Statement of Pennsylvania Health Law Project,  Philadelphia, PA

 The Pennsylvania Health Law Project “PHLP” submits this testimony to be included in the record of the hearing on Medicare Advantage, held before the Health Subcommittee of the Committee on Ways and Means on Wednesday, March 21, 2007.

The Pennsylvania Health Law Project is a statewide, non-profit public interest law firm that provides free legal services, advice, information, and advocacy to lower-income individuals, persons with disabilities and seniors in accessing healthcare coverage and services through the publicly funded healthcare programs.  Our website is www.phlp.org.

We write on behalf of our clients who are enrolled in Medicare Advantage Special Needs Plans (SNPs) and who have experienced, firsthand, problems accessing their medically necessary healthcare as SNP enrollees.  We have substantial experience with Medicare Advantage SNPs and grave concerns about them.  In late 2005, CMS allowed six Medicare Advantage SNPs in Pennsylvania to "passively enroll" over 110,000 of our poorest and most chronically ill individuals out of the Original Medicare benefit they had chosen and into the Medicare Advantage SNPs.[1]  The result was a wholesale disruption in the access to critically needed healthcare coverage.   Once the chaos of the abrupt shift to managed care settled and consumers began actually attempting to obtain necessary healthcare coverage, the issues surrounding SNPs’ design and function came to the surface. 

The MMA included a five year authorization of special Medicare Advantage plans that exclusively or disproportionately enroll "special needs" populations.  SNPs can be designed to serve people who 1) are institutionalized; 2) are entitled to state medical assistance; or 3) have a severe or disabling chronic condition.   For 2007, CMS has approved over 470 plans to be Medicare Advantage SNPs, most of which are focused specifically on the dual eligible population, although a significant proportion of persons who are institutionalized are or will become dual eligibles and, similarly, many individuals with chronic conditions may also be dual eligibles.   The arrival of SNPs on the market since the MMA has been swift; their numbers rapidly increasing each year.[2] 

Our clients believe that dual eligibles, persons with chronic conditions, and institutionalized individuals could potentially benefit significantly from coordinated, integrated, and managed care from a plan specially designed to meet their needs, since they generally have substantial and complex healthcare needs.  Accordingly, SNPs do present the possibility or opportunity for better care through coordination, integration, and targeted care management.  Please note, however, that although plans may take steps to deliver these benefits to meet the special needs of their members, CMS imposes no formal requirements that a SNP actually take these or any other steps to deliver on the promise of better care. 

We are particularly concerned that CMS has not promulgated regulations delineating either meaningful standards an MA plan must meet for initial approval as a SNP nor any requirements an approved SNP must follow to ensure that it coordinates the care and benefits or, in fact, meets the special needs of its enrollees.    The failure by CMS to articulate meaningful requirements makes a difference for enrollees who are trying to access the medically necessary care they require.     The MMA itself requires implementing regulations for SNPs.[3]   Yet, to date, no substantive regulations have been promulgated.

It has quickly become clear to our clients in Pennsylvania that the Special Needs Plans, even those plans expressly for dual eligibles, which CMS has authorized as specially designed to meet their needs, are not obligated to require their providers to accept and bill Medicaid for any amounts unpaid by Medicare which are the responsibility of Medicaid.  SNPs are not obligated to require, or even instruct, participating providers to comply with state and federal rules prohibiting them from billing Medicaid recipients for balances unpaid by Medicare.  SNPs are not required to educate or maintain any accessible system for use by their participating providers to inquire whether those services that are not covered by the SNP are covered by Medicaid.   SNPs are not obligated to inform their pharmacies of, or to require their pharmacies to bill, Medicaid programs for Part D excluded drugs that the state has elected to continue to cover under the state Medicaid plan.   SNPs are not required to inform their enrollees that Medicaid may cover services or prescriptions not included in their SNP benefits, and they are not required to assist the enrollees in actually accessing these services.  SNPs are not even required to insure the accuracy of the information they do publish about what a state Medicaid program covers or, in the institutional SNP realm, providers must furnish, and how the SNP coverage interacts with these.

Absent minimum standards for meeting the special needs of the populations they serve, labeling these plans as specially designed to do so is misleading.  CMS needs to commit to ensuring that coordinated, integrated care is delivered.   Beneficiaries need substantive regulations that establish minimum standards for what SNPs must do and how SNPs must function to meet their special needs.  These regulations must clearly set forth the expectation that SNPs will take affirmative steps to assist enrollees with navigating both their Medicare and Medicaid coverage to ensure that they receive all needed covered services regardless of whether the SNPs themselves are responsible for covering the service.   Only then will the potential benefits of specialized managed care actually inure to beneficiaries.At a minimum, SNPs serving dual eligibles must be required to:

1.      Adopt minimum uniform standards for coordinating and integrating the Medicare and Medicaid benefits.  These standards must be incorporated into the SNP contracts with CMS, and their compliance with these standards must be measured during site reviews and other CMS compliance evaluations.

2.      Include in SNP summary of benefits documents accurate information, as confirmed and approved by the State's Medicaid agency, describing Medicaid's coverage of services not covered by the SNP as well as Medicaid's coverage of the beneficiary's cost-sharing obligations within the SNP.

3.      Include as a SNP benefit "coordination of benefits" to include all services involved in coordination and integrating the enrollees' multiple insurances (primarily Medicare and Medicaid). Failure to provide these coordination and integration services should trigger beneficiary appeal rights through the Part C appeals process. 

4.      Include in SNP marketing materials explanations of the "coordination of care" and "coordination of benefits" benefits, in addition to Parts C and D covered benefits, which dual eligibles can obtain from their SNP.

5.      Arrange for an evaluation of Medicaid coverage when a prescription is denied at the pharmacy, and, where applicable, direct the pharmacist to bill Medicaid.  All SNPs should program their systems with medications Medicaid will and will not cover.

6.      Require network providers to participate in Medicaid or accept the SNP's payment as payment in full.

7.      Instruct all network providers on applicable state and federal prohibitions against billing Medicaid consumers for Medicare cost sharing that should be covered by Medicaid.

8.      Design prescription drug or medical claims denial letters to state, "If you have Medicaid, note that this prescription medication or service may be covered by Medicaid.  Please ask your provider to obtain this item through Medicaid.  For any assistance with this, please call member services."

9.      Train member services personnel regarding details of what Medicaid benefits are available and how to obtain them.

10.  Make available special needs units and case management services, and publicize their availability to all enrollees for obtaining assistance in accessing referrals, understanding plan policies and procedures and coordinating challenging care needs.

11.  Articulate precisely what benefits Institutional SNP enrollees get above and beyond what is already required by federal Nursing Home Reform and other laws and how benefits are limited, managed, and coordinated.

12.  Make public exactly what expertise enabled them to qualify as a SNP.

On behalf of our clients, we thank the Committee for the opportunity to submit written testimony.  We hope that this testimony will help inform the Committee’s understanding of Medicare Advantage Special Needs Plans.

[1] The Passive Enrollment of Pennsylvania’s dual eligibles was litigated in the Eastern District of Pennsylvania in the matter entitled Erb v. McClellan, No. 2:05-cv-6201 (E.D. Pa. filed Nov. 30, 2005).  Erb v. McClellan alleged violations of the MMA, the Medicare Act, the Administrative Procedure Act, and constitutional due process requirements.  The subject of the litigation, which was favorably settled in March 2006, was the agency’s statutory authority and lack of due process in effectuating the passive enrollment.   While the Erb complaint challenged the authority of and process by which CMS passively enrolled dual eligibles, the underlying merits of Medicare Advantage SNPs for dual eligibles were not litigated.

[2] CMS approved eleven MA SNPs in 2004, 125 in 2005, and 276 in 2006. 

[3] MMA § 223(b), Pub. L. No. 108-173, 117 Stat. 2066, 2207 (2003) ("The Secretary shall revise the regulations previously promulgated to carry out part C of title XVIII of the Social Security Act [42 U.S.C.A. § 1395w-21 (2006)] to carry out the provisions of this Act."); MMA § 231(f)(2), 117 Stat. 2066, 2208 ("No later than 1 year after the date of the enactment of this Act, the Secretary shall issue final regulations to establish requirements for special needs individuals.").