1 Ten Things Your Clients Wish You Knew About Medicare A CLE presentation for the CBA Elder Law Section Alice Ierley, Esq. Brown & Ierley, LLC alice@brownandierley.com 303-835-7001 Higher income clients: 1. Income Related Monthly Adjusted Amount (IRMAA) Part B and Part D premium surcharges based on income; appeal process is available; currently impacts 6% of all beneficiaries; policy discussions underway to either lower threshold of IRMAA so more paying, and/or increase amount of subsidies (Medicare Access and CHIP Reauthorization Act pending legislation)
2 Lower Income Clients: 2. Low Income Subsidy (LIS or Extra Help) help with Part D premiums, copays, and deductibles; automatic for those on Medicaid; otherwise have to apply; SSA processes eligibility. Asset limit including $1500 burial allowance. Sliding scale of assistance. 2015 LIS (up to 150% FPL) Income Assets Individual $1,471 $13,640 Couple $1,991 $27,250 3. Medicare Savings Program (MSP) this is a Medicaid program for help with Part B premiums; in some cases copays and deductibles. But note no help with copays for the 100% - 138%. When Medicaid expansion population age into Medicare, will have significant increase in out of pocket costs, and they will face an asset test so fewer will qualify even for the premium assistance. Policy issued for aging, same for those on SSI Medicaid (but for age/disability status could qualify for Medicaid regardless of assets). Loophole theory?
3 QI (121-135% FPL) Income Assets Pays Part B premium Individual $1,345 $7,280 Couple $1,813 $10,930 SLMB (between 100-120% FPL) Pays Part B premium Individual $1,197 same as above Couple $1,613 QMB (below 100% FPL + $20) Pays Part B premium, pays plus copays, deductibles Individual $1,001 Couple $1,348 4. Part D plan selection importance particularly for LIS population; despite LIS and/or Medicaid eligibility, help with costs only applies if Rx on plan formulary. Can result in thousands of dollars difference. Auto enrollment for large portion of lower income population random choice. Options: a. Can change plans any time (LIS only) b. Doc choose comparable drug that is on formulary c. Can request exception to formulary (but still relatively costly) LGBT 5. Same sex marriage Medicare benefits: availability; status; duration of marriage/divorce (full print out of section at end of materials)
4 Highlights: a. General rules of duration requirement for spouse s eligibility for Medicare: Current spouse - one year Surviving spouse nine months Divorced spouse ten years (lots more specifics, exceptions, etc) b. Age: insured individual 62 or older, uninsured individual 65 or disabled c. August of 2014, SSA rules developed to address non-marital legal relationships. d. Look to law of state of number holder s domicile (at time of application, for living NH, or at time of death, for survivor situation) e. Colorado: a. Married? Yes, if married in Colorado or if Colorado recognizes out of state marriage. Yes, if married elsewhere but treated as civil union, because of (b); marriage recognized, in state or out of state, as of October 7, 2014 b. Civil union? Yes, because right to inherit as each other s spouse included in statute. Duration start date: date of union (legal as of May 1, 2013)
5 c. Designated beneficiary? Yes, unless right to inherit as each other s spouse specifically excluded in DBA d. Duration start date: date DBA signed (legal as of July 1, 2009) e. Combination of periods of eligibility to qualify? Not decided yet (SSA will seek legal opinion on filing) f. Special Enrollment Period (SEP) delaying enrollment into Part B due to ACTIVE employment of self or spouse applies to same sex marriages, but not other legal relationships such as civil unions General: 6. Lifetime penalties Part D and Part B for late enrollment: Sign up when eligible unless have other creditable coverage. Numerous instances of creditable coverage. Some appeal rights. a. Part D i. Common scenario - sign up for Medicare, taking no prescriptions, why sign up? ii. Penalty calculated on when should have signed up until when actually do sign up; assessed monthly as surcharge to Part D premiums iii. Charge 1% of national average premium for the year you sign up, multiply by number of months late. (2015 $33.13) iv. Example: 3 years late, 36 months x $.33 = $11.88 surcharge every month v. Not applicable to LIS. b. Part B i. Common scenarios 1. Have COBRA so spouse who is not yet 65 will be covered too; delayed Medicare Part B. Less likely now with ACA. But COBRA is NOT creditable coverage 2. Feel can t afford (no penalty if qualify for MSP) 3. Life got busy 4. I hate insurance, until I need it ii. Coverage from ACTIVE employment of self or spouse is creditable coverage; special enrollment period once coverage ends iii. Calculation of penalty: 10% of the current year s standard premium, multiplied by the number of 12 months periods in which delayed enrollment. Example: 2 years late, then
6 enrolled in 2015. For non IRMAA beneficiary, will be $104.90 + (2 x $10.49) = $125.88/mo c. Risk liability for improperly paid claims where by law Medicare should have been primary payer (despite failure to enroll) 7. Termination of Part B for non-payment: most people have Part B premium deducted from their SS payments; those not yet receiving retirement may have auto deduction from bank account or make quarterly payments. Missing payment can result in termination of Part B. Then can t get benefits until next open enrollment period (Jan Mar, with July effective date). If good cause for non-payment, can apply to SS for retroactive reinstatement. HI 01001.360.Likely will still have Part A. Can t purchase from individual marketplace during gap period. 8. Observation stay - 3 overnight rule: Requirement for Skilled Nursing Facility Medicare Part A coverage (first 20 days 100% covered). If never actually admitted even though overnights in hospital, or admitted but not for adequate length of time, hospital stay will be billed as a Part B benefit and Medicare won t pay for the SNF stay. May be more expensive to be billed under Part B for hospital stay than Part A (doc copays, medication coverage). Observation Stay push back: a. Litigation see Bagnall v. Sebelius No. 11-1703 (D.Conn) case challenges practice as resulting in deprivation of Part A coverage. Status update - in January, federal appeals court opinion stated that the lower court must determine exactly how, in practice, the relevant admissions decisions are made. It held that the district court erred when it dismissed the plaintiffs due process claims, and it sent the case back to that court for further proceedings. Stay tuned.. b. Legislation pending introduced again this year (HR 1571/SB 843) to count time rather than status to meet 3 day rule c. Agency action finalized rules in October 2013 designed to reduce instances of problematic observation stays. Two midnight rule providing guidance that when the physician expects the patient to require care that crosses two midnights and orders admission based upon that expectation, inpatient status is generally appropriate. Advocates see as inadequate protection.
7 9. No more improvement standard : Important especially for degenerative disease, chronic illness patients where skilled care needed to maintain condition or slow the decline and improvement standard inapplicable a. Court case challenged standard, Jimmo vs. Sebelius, No. 11-cv- 17 (D.Vt.), settlement clarifying that improvement not required to obtain Medicare coverage; pertains to Inpatient Rehabilitation Facilities (IRF), Skilled Nursing Facilities (SNF), Home Health Care (HH), and Outpatient Therapies (OPT but therapy cap still applies) b. CMS has now promulgated regulations and guidance to clarify; was never the official stance to require improvement but nonetheless improvement standard was generally used by claims processing contractors 10. Annual outpatient therapy caps and doc fix: Issue arises annually, subject of legislation again this year. a. Threshold is $1,920 allowed either combined physical and speech therapy, or as occupational therapy. b. Additional therapy up to total of $3,700 can be approved through Exceptions process but triggers mandatory review c. Doc fix legislation is patchwork legislation that keeps cuts to physician reimbursement rates from taking effect. Most years, in advance of the fix, publicity increases. Usually wraps in extension of therapy caps as well. d. Legislation pending
8 11. Just kidding about the TEN things!
9 12. Current federal legislation: 1. HR 2 Medicare Access & CHIP Reauthorization Act, some key aspects, as of 4/10/15: a. Extends therapy cap exceptions process including targeted review (end annual negotiation) b. QI permanent instead of periodically revisiting and reauthorizing, makes permanent plus increases allocation from $535 million to $980 million c. Medicare Supplements starting in 2020, policies cannot be sold to new beneficiaries that cover Part B annual deductibles d. IRMAA changes increases surcharge of Part B and Part D premiums (pay premium plus surcharge) percentages and changes income categories: i. $85K - $107K: 35% ii. $107K $133.5K: 50% iii. $133.5K - $160K: 65% iv. $160K+: 80% (ex: based on $104.90 = $188.82) e. Phase out use of SSN on Medicare cards f. Face to face requirement for approval of Durable Medical Equipment Rx modified g. MSN s to be made available electronically as option to reduce paper; consider frequency h. Two midnight rule extended to Sept. 2015 (observation status issue) 2. HR 1571 / S 843: change observation status problem by letting the clock dictate satisfaction of 3 day stay requirement, not status of inpatient versus observation stay for 3 days. This is the third year in a row this bill has been introduced. Introduced 3/24, still in committee as of 4/10. Source Materials Social Security Act of 1935 Title XVIII POMS (Social Security regs) https://secure.ssa.gov/apps10/poms.nsf/partlist!openview See especially GN 00210. Windsor Same Sex Marriage Claims CMS (Medicare regs) http://www.cms.gov/regulations-and- Guidance/Guidance/Manuals/Internet-Only-Manuals-IOMs.htm
10 Other Resources Center for Medicare Advocacy: http://www.medicareadvocacy.org NCOA Economic Security Center: http://www.ncoa.org/enhance-economicsecurity/center-for-benefits/ Colorado Division of Insurance SHIP: http://www.dora.colorado.gov/ship Kaiser Family Foundation: http://www.kff.org/medicare KEPRO (Contractor for Beneficiary and Family Centered Care portion of QIO): www.kepropio.com