new dual-eligible beneficiaries--generally those who are
Medicare eligible and then become Medicaid eligible--may experience
difficulties obtaining their prescription drugs under Part D during
this interval. For other new dual-eligible beneficiaries--those
switching from Medicaid to Medicare drug coverage--CMS instituted a
prospective enrollment process in late 2006 that enrolls these
individuals before their date of Medicare eligibility and offers a
seamless transition to Part D coverage.
Multiple parties and information systems are involved in identifying
and enrolling dual-eligible beneficiaries in PDPs. As shown in figure
1, CMS, the Social Security Administration (SSA), state Medicaid
agencies, and PDP sponsors play key roles in providing information
needed to ensure that new dual-eligible beneficiaries are identified
and enrolled properly. SSA maintains information on Medicare
eligibility that is used by CMS and some states. State Medicaid
agencies are responsible for forwarding to CMS lists of beneficiaries
whom the state believes to be eligible for both Medicare and Medicaid.
CMS is then responsible for making plan assignments and processing
enrollments. PDP sponsors maintain information systems that are
responsible for exchanging enrollment and billing information with CMS.
Figure 1: Overview of the Major Systems and Steps Used to Enroll Dual-
Eligible Beneficiaries in PDPs:
[See PDF for image]
Source: GAO.
Note: CMS adapted existing information systems used in the
administration of other parts of the Medicare program to perform
specific functions required under Part D. The Medicare eligibility
database serves as a repository for Medicare beneficiary entitlement,
eligibility, and demographic data. The database is used by CMS to
provide up-to-date information to verify the status of dual-eligible
beneficiaries, as well as determine subsidy status and make assignments
to PDPs. The enrollment transaction system is used to enroll
beneficiaries in PDPs. The eligibility query is used by pharmacies to
obtain Part D enrollment information from the Medicare eligibility
database.
[End of figure]
The process of enrolling dual-eligible beneficiaries requires several
steps. It begins when state Medicaid agencies identify new dual-
eligible beneficiaries and ends when PDPs make billing information
available to pharmacies and send enrollment information to dual-
eligible beneficiaries. We estimate that it takes at least 5 weeks to
complete the process under current procedures. During this interval,
pharmacies may not have up-to-date PDP enrollment information on new
dual-eligible individuals. This may result in beneficiaries having
difficulty obtaining Part D-covered drugs at their pharmacies. To
illustrate why this occurs, we present the hypothetical example of Mr.
Smith, who as a Medicare beneficiary did not sign up for the Part D
drug benefit and, therefore, upon becoming Medicaid eligible, was
enrolled in a PDP by CMS. (Fig. 2 shows the steps in Mr. Smith's
enrollment process.)
Figure 2: Mr. Smith, a Hypothetical Example of the Enrollment Process
for a Newly Identified Dual-Eligible Beneficiary Who Was Medicare
Eligible but without Previous Part D Coverage:
[See PDF for image]
Source: GAO.
Notes: The dates presented in this example of enrollment for Mr. Smith
generally represent the best-case scenario. The range of dates
represent the minimum and maximum length of elapsed time allowed for
processing and notification, based on information provided by CMS. GAO
makes no assurances that the events described would occur on the dates
provided for any specific dual-eligible beneficiary.
[A] The scenario presented reflects an application to Medicaid based on
a reason other than disability. State Medicaid agencies have 45 days to
make eligibility determinations not based on disability and 90 days for
eligibility determinations based on disability, subject to extensions
in certain circumstances.
[B] If the state Medicaid agency did not determine that Mr. Smith was
eligible for Medicaid before it submitted its September dual-eligible
file, his information could not be submitted until October. This
scenario is not presented in this figure.
[End of figure]
From the time Mr. Smith applies for his state's Medicaid program on
August 11, it takes about 1 month for him to receive notification from
the state that he is eligible for Medicaid, thus beginning the
enrollment process. From there, Mr. Smith's new status is submitted by
his state to CMS in a monthly file transmittal. Once CMS receives the
lists of dual-eligible beneficiaries from all of the states, it
verifies eligibility for Medicare and sets each beneficiary's cost-
sharing level. Then, around October 8, CMS assigns Mr. Smith to a PDP
randomly, based on the premium level and the geographic area served by
the PDP.[Footnote 8] CMS next notifies the PDP sponsor, which then has
to enroll him in its plan and assign the necessary billing information.
This billing information, such as a member identification number, is
necessary for pharmacies to correctly bill the PDP for Mr. Smith's
prescriptions. The PDP also has to inform Mr. Smith of his enrollment
information. By the time this process is completed, it is the middle of
October.
CMS has developed some contingency measures to help individuals like
Mr. Smith during the processing interval. However, we found that these
measures have not always worked effectively. For instance, CMS designed
an enrollment contingency option to ensure that dual-eligible
beneficiaries who were not yet enrolled in a PDP could get their
medications covered under Part D, while also providing assurance that
the pharmacy would be reimbursed for those medications. However,
representatives of pharmacy associations we spoke with reported
problems with reimbursements after using this option, which has led
some pharmacies to stop using it.
To avoid a gap in coverage for beneficiaries transitioning from
Medicaid to Medicare prescription drug coverage, CMS has implemented a
prospective enrollment process. Because states can predict and notify
CMS which Medicaid beneficiaries will become new dual-eligible
beneficiaries and when, CMS begins the enrollment process for these
individuals 2 months before the their anticipated dual-eligible status
is attained. By conducting the processing steps early, the prospective
enrollment used for this group of new dual-eligible beneficiaries
should ensure a seamless transition from Medicaid drug coverage to
Medicare Part D coverage. Fully implemented in November 2006,
prospective enrollment applies to about one-third of the new dual-
eligible beneficiaries enrolled in PDPs by CMS.
CMS Made Drug Coverage Retroactive, but Did Not Inform Beneficiaries of
Their Right to Reimbursement:
For the majority of new dual-eligible beneficiaries, CMS requires PDPs
to provide drug coverage retroactively, typically by several months.
During 2006, Medicare paid PDPs millions of dollars to provide coverage
to dual-eligible beneficiaries for drug costs that may have been
incurred during the retroactive coverage period. However, we found that
CMS did not fully implement or monitor the impact of this policy.
CMS made the effective date of Part D drug coverage for Medicare
beneficiaries who become Medicaid eligible coincide with the effective
date of their Medicaid eligibility. Under this policy, Part D coverage
for these beneficiaries is effective the first day of the month that
Medicaid eligibility is effective, which generally occurs 3 months
prior to the date an individual's Medicaid application was submitted to
the state, if the individual was eligible for Medicaid during this
time. Thus, the Part D coverage period can extend retroactively back
several months from when the actual PDP enrollment takes place.
Medicare makes payments to the PDPs for providing drug coverage
retroactively. Specifically, PDPs are paid approximately $90 per month
for the retroactive coverage period.[Footnote 9] PDPs, in turn, are
responsible for reimbursing their members (or another payer) for Part D
drug costs incurred during the retroactive months. For instance, in the
case of Mr. Smith, while he applied for Medicaid in August and learned
of his PDP assignment for Part D in October, his coverage was effective
May 1. If Mr. Smith incurred any costs for Part D-covered prescription
drugs from May--when he became eligible for Medicaid--through October,
he could submit his receipts to his assigned PDP and be reimbursed by
the PDP, less the copayments he would pay as a dual-eligible
beneficiary.
We found that CMS's implementation of this policy in 2006 was
incomplete. While dual-eligible beneficiaries were entitled to
reimbursement by their PDPs in 2006, neither CMS nor PDPs notified dual-
eligible beneficiaries of this right. The model letters used until
March 2007 to inform dual-eligible beneficiaries of their PDP
enrollment did not include any language concerning reimbursement of out-
of-pocket costs incurred during retroactive coverage periods. In
response to a recommendation in our report, CMS modified the model
letters that the agency and PDPs use to notify dual-eligible
beneficiaries about their PDP enrollment. The revised letters let
beneficiaries know that they may be eligible for reimbursement of some
prescription costs incurred during retroactive coverage periods.
Given the vulnerability of this population, it seems unlikely that many
dual-eligible beneficiaries would have contacted their PDPs for
reimbursement if they were not clearly informed of their right to do so
and given information about how to file for reimbursement, neither
would they likely have retained proof of their drug expenditures. Mr.
Smith, for example, would need receipts for drug purchases made during
a 5-month period preceding the date he was notified of his PDP
enrollment--at a time when he could not foresee the need for doing so.
Further, CMS did not monitor how many months of retroactive coverage
PDPs provided, nor did it monitor PDP reimbursements to beneficiaries
for costs incurred during retroactive coverage periods. Based on data
provided by CMS, we estimate that Medicare paid about $100 million to
PDP sponsors in 2006 for retroactive coverage. CMS does not know what
portion of this $100 million PDPs paid to dual-eligible beneficiaries
to reimburse them for drug costs. If Mr. Smith's PDP did not reimburse
Mr. Smith for any prescription drugs purchased during the retroactive
coverage period, the PDP retained Medicare's payments for that time
period.
Conclusions:
Given the time it takes to complete the enrollment process, CMS has
taken action to ensure ready access to Part D for some new dual-
eligible beneficiaries, but difficulties remain for others. For the one-
third of new dual-eligible beneficiaries whose eligibility can be
predicted, CMS's decision to implement prospective enrollment should
eliminate the coverage gap in transitioning from Medicaid to Medicare
drug coverage. However, because of inherent processing lags, most new
dual-eligible beneficiaries may continue to experience difficulties
obtaining their drugs for at least 5 weeks after being notified of
their dual-eligible status. In addition, CMS's incomplete
implementation of its retroactive coverage policy in 2006 means that
CMS paid PDPs millions of dollars for coverage during periods for which
dual-eligible beneficiaries may not have sought reimbursement for their
drug costs. Without routine monitoring of this policy, the agency
remains unaware of what portion of these funds was subsequently
reimbursed to beneficiaries and, therefore, cannot ensure the efficient
use of program funds.
Our report contains several recommendations. We recommend that CMS
require PDPs to notify beneficiaries of their right to reimbursement
and monitor implementation of its retroactive payment policy. We also
recommend that CMS take other steps to improve the operational
efficiency of the program. Although the agency did not agree with all
of them, it has already taken steps to implement some of our
recommendations. As of March 2007, CMS has modified its letters to dual-
eligible beneficiaries to include language informing them of their
right to reimbursement for drug costs incurred during retroactive
coverage periods and required PDP sponsors to do the same. In addition,
CMS officials told us that they plan to analyze data to determine the
magnitude of payments made to PDPs for retroactive coverage and the
amounts PDPs have paid to beneficiaries. We hope that CMS will use this
information to evaluate the effectiveness of its retroactive coverage
policy. If, after conducting the analysis, CMS determines that it is
paying PDPs substantial amounts of money and dual-eligible
beneficiaries are not requesting reimbursements, the agency may want to
rethink its policy in light of pursuing the most efficient use of
Medicare funds.
Mr. Chairman, this concludes my prepared remarks. I would be pleased to
respond to any questions that you or other members of the committee may
have at this time.
Contact and Acknowledgments:
For further information regarding this testimony, please contact
Kathleen King at (202) 512-7119 or kingk@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this statement. Contributors to this testimony
include Rosamond Katz, Assistant Director; Lori Achman; and Samantha
Poppe.
FOOTNOTES
[1] We use the term dual-eligible beneficiaries to refer to individuals
who qualify for a state's full package of Medicaid benefits.
[2] MMA, Pub. L. No. 108-173, tit. I, § 101, et seq., 117 stat. 2066,
2071-2152 (2003) (to be codified at 42 U.S.C. § 1395w-101, et seq. and
42 U.S.C. § 1396u-5).
[3] CMS is the agency that administers the Medicare program on behalf
of the Secretary of Health and Human Services.
[4] GAO, Medicare Part D: Challenges in Enrolling New Dual-Eligible
Beneficiaries, GAO-07-272 (Washington, D.C.: May 4, 2007).
[5] In most states, beneficiaries who qualify for cash assistance from
SSI--a cash assistance program for aged, blind, and disabled
individuals with limited income and resources--automatically qualify
for full Medicaid benefits.
[6] Under Social Security Disability Insurance (DI), which assists
people who worked but became disabled before their retirement age,
individuals are eligible for Medicare coverage after they have received
DI cash benefits for 24 months.
[7] The low-income benchmark is the average monthly beneficiary premium
for all PDPs in a region, weighted by each plan's enrollment.
[8] Some states have assisted dual-eligible beneficiaries by using
other methods to select a PDP for enrollment, including methods that
also consider drug utilization information. For example, the State of
Maine used beneficiary-specific data to reassign nearly half of the
state's dual-eligible beneficiaries to PDPs that covered more of their
prescriptions. After reassignment, the number of beneficiaries whose
PDP covered nearly all of their prescription drugs increased
significantly.
[9] The $90 per month includes the direct subsidy Medicare pays PDPs
for providing the Medicare drug benefit to any Medicare beneficiary and
the low-income premium subsidy CMS pays PDPs to cover the cost of
premiums dual-eligible beneficiaries would pay if they were not
receiving the low-income subsidy.
GAO's Mission:
The Government Accountability Office, the audit, evaluation and
investigative arm of Congress, exists to support Congress in meeting
its constitutional responsibilities and to help improve the performance
and accountability of the federal government for the American people.
GAO examines the use of public funds; evaluates federal programs and
policies; and provides analyses, recommendations, and other assistance
to help Congress make informed oversight, policy, and funding
decisions. GAO's commitment to good government is reflected in its core
values of accountability, integrity, and reliability.
Obtaining Copies of GAO Reports and Testimony:
The fastest and easiest way to obtain copies of GAO documents at no
cost is through GAO's Web site (www.gao.gov). Each weekday, GAO posts
newly released reports, testimony, and correspondence on its Web site.
To have GAO e-mail you a list of newly posted products every afternoon,
go to www.gao.gov and select "Subscribe to Updates."
Order by Mail or Phone:
The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent
of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or
more copies mailed to a single address are discounted 25 percent.
Orders should be sent to:
U.S. Government Accountability Office 441 G Street NW, Room LM
Washington, D.C. 20548:
To order by Phone: Voice: (202) 512-6000 TDD: (202) 512-2537 Fax: (202)
512-6061:
To Report Fraud, Waste, and Abuse in Federal Programs:
Contact:
Web site: www.gao.gov/fraudnet/fraudnet.htm E-mail: fraudnet@gao.gov
Automated answering system: (800) 424-5454 or (202) 512-7470:
Congressional Relations:
Gloria Jarmon, Managing Director, JarmonG@gao.gov (202) 512-4400 U.S.
Government Accountability Office, 441 G Street NW, Room 7125
Washington, D.C. 20548:
Public Affairs:
Paul Anderson, Managing Director, AndersonP1@gao.gov (202) 512-4800
U.S. Government Accountability Office, 441 G Street NW, Room 7149
Washington, D.C. 20548:
