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SAMHSA News - July/August 2005, Volume 13, Number 4

Medicare Modernization Brings Big Changes (Part 2)

The Basics

To understand the key changes ahead, the following elements are important:

  • Shift to Medicare Prescription Drug Coverage. Starting in January 2006, every person with Medicare will be eligible for coverage to help pay for prescription drugs. For many people, this means they will have prescription drug coverage for the first time. For people with both Medicare and Medicaid, it means that Medicare—not Medicaid—will pay for their prescription drugs starting January 1. However, Medicaid will continue to pay other mental health and substance abuse treatment costs for dually eligible individuals.

  • New prescription drug plans. Under the new program, dozens of prescription drug plans, insurance companies, and other private organizations approved by Medicare will negotiate with pharmaceutical manufacturers to offer Medicare prescription drug plans at the most affordable prices. Every beneficiary will have a choice of at least two plans in his or her community. Information about the prescription drug plans will be available in the Medicare & You 2006 handbook mailed to all people with Medicare this October.

  • Coverage. The prescription drug plans will cover both generic and brand-name medications. Their formularies—lists of medications available—must include at
    least two medications within each class of drug. For the six drug classes CMS calls "of special interest," the formularies will include virtually all medications.

    Three of these drug categories affect consumers with mental illness: antidepressants, used to treat depression; antipsychotics, used to treat schizophrenia and psychosis; and anticonvulsants, used to treat bipolar disorders. "By far and away, most people will be able to stay on their current medicines," said Anita Everett, M.D., Senior Medical Advisor at SAMHSA.

  • Costs. Costs are another area of difference between dually eligible people and other beneficiaries. While most beneficiaries will have to pay a premium, dually eligible consumers won't. Beneficiaries whose income and resources are limited, but not low enough to qualify for Medicaid, can apply for extra help, which dually eligible beneficiaries will receive automatically. Dually eligible people will, however, have to make copayments on individual prescriptions. For persons who have both Medicare and Medicaid, the copayments per prescription will be no more than $1 for generic and $3 for brand name. Those with limited income will pay no more than $2 for generic and $5 for brand-name medications.

  • Choice. Dually eligible people don't have to stick with the plan CMS assigns them. Unlike most beneficiaries who can change drug plans only once a year, people with both Medicare and Medicaid will be allowed to change plans anytime. "If dually eligible consumers don't like the plan they're assigned to or feel it isn't the best fit in terms of their needs or preferences, they can switch," said Dr. Everett.

  • Substance abuse. Medication is sometimes used in specific situations in substance abuse treatment, and prescription drug plans may cover such medication. Plans must cover at least two medications in the alcohol aversion category, which includes naltrexone (Revia®, Trexan®), acamprosate (Campral®), and disulfuram (Antabuse®). In addition, plans are required to cover smoking cessation medication.

    Plans also may cover buprenorphine, a medication used for treating opioid addiction.

  • A seamless transition. Most beneficiaries will have to research the prescription drug plans in their area and select the one that meets their needs. To ensure continuity of care, CMS will enroll dually eligible people automatically in a Medicare prescription drug plan if they don't join one on their own by December 31, 2005. "Many of the dually eligible consumers have serious mental illnesses or cognitive impairments," explained Dr. Everett. "There was a concern that they would fall through the cracks if they weren't automatically enrolled." This automatic enrollment helps to ensure that individuals with both Medicare and Medicaid don't miss a day of coverage.

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Addressing Concerns

Some observers are worried about the impact of the new Medicare prescription drug coverage.

"We're concerned about the implementation of the Medicare Modernization Act and its impact on providers and the consumers they serve," said Linda Rosenberg, M.S.W., President and Chief Executive Officer of the National Council for Community Behavioral Healthcare. "We have been working closely with CMS and SAMHSA and have appreciated their leadership in efforts to make this a smooth transition for everyone."

Major concerns include the following:

  • Cost-containment measures. "It's important to keep in mind that Medicare—including this new prescription drug coverage—is an insurance plan. As such, Medicare uses the same cost-containment and quality assurance measures used by private insurance companies," said Dr. Everett.

It's important to keep in mind that Medicare-including
this new prescription drug coverage-is an insurance
plan. As such, Medicare uses the same cost-
containment and quality assurance measures used
by private insurance companies.

    Some observers are concerned that those measures could make it harder for beneficiaries to obtain specific medications. "We're concerned about individuals who are clinically stabilized who might have to switch medications," said Sam Muszynski, J.D., Director of the Office of Healthcare Systems and Financing at the American Psychiatric Association.

    CMS, working closely with SAMHSA as well as stakeholder groups, has developed a set of checks and balances to protect patients with mental illnesses. For example, Medicare will use "risk adjustment"—whereby prescription drug plans are compensated differentially for certain high-risk users—to reduce incentives for plans to deny specific medications or benefits to certain beneficiaries as a way to reduce costs. Comparative analyses will be conducted between plans to assure that drug use patterns do not represent discrimination against high-cost categories of illnesses.

    Among other protections, CMS will require every Medicare prescription drug plan to establish a transition procedure for accommodating individual medical needs. This procedure must ensure that consumers have access to medications that work for them, even if those medications are not on the formulary.

    CMS also created an appeals process. Prescription drug plans are required to respond to an enrollee's request for a decision within 24 hours under an expedited coverage determination and within 72 hours for a standard coverage determination. CMS established a Medicare Beneficiary Ombudsman Office to provide a troubleshooting mechanism for beneficiaries.

    "Overall, NAMI is pleased with the collaboration and cooperation of SAMHSA and CMS to make this transition as smooth as possible," said Andrew Sperling, Director of Legislative Advocacy at the National Association for the Mentally Ill (NAMI).

  • Benzodiazapines. Currently, Medicare Part A covers benzodiazepines for detox purposes in an inpatient setting. However, by law the new Medicare prescription drug coverage (Medicare Part D) must exclude coverage of benzodiazepines, often used for treating anxiety and panic disorders.

    "That was in the actual legislation, so there's nothing CMS can do about that," explained Dr. Everett. Legislation was introduced in Congress in July to remove the exclusion of benzodiazepines from Medicare prescription drug coverage. As SAMHSA News was going to press, no conclusive action had been taken yet.

  • Possible confusion. "Navigating benefit programs is not an easy thing, especially with a brand-new program," said Andrew D. Hyman, J.D., Director of Government Relations and Legislative Counsel at the National Association of State Mental Health Directors. In addition, he noted that many individuals with mental illness are "poor and ill," increasing their vulnerability.

    Recognizing the need for clear and accessible explanations, SAMHSA has been working with a number of advocacy groups, such as the National Association of State Mental Health Program Directors, to provide specific information to people with mental illness and substance use disorders.

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Getting Help

"The Federal Government will work hard to ensure that Medicare beneficiaries understand their options," said President Bush in a recent address on Medicare.

By now, people with both Medicare and Medicaid should have received a letter from CMS explaining that they automatically qualify for extra help. And in the fall, CMS will also send Medicare & You 2006 to all Medicare beneficiaries. The handbook explains Medicare prescription drug coverage and contains a list of plans available in the area.

CMS will also partner with more than 90 patient, consumer, advocacy, and support organizations—the Access to Benefits Coalition—to provide personalized assistance.

SAMHSA is working with advocacy groups, provider groups, and other stakeholders to educate their members about the changes ahead. SAMHSA is also working with CMS to develop fact sheets and other materials.

SAMHSA News will report on continuing developments as they unfold. End of Article

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The State Perspective

Consumers aren't the only ones the Medicare Modernization Act will affect. "There's a lot of anxiety in the states about how this will affect them," said Charles Ingoglia, M.S.W., Special Expert in the Office of Program Analysis and Coordination in SAMHSA's Center for Mental Health Services.

Costs are a major concern. Currently, states match the Federal Government's contribution toward Medicaid beneficiaries' prescription drug costs. Shifting those costs from Medicaid to Medicare doesn't eliminate those costs, however. A provision called the "clawback" requires states to use the savings gained by no longer offering prescription drugs through Medicaid to reimburse the Federal Government in part for the new benefit.

Simply initiating the new program will also take money, said Andrew D. Hyman, J.D., Director of Government Relations and Legislative Counsel at the National Association of State Mental Health Directors. And at least some of the burden of helping consumers choose the Medicare prescription drug plan that's best for them will fall on state mental health agencies and their providers. "State mental health agencies have a huge responsibility when it comes to the issue of education and outreach," he said. End of Table

« See Part 1: Medicare Modernization Brings Big Changes

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Inside This Issue

Medicare Modernization Brings Big Changes
Part 1
Part 2

From the Administrator: Maximizing the Benefit of Medicare

Medicare Resources

Mental Health Action Agenda Released

Youth Voices: Speaking Out About Recovery

Recovery Month

Substance Use Among Pregnant Women

Raising Awareness About Fetal Alcohol Spectrum Disorders

Voice Awards

Measuring Outcomes To Improve Services

SAMHSA Awards First 2005 Grants

Adult Drivers Drinking, Using Drugs

Boulder, Boston Areas Report Most Marijuana Use

DAWN Data Released on Drug Deaths


SAMHSA News - July/August 2005, Volume 13, Number 4

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