The Medicare Prescription Drug Improvement and Modernization Act of 2003 implemented prescription drug coverage under Medicare (Medicare D), requiring all employers that offer prescription drug benefits to provide an annual notice of Medicare open enrollment. The notice must go to all Medicare eligible plan participants and qualified beneficiaries before October 15th each year. The notice requirement applies to all employers offering prescription drug benefits regardless of size, whether fully-insured or self-funded, or regardless of ACA grandfathered status. Notification must go to all Medicare eligible plan participants, including active employees and their dependents, retirees and COBRA participants. For most employers, it is easier to issue the notice to all participants as a blanket notice than to identify Medicare eligible employees.
The notice requires that the plan sponsor first determine if their plan offers creditable coverage (meaning it is on average at least as comprehensive as Medicare D coverage), or non-creditable. The Centers for Medicare and Medicaid Services (CMS) provides a simple process to determine whether prescription drug coverage is creditable or not. Once that determination is made, CMS provides model notices to send to participants in both English and Spanish. Notices may be sent separately, included as part of open enrollment or other benefit related materials, or electronically as long as the DOL’s rules on electronic delivery are followed.
Additionally, all plan sponsors are required to notify CMS within 60 days of the start of each plan year as to whether or not their prescription drug plan is creditable or not creditable. This notification is done online at CMS here.
For Diversified Group clients who have elected to have Diversified Group handle your Medicare D notices, DG will determine if the plan is considered creditable or not and will then send the notice either to the client or directly to the plan participant depending upon which service was elected.
While hospitals in 34 geographic areas will still be required to participate in the Comprehensive Care for Joint Replacement Model, hundreds of acute care hospitals in other areas have received a reprieve. In addition to modifying CJR model compliance, CMS recently finalized plans to cancel the Episode Payment and Cardiac Rehabilitation Incentive Payment Models, both of which were scheduled to become effective on January 1, 2018.
While a number of hospitals will voluntarily participate in the CJR model and others have expressed interest to participate in the two cancelled models, the agency said there would not be enough time to restructure the models prior to the planned 2018 start date. Even though some have criticized the Trump administration for a lack of interest in value-based care, the administration has expressed a strong commitment to value-based payment, but says it prefers voluntary models.
The Centers for Medicare and Medicaid Services (CMS) began their initiative to tie payments to quality or value earlier this year by implementing their Comprehensive Care Joint Replacement Model (CJR). The mandatory program holds hospitals accountable for all costs, processes and outcomes associated with hip and knee replacements performed on Medicare patients. Since hip and knee replacements are the most common inpatient surgeries for seniors, the CJR model is expected to serve as a critical test to determine whether bundles can help control costs and increase quality.
The quality of treatment and aggregate spending for a 90-day period, including surgery, recovery and rehabilitation will determine whether the hospital owes money or will receive additional payment from Medicare. CMS is establishing specific bundled pricing for each provider, then using data to determine regional pricing after five years.
Looking Outside the Walls
This model is forcing hospitals to evaluate overall care for joint replacements since clinical and financial success requires coordination between hospitals and post-acute care providers such as skilled nursing facilities. While joint replacements may represent only a portion of a hospital’s revenue, the Medicare Star Rating System tied to CJR will make provider performance public. Low performance will make it difficult to compete for Medicare-funded joint replacements in the future and many think that if bundling shows positive results, CMS will likely look to other areas of care.
As you may recall, with the introduction of Medicare Part D prescription drug benefits, the Centers for Medicare and Medicaid Services (CMS) imposed specific notice requirements on employers.
Each year, employers whose healthcare plans include prescription drug benefits are required to notify all Medicare beneficiaries and the CMS of the “creditable” or “non-creditable” coverage status of their prescription drug plan. This notice is due on October 14th, before the open enrollment period begins. (Medicare Part D Open Enrollment is October 15th – December 7th).
Onus on the Employer
Not all carriers are providing notices to their potential Medicare-eligible participants, even if they have assisted in this process in the past. Most carriers are only sending the notice to those individuals they know are already covered by Medicare. Diversified Group recommends you send the notice to all plan participants to ensure that all participants, including spouses and dependents that need the notice, will receive it.
CMS also requires plan sponsors to provide notice of their creditable-coverage status to Part D-eligible members at other times, including:
- Before an individual’s initial opportunity to enroll in Part D (generally satisfied by the requirement to provide notice annually to all Medicare-eligible employees prior to Oct. 15).
- Before the effective date of coverage for any Medicare-eligible individual that joins the employer’s plan.
- When the plan’s prescription drug coverage ends or its creditable coverage status changes.
- Upon an individual’s request.
Helping Diversified Group Clients Comply
If your health benefits plan is administered by Diversified Group, you have been informed of the requirements related to Medicare Part D Notices AND the steps we can take to help your plan comply with all Medicare related communication. If you have questions regarding Medicare Part D Notices, please contact your Diversified Group representative at your convenience.