For Professionals: Advocacy & Policy
Joint Comments on CMS’ Draft PDP Guidance on Eligibility, Enrollment and Disenrollment
August 1, 2005
Submitted by the Medicare Rights Center
and California Health Advocates
California Health Advocates and the Medicare Rights Center (MRC), two organizations working on behalf of people with Medicare coverage, submit the attached joint comments on CMS’ July 22, 2005 Draft Guidance to Prescription Drug Plans (PDPs) on eligibility, enrollment and disenrollment issues.
The private sector plans that offer Part D prescription drug coverage (stand-alone PDPs or MA-PDs) will handle Part D enrollment. Because access to Part D will hinge upon the actions of these plans, it is particularly important that CMS require plans to maintain fair and efficient enrollment processes. These Part D enrollment processes, which are modeled after Medicare Advantage, are insufficient to ensure appropriate access to Part D. The Medicare drug benefit, unlike Medicare Advantage, has no Fee-for-Service fall-back, so persons harmed by enrollment mistakes will be left without any drug coverage for significant periods of time – namely, until they reach a designated enrollment period. They will also be subject to late enrollment penalties. The lack of adequate beneficiary protections will be exacerbated by the implementation of “lock-in” rules that will restrict most beneficiaries’ ability to enroll, switch and get out of Part D plans.
In comments submitted on CMS’ Part D regulations, many consumer groups argued that the draft regulations lacked adequate due process protections to address enrollment and involuntary disenrollment issues. MRC and California Health Advocates restate our concerns here, and assert that CMS has the administrative authority to implement a formal appeals process for enrollment and disenrollment problems. Medicare beneficiaries who encounter problems with enrollment in and disenrollment from Parts A and B have access to formal appeal processes through the Social Security Administration (SSA). Beneficiaries who have problems enrolling in or disenrolling from Part D, however, will not be similarly protected. To ensure adequate access to Part D, CMS should institute a formalized appeals process for enrollment and disenrollment issues with hearing rights and external review.
Further, we request that CMS create appropriate remedies, including established special enrollment periods (SEPs), that provide people with Medicare with avenues to enroll in Part D plans outside of annual enrollment periods, and to have premium penalties waived, if their Part D enrollment is subject to error, misrepresentation, inaction, or other actions by a Part D plan that inappropriately deny the beneficiary the ability to enroll in prescription drug coverage. This policy should be modeled after SSA policy that allows equitable relief when a person’s Part A and B enrollment rights are harmed by government error.
Under the final MMA regulations and this guidance, CMS does not consider Part D plans to be government actors despite the fact that such plans will be administering a public entitlement – Part D prescription drug coverage. As a result, an individual who is harmed by a Part D plan does not have a formalized SEP right; instead, s/he must petition CMS for discretionary, subjective restitution granted on a “case-by-case” basis.
We also urge CMS to establish adequate safeguards and PDP accountability standards related to Part D enrollment and disenrollment. PDP enrollment and disenrollment processes could significantly harm people with Medicare whose efforts to enroll in a Part D plan are stymied by plan policies or processes, but the guidelines do not envision any accountability mechanisms that will monitor PDP enrollment performance. Examples may include lost applications and failure to process applications in a timely manner. We assume that CMS will provide more guidance on plan accountability standards in future guidance.
In short, California Health Advocates and MRC believe that the federal government has failed – in both the MMA regulations and this guidance – to guarantee basic protections to Medicare beneficiaries who will be required to purchase a private commercial product to obtain entitlement to Medicare Part D. CMS must establish such safeguards prior to the implementation of Part D. Our specific concerns, by topic, and additional questions follow.
Special Enrollment Periods
Special enrollment periods (SEPs) represent one of the most important potential remedies available to beneficiaries who are affected by agency or PDP error in the enrollment process. With an SEP, an individual who does not manage to enroll in a Part D plan before the end of the Initial Enrollment Period or the Annual Enrollment Period can still access Part D benefits in a timely manner. However, these guidelines – in combination with the final MMA regulations – fall far short of providing meaningful protections via clearly defined SEPs. We believe that CMS SEP rules should be modeled on the rules articulated in Social Security’s POMS provisions, which allow a beneficiary to request “equitable relief.” The SSA enrollment protections allow beneficiaries to request “equitable relief” from enrollment restrictions and premium penalties in order to rectify harm – to make them whole again – when such harm is a result of errors, acts or omissions on the part of Social Security – the entity responsible for processing enrollment into Parts A and B. These SSA provisions: articulate designated special enrollment period (SEP) rights; clarify the procedures through which a beneficiary can appeal enrollment denials or penalties, including the evidence required to be successful in such an appeal; and allow beneficiaries to request a “premium surcharge rollback” when through no fault of their own they are saddled with a late enrollment penalty.
In sum, enrollment problems caused by Medicare private plans should trigger both an SEP that allows enrollment into Part D plans outside of the designated enrollment periods and a premium penalty waiver (or “premium surcharge rollback”). Rules that apply to enrollment in Part D should mirror current rules that apply to Parts A and B enrollment.
20.3.5 – SEP for Individuals Not Adequately Informed about Creditable Coverage
CMS establishes an SEP for individuals who were not adequately informed of the creditable status of drug coverage provided by an entity required to give such notice, or a loss of creditable coverage. In the draft guidance, CMS does not, however, articulate how an individual in such a situation exercises this right, and what criteria CMS will use to process a request for an SEP under this section. Further, CMS does not clarify the procedure through which an individual applies to CMS to have coverage treated as creditable for purposes of applying the late penalty pursuant to 42 CFR §423.56(g).
We urge CMS to develop a consumer-friendly, accessible, and streamlined process to obtain an SEP and premium penalty waiver in this situation.
20.3.8 – SEPs for Exceptional Circumstances
The MMA permits CMS to establish SEPs for “exceptional circumstances” not enumerated in the statute, and CMS has chosen to establish SEPs under these guidelines related to several circumstances, such as disenrollment from or enrollment in employer or union-sponsored Part D plans, for enrollees whose PDP is sanctioned by CMS, and when enrollees move to or move out of various long-term care settings. California Health Advocates and MRC particularly commend CMS for creating an ongoing SEP for individuals who receive Medicare Savings Program benefits and a more limited right for other LIS eligibles for whom CMS facilitates enrollment into a PDP.
However, CMS has ignored one of the most troubling reasons why an individual may need an SEP to access Part D benefits – plan missteps in the enrollment process. Although the final regulations and section 20.3.7 of this Draft Guidance permit an SEP for Part D enrollment if an individual’s enrollment or non-enrollment is “unintentional, inadvertent, or erroneous because of error, misrepresentation, or inaction of a Federal employee, or any person authorized by the Federal government to act on its behalf,” this remedy is not available to an individual who fails to enroll in Part D because of “error, misrepresentation or inaction” by a Part D plan (42 CFR §423.38(c)(3)). In the Preamble to the final regulations, CMS explicitly rejects the notion that actions or inactions by PDPs – which will be largely responsible for most beneficiaries’ enrollment into Part D as a whole through the PDP enrollment process – would trigger this statutorily required SEP, by stating, “We would not consider Part D plans to be performing enrollment functions as a subcontractor on the behalf of CMS; rather, Part D plans must perform certain enrollment functions as [sic] requirement of their direct contract with CMS” (70 FR 4213).
This interpretation – and the subsequent reliance on a case-by-case SEP to remedy issues for people with Medicare who experience trouble enrolling in a Part D plan and therefore cannot exercise their right to Part D services – ignores the on-the-ground reality that efficiency, effectiveness, and appropriateness or lack thereof, of PDP enrollment processes will determine whether people with Medicare actually receive Part D services. Without a guaranteed SEP that enables them to enroll in a PDP, these individuals may need to wait until a subsequent Annual Coordinated Election Period to effectuate their entitlement to prescription drug benefits, and will likely face added premium penalties. We therefore recommend that CMS establish a designated SEP under the “exceptional circumstances” provision and waive premium penalties for individuals who experience problems enrolling in Part D due to PDP actions or inactions.
Involuntary Disenrollment
The importance of access to prescription drug coverage, coupled with restrictive “lock-in” rules that will limit beneficiaries’ ability to join, switch and get out of Part D plans, make the prospect of involuntary disenrollment a dangerous one for Medicare beneficiaries. A beneficiary who is involuntarily disenrolled will very likely be forced to go without any prescription drug coverage for the balance of the calendar year, and will have to pay added premium penalties.
Instead of establishing a process for individuals to appeal involuntary disenrollment decisions, CMS intends to address beneficiary complaints regarding disenrollment in a manner addressed under the MA program (see, e.g., preamble to final Part D regulations at 70 FR 4214). We opine that CMS cannot merely equate Part D enrollment and disenrollment issues with the Medicare Advantage program, since much more is potentially at stake than just personal preference for enrollment into or disenrollment from, a particular MA plan.
CMS has given Part D plans great discretion in the decision to and manner in which they can terminate coverage against someone’s will. Serious due process concerns are raised by each of these methods of involuntary disenrollment since in none of these situations does a beneficiary have a right to be heard through a pre-termination hearing process. Further, a beneficiary has no right to appeal any adverse decision. Referencing a beneficiary’s right to an internal plan grievance process (see, e.g., section 40.3) is not a meaningful solution since this process is not subject to external review. Decisions made by either the Part D plan or CMS (in the instances in which there is external review) are designed in a way that they are too susceptible to subjective interpretation and decision-making.
We note that dual eligibles, who will receive drug coverage under Part D beginning in January 2006 and be subject to PDP disenrollment decisions, currently have significant appeal rights under Title XIX. Under the MMA and implementing rules, however, they will lose these important constitutional protections and be subject to the more subjective PDP/Part D process.
The following are comments on particular sections in the Draft Guidance regarding disenrollment issues.
40.2.5 – Material Misrepresentation Regarding Third-Party Reimbursement
CMS states that “If a PDP enrollee intentionally withholds or falsifies information about third-party reimbursement coverage, CMS requires that the individual be disenrolled from the PDP” [emphasis added]. Before someone can be disenrolled under this provision, CMS must give the PDP approval. It is unclear, however, what criteria CMS will use to determine whether any misrepresentation by an enrollee is “intentional.” Even before the introduction of Part D, many beneficiaries are currently confused about what insurance coverage they have, how it works with Medicare, and what it covers. It is very likely that many beneficiaries will unintentionally fail to list other payers of prescription drug benefits that they may have access to. These Draft Guidelines do not allow for any discernment between unintentional omissions of other coverage and willful, deliberate acts by those who intend to conceal other health coverage information for their personal gain. Under this provision, CMS will, in effect, become a trier of fact as to the enrollee’s mental state; a role it is neither qualified nor entitled to do.
40.3.1 – Failure to Pay Premiums
CMS allows a PDP to disenroll a member who fails to pay premiums, following proper notice and a grace period of at least one month. This is a significant departure from current corresponding rules for Medicare Advantage plans; this departure, though, adversely affects beneficiaries by failing to allow enough time for a beneficiary to resolve any premium payment problems. Allowing a PDP to disenroll a member after one month of non-payment of premiums does not allow for a host of contingencies that could delay payment on the part of a beneficiary (for example, a spell of illness and/or incapacity).
Furthermore, examples used by CMS in the guidance posit that a beneficiary “ignores” notices about premium payment and pending disenrollment; such examples, in turn, ignore the possibility that a beneficiary might not receive such notices, through error of the plan, electronic transfers, postal services, CMS/SSA records or otherwise. Many beneficiaries also have limited literacy, which could limit their ability to interpret PDP and CMS notices; a grace period of 1 month might not allow such individuals opportunities to seek assistance in interpreting and understanding such notices. CMS must not only extend the required grace period to at least 90 days, it must also allow for a beneficiary and/or his/her representative to demonstrate good cause as to why they were unable to pay the premiums in a timely fashion – including a forum in which to do so (such as a fair hearing).
CMS provides for an “optional exception” to retain dual eligible members who fail to pay premiums even if a PDP sponsor has a policy to disenroll members for non-payment of premiums. While this option may benefit dual eligibles in plans that choose to exercise it, all other dual eligibles will be disadvantaged; it is unrealistic to expect that individuals with incomes near or below poverty level can resolve a non-payment issue in as little as a month. In addition, systemic problems, such as PDP premium payment by CMS pursuant to the LIS, could easily delay payment to Part D plans, and result in many avoidable disenrollments.
In this section, CMS also states that “The PDP sponsor has the right to take action to collect the unpaid premiums from the beneficiary at any point during or after this process.” Allowing PDPs to continue collection efforts after this process adds an unnecessary injury to the insult of the involuntarily disenrollment, which can very likely lead to an individual being without any prescription drug coverage for the balance of the calendar year – and would be particularly egregious in the case of dual eligibles who have already lost Medicaid coverage and now must go without prescription drug coverage of any kind until they can enroll in a new plan, yet have no ability to pay out-of-pocket for their medications.
40.3.2 – Disruptive Behavior
CMS states that “The PDP may disenroll a member if his/her behavior is disruptive to the extent that his/her continued enrollment in the PDP substantially impairs the PDP sponsor’s ability to arrange for or provide services to either that particular member or other members of the PDP.” CMS states that a PDP must make a “serious effort” to resolve problems, including providing reasonable accommodations. Although CMS does require certain steps to be taken, including consultations with clinicians, before an individual can be involuntarily disenrolled from a plan under this provision, these requirements still fall short of adequately protecting beneficiaries who are threatened with such action. Due process requires that a beneficiary have a right to a hearing in this (and other involuntary disenrollment) instance(s), including access to all documentation that a PDP is required to submit to CMS under this section. Instead, however, CMS Regional staff, in consultation with CMS Central staff, will determine the outcome absent an opportunity to be heard by the beneficiary.
In this section, CMS notes that it may require “reasonable accommodations” by PDPs in “exceptional circumstances that CMS deems necessary.” CMS gives an example: “CMS could require the PDP sponsor to delay the effective date of involuntary disenrollment to coordinate with an enrollment period that would permit the individual an opportunity to obtain other coverage. If necessary, CMS will establish an SEP on a case-by-case basis.” We submit that such reasonable accommodation be required in every situation in which a beneficiary is going to lose prescription drug coverage and go without such coverage until the next enrollment period; this accommodation should apply to everyone who does not have an SEP right (eg non-dual eligibles).
40.3.3 – Fraud and Abuse
CMS states that “A PDP sponsor may disenroll a member who knowingly provides fraudulent information on the enrollment request that materially affects the member’s eligibility to enroll in the plan. … [a PDP may also disenroll] a member who intentionally permits others to use his/her enrollment card to obtain services or supplies from the plan or any authorized plan provider” [emphasis added]. Similar to the concerns raised above re: section 40.2.5 about determining an individual’s “state of mind,” how will a PDP be able to determine when a beneficiary is acting “knowingly” and “intentionally”? How will a plan be able to determine whether a beneficiary included erroneous information in an enrollment form due to confusion or with the intent to defraud? How will a PDP be able to tell whether an enrollee’s enrollment card and/or other Medicare information are being used with his or her knowledge? These determinations are highly subjective in nature, and will not even be reviewed externally by CMS. Absent a hearing right for a beneficiary to demonstrate his/her knowledge and intent (or lack thereof), this provision is too susceptible to misuse since it is at the sole discretion of a PDP.
Employer-Group Health Plan Coverage
The implementation of Part D will be an extremely confusing time for beneficiaries who will have to make important choices about their coverage options. These choices will be more difficult for individuals who already have some type of employer-based prescription drug coverage. Although employers are required to notify their retirees about their current coverage and whether it is creditable or not, employer notices are notoriously difficult for retirees to understand. Applicants with existing EGHP coverage, however, have very little protection from enrollment mistakes and/or misinformation provided by Part D plans. Notices that Part D plans must give beneficiaries do not adequately explain the intricate decisions that beneficiaries must make, nor do they distinguish between the different types of employer coverage a beneficiary might have (for example, no distinction is made between employer-based coverage that is primary to Medicare vs. COBRA coverage). There is no warning to alert beneficiaries about the potential loss of their retiree benefits if they make the wrong choice.
Under current CMS regulations and guidelines, a beneficiary who loses employer-based coverage, including prescription drug benefits, due to enrollment in a Part D plan has no recourse in trying to reenroll in their employer-based coverage. We encourage CMS to work with employer plans to troubleshoot these dangers and, to the extent permissible under rules applicable to employer plans, encourage employers to adopt measures to allow enrollees back into their plans should they unintentionally lose coverage. The following comments reflect specific concerns with sections in the Draft Guidance.
10.4 requires a PDP to confirm an individual’s intent to enroll in Part D when the plan has information that that individual has existing employer based coverage. On the surface, this appears to be a good safety measure protecting beneficiaries from making bad choices; in practice, however, this measure is more likely to protect the PDP plan from liability by documenting a beneficiary’s flawed understanding of their current benefits. What if neither CMS nor the Part D plan have information about an individual’s employer coverage and such an individual enrolls in a Part D plan, resulting in a loss of all of his/her retiree benefits? How will a beneficiary in this situation be protected?
30.1 requires PDP sponsors’ “enrollment vehicle” to include several statements that the applicant acknowledges, including: that s/he “[u]nderstands that enrollment in the PDP automatically disenrolls him/her from any other PDP, MA plan … Cost-based HMO/CMP or PACE plan in which he/she is enrolled.” Notably absent from this warning is how enrollment in a PDP can affect other health coverage, including employer-based coverage. Applicants should be warned that if they enroll in a PDP, such enrollment could negatively impact their current employer-based coverage, including potential loss of such coverage (which would not be limited to prescription drug coverage). Such a warning will be necessary for beneficiaries, particularly absent any recourse for beneficiaries to rejoin their employer-based plans.
Additional issues arise regarding employer plans and dual eligibles (section 30.1.4), which are addressed below.
Auto- & Facilitated-Enrollment of LIS Beneficiaries
We are concerned about certain time periods for auto- and facilitated-enrollment outlined in the Draft Guidance. Under Section 30.1.4, a beneficiary who is eligible for Medicare first then subsequently becomes eligible for Medicaid, can face a delay of several months in their auto-enrollment. We would argue that, similar to individuals who are Medicaid eligible first and then subsequently become eligible for Medicare, auto-enrollment should be effective the first of the month of Medicare Part D eligibility for both groups of dual eligibles. CMS should establish a streamlined process through which “Medicare first” dual eligibles will immediately be enrolled into a Part D plan, and if necessary, retroactive enrollment should apply.
Similar concerns are raised by the timing of individuals who are facilitated-enrolled into Part D plans. Section 30.1.5.B states that for those non-dual eligible and non-Medicare Savings Program individuals who have been deemed eligible for the LIS, “the effective date of facilitated enrollment will be the first month after the end of the individual’s next valid enrollment period. This could be … the [IEP] or the [AEP].” In CMS’ own example in this section, a person who first becomes eligible for Part D in May of 2007 will not be facilitated-enrolled until the end of the next AEP – going without Part D coverage for approximately 8 months. We are concerned that many people who enroll in the low-income subsidy will forget and/or fail to enroll into a Part D plan during permissible enrollment periods. Neglecting to facilitate enrollment for these beneficiaries until their next “valid enrollment period” circumvents Congressional and CMS intent to maximize enrollment into the LIS as soon as people are eligible.
During 2006, facilitated enrollment will occur one month after the IEP, before any premium penalty begins to accrue and well before the AEP. There is no reason that people who become eligible for the LIS after 2006 shouldn’t have the same protections against premium penalties and potentially long periods of being locked out of Part D coverage between enrollment periods.
30.1.4.A states that full dual-eligibles will be auto-enrolled into a Part D plan “regardless of whether the employer is claiming the retiree drug subsidy for that individual.” This default enrollment without regard to a dual eligible’s employer coverage can clearly result in loss of such employer coverage. Although CMS would state that the ongoing SEP right enjoyed by dual eligibles mitigates the damage of such a result, a dual eligible could very likely have retiree coverage that better serves them than Part D. Further, dual eligibles who lose their retiree medical benefits will adversely affect the state Medicaid programs by shifting some non-prescription drug costs that would have been covered under the retiree plan to the state’s Medicaid program. CMS must establish a safety net to protect dual eligibles in this situation so that they will not lose their retiree coverage, should they choose to retain it.
30.1.4.D & 30.1.5.D each discuss pre-enrollment materials that a PDP must provide to beneficiaries who are auto-enrolled and facilitated-enrolled, respectively. Such materials include information about “the charges for which the prospective member will be liable, e.g., any premiums, coinsurance, fees or other amounts; (including general information about the low income subsidy).” Including such information in either situation will be highly confusing for these beneficiaries who will already be enrolled in the low-income subsidy and will not be subject to the usual plan premium and cost-sharing amounts. Thus, pre-enrollment materials for LIS beneficiaries who are auto- or facilitated-enrolled into PDPs should be modified accordingly.
Miscellaneous
30.4.1 discusses information that must be provided to a plan member prior to the effective date of enrollment. Such information includes: “[t]he potential for member liability if it is found that the member is not eligible for Part D at the time coverage begins and the member has used PDP services after the effective date.” This member liability is not further articulated in this Guidance or elsewhere, but nonetheless should not be applicable if the member is found to be ineligible for the plan due to no fault of the member (including if the member believed that s/he was eligible when s/he applied).
30.5 – Enrollments Not Legally Valid – CMS notes that it “does not regard an enrollment as actually complete if the individual, or his/her legal representative, did not intend to enroll in the PDP. If there is evidence that the individual did not intend to enroll in the PDP, the PDP sponsor should submit a retroactive disenrollment request to the CMS RO …” We note that CMS should further articulate “intent to enroll,” including situations in which a beneficiary does not understand the enrollment process.
Exhibits – The guidelines include a number of model notices related to plan communications with members regarding enrollment and disenrollment matters. California Health Advocates and MRC note that these notices should be more thoroughly tested with older adults and people with disabilities to ensure that they are understandable to a variety of Medicare beneficiaries. In some cases – for example, section 30.1.4 (C)– CMS assumes that the recipient’s inaction indicates intent, such as acquiescence with autoenrollment in a particular PDP. However, these notices contain complex concepts and use relatively sophisticated language. For example, Exhibit 24 (PDP Model Notice to Confirm Auto-Enrollment) includes concepts such as confirming enrollment, distinguishing between Medicaid and Medicare drug coverage, and the consequences of not taking Part D coverage – critical information that is hard to follow in the model notice. If an individual cannot understand the letter they receive, inaction surely cannot be indicative of any kind of intent.
Thank you for the opportunity to comment on these Draft Guidelines. For further information, please contact:
| California Health Advocates David Lipschutz 3435 Wilshire Blvd., Suite 2850 Los Angeles, CA 90010 213 381-3670 213 381-7154 (fax) |
Medicare Rights Center (MRC) Kim Glaun Senior Policy Counsel (410)752-3292 |