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Medicare Part D & Ryan White HIV/AIDS Program

 
PDF Medicare Part D & Ryan White HIV/AIDS Program
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AIDS Drug Assistance Programs (ADAP)

Comparing drug coverage under Medicare versus ADAP.
ADAPs only cover HIV/AIDS related medications—not all drugs a Medicare beneficiary may need. Thus, ADAP coverage is not as good as Medicare coverage. An additional consideration in comparing ADAP to Medicare Part D coverage is that individuals on ADAP will have to pay a penalty for joining Part D after the deadline as ADAP is not considered to be creditable coverage by CMS.

Use of ADAP funds to pay a Medicare beneficiary’s prescription benefit costs. Consideration of factors such as ADAP payments not counting toward true-out-of-pocket (TrOOP) costs.
Yes, ADAP funds may be used to pay all or part of a beneficiary’s prescription drug costs (premium, deductible, coinsurance, and/or co-pays), if the individual meets the State’s ADAP eligibility criteria. Grantees have flexibility in this matter, and are encouraged to develop policies regarding coverage of some or all of these costs after considering the ADAP program’s structure, costs, and resources, Medicare beneficiary need, and competing access issues such as waiting lists and the number of uninsured persons in the State living with HIV disease.

In developing these policies, there are several factors that grantees should keep in mind.

  • Most Medicare beneficiaries living with HIV/AIDS will qualify for a full or partial low-income subsidy (LIS) to help cover their prescription benefit costs.
  • Determining the costs to the ADAP for beneficiaries who do not qualify for the LIS will be a complex process. Grantees must take into account that these clients will not meet their TrOOP costs and satisfy the catastrophic level through ADAP payments. In addition, when these clients’ drug costs reach the Medicare Part D threshold (i.e., the point at which the client is responsible for the full cost of drugs), grantees should assess the relative merits of providing their HIV/AIDS medications through the ADAP for the remainder of the year.

However, if ADAP funds are used to cover the Medicare Part D premium for any ADAP-eligible clients in a given fiscal year, then ADAP should cover that cost for the entire year so that the client will be able to use Part D for their HIV/AIDS prescriptions the following year without incurring a penalty.

ADAPs and requiring clients who are Medicare-eligible to participate in Part D.
Yes. While participation in Medicare’s drug plans is voluntary, the Ryan White Program is the payer of last resort for HIV/AIDS care and treatment. Section 2617(b)(6)(F) of the CARE Act states that grantees must:

“…ensure that grant funds are not utilized to make payments for any item or service to the extent that payment has been made, or can reasonably be expected to be made, with respect to that item or service—(i) under any State compensation program, under an insurance policy, or under any Federal or State health benefits program.”

Since Medicare is a Federal health benefits and entitlement program, the Ryan White payer-of-last-resort requirement applies. Grantees must require Medicare-eligible ADAP clients to enroll in the prescription benefit.

There are multiple reasons that ADAP and other Ryan White programs should actively pursue enrollment of their Medicare-eligible clients into Part D.

  • Most people on Medicare with HIV/AIDS will qualify for extra help in paying for the Medicare drug plan, and Part D covers non HIV/AIDS drugs.
  • Declining the Part D prescription benefit would mean losing access to the complete range of FDA-approved medications that people living with HIV typically need. ADAP programs best serve their clients who are Medicare beneficiaries—or who later become eligible—by making sure they know where to obtain comprehensive counseling on the health and financial consequences of declining enrollment.
  • Under Medicare rules, beneficiaries will have to pay a late enrollment penalty in future years if they are eligible to enroll in the prescription benefit, do not enroll by the deadline, and do not have creditable coverage for a continuous period of 63 days or longer.

Because ADAP formularies are limited to HIV/AIDS-related medications, basic ADAP coverage will not meet Medicare’s standard for creditable drug coverage. Therefore, beneficiaries who decline the prescription benefit and then change their mind when they need access to a broader range of medicine for other health problems will be subject to late penalties. The late enrollment penalty is one percent more per month for the premium for each month the beneficiary waits to enroll; and beneficiaries will have to pay the higher premium penalty for as long as they have Medicare prescription drug coverage.

ADAPs and ensuring that Medicare-eligible clients enroll in Medicare Part D, and what they can do if a client refuses to enroll.

As the payer of last resort, ADAPs can ensure enrollment in Medicare Part D using a process consistent with their policies for ensuring that eligible clients enroll in the Medicaid program. Since states historically have had flexibility in implementing policies and processes regarding Medicaid eligibility and ADAP coverage, and as the issues are similar regarding Medicare Part D, HRSA would expect to see consistency in how an individual ADAP handles Medicaid and Medicare eligibility within their state. Like the Medicaid program, participation in Medicare Part D is voluntary for the individual but there are significant penalties attached to the refusal of an eligible client to participate. If after extensive counseling, an individual refuses to participate in Medicare Part D, the ADAP has the option of disenrolling the person from ADAP and finding other viable options for medication coverage, or documenting the client's refusal and continuing coverage in ADAP. In such a situation, under no circumstances should ADAP funds be used to pay Medicare Part D penalties if a client chooses to participate at a later date.

ADAP as the payer-of-last-resort and retaining/dropping current clients who are Medicare beneficiaries and directing them to get their HIV/AIDS medications through Part D.
While it is true that ADAP is the payer of last resort and therefore must require that their Medicare beneficiaries enroll in Part D, this does not mean that ADAPs must drop these clients. States do have flexibility in determining their eligibility criteria as well as policies with respect to covering the Part D out-of-pocket costs of ADAP clients. However, HRSA expects and strongly encourages ADAPs to NOT disenroll any ADAP clients—including those who are Medicare beneficiaries—without first making sure they have a viable option for continuing their antiretroviral drug coverage.

In most cases, it will be more cost-effective for an ADAP to cover the Part D out-of-pocket costs for HIV/AIDS-related drugs for clients who are Medicare beneficiaries (rather than providing those drugs through ADAP), because the majority of people living with HIV/AIDS who are on Medicare will qualify for extra help. For beneficiaries who do not qualify for extra help, there are a variety of options that ADAPs may consider, including the following.

  • Cover the beneficiary's Part D cost-sharing expenses and use Part D to provide their HIV/AIDS drugs until the client reaches the coverage gap (donut hole); then use the ADAP program for the balance of the year.
  • Utilize an alternative health insurance option if one is available through the ADAP and it meets Medicare's criteria of creditable insurance.
  • If the State operates a state pharmacy assistance program (SPAP), ADAPs can explore with state officials the feasibility of coordinating ADAP and SPAP eligibility and enrollment. (Please also see the other Q's/A's regarding SPAPs.)

ADAPs and administratively handling Medicare Part D costs (premiums, deductibles, coinsurance and co-pays). Who receives payments for premiums. How to manage other costs at the pharmacy point-of-service. How to keep track of multiple plan choices that beneficiaries can select.
CMS requires Part D drug plans to coordinate with ADAPs. Because ADAPs are structured differently in different States and have differing resources, each ADAP considers what mechanism allowable under CMS guidelines is most efficient and cost-effective. CMS' Coordination of Benefits (COB) guidance indicates how secondary payers like ADAPs can coordinate with plans on premium payments and wraparound assistance. The automated COB option, which requires that ADAPs enter into front-end data-sharing agreements with CMS for eligibility file exchanges, is probably preferable for beneficiaries because it provides the most seamless coverage (benefits are provided at point of sale and TrOOP is also updated on a real-time basis). However, to do so requires administrative and operations capacity on the part of ADAPs. ADAPs can participate in the CMS eligibility data exchange and pay for their wrap around benefits at the point of sale or they can submit paper claims after the point of sale transaction. Information on the various plan options, as well as their formularies, is available.

Administrative challenges of working with a large number of prescription drug plans, Can ADAPs limit the number of plans with which they will provide cost assistance.
Yes. While Part D drug plans are required to coordinate with ADAPs, CMS cannot require ADAPs to coordinate with all drug plans. CMS does not determine the level of benefits ADAP will provide and to whom these benefits should be provided. Additionally, ADAP assistance with Medicare costs is not required for ADAPs.

Limiting plans they work with may be the only way some ADAPs can administer such assistance, especially in the short-term. For example, ADAPs may wish to limit assistance to those Medicare beneficiaries enrolled in plans that have contracts with 340b pharmacies that ADAPs work with. While this may theoretically limit choice for Medicare beneficiaries, participation in ADAP is voluntary for Medicare beneficiaries.

Use of ADAP funds—Federal or State—to contract with a charitable organization to pay the Medicare Part D premium, deductible, co-insurance and/or co-pays of clients who are Medicare beneficiaries.
ADAP (and other Ryan White) funds used to make Part D cost-sharing payments on behalf of clients will not count towards TrOOP, whether ADAP dollars are used directly or indirectly through a charitable organization.

A grantee may choose to contract a portion of ADAP funds for the purpose of making and tracking payments on behalf of clients to cover their Part D premium, deductible, coinsurance and/or co-pays costs, if doing so will provide the most efficient, cost-effective mechanism for handling those payments. The grantee must make sure that the contractor has adequate systems in place to:

  • Track client-level Medicare Part D payments
  • Coordinate with each client’s prescription drug plan, and
  • Provide the grantee with the time-sensitive documentation needed to assess the cost-neutrality of using Medicare Part D in relation to providing the client’s HIV/AIDS medications through ADAP.

Situations where a 340B participating ADAP covers the Part D out-of-pocket costs for clients who are Medicare beneficiaries. ADAP collection of full rebates through the State ADAP 340B rebate program from drug manufacturers on co-payment, or partial payment costs for the drugs provided to these clients through a Medicare prescription drug plan.
Yes.Consult the letter to Ryan White Part B (Title II) grantees and ADAPs from the HIV/AIDS Bureau dated 4/29/2005. It clarified conditions under which ADAPs participating in the State ADAP 340B rebate program, and using ADAP funds to purchase health insurance for clients to provide their HIV/AIDS medications, can request full rebates for partial payments from the drug manufacturers through the State ADAP 340B rebate program.

ADAPs can claim full rebates on partial pay claims if the grantee pays the client’s deductible and/or their coinsurance and co-pays. This applies regardless of whether or not the ADAP pays the premium; but just paying the premium does not entitle the ADAP to rebates under the State ADAP 340B rebate option as the ADAP does not make a payment directly for the drugs.

To collect the rebates, ADAPs need to work out arrangements with Medicare prescription drug plan(s) (PDP) to do the following.

  • ADAPs need to make payments to the PDP on behalf of beneficiaries because ADAPs and Ryan White grantees may NOT make payments directly to clients.
  • ADAPs need to receive from the PDP claim-level data to collect rebates on prescriptions for beneficiaries who are ADAP clients, keeping in mind that rebates are usually collected quarterly. For example, ADAPs probably need to know the following for each National Drug Code (NDC) dispensed during a reporting period:
    • The drug name for that NDC
    • The form of drug dispensed
    • The quantity dispensed
    • The number of ADAP-covered prescriptions filled for that NDC
    • The amount(s) reimbursed by the ADAP to the PDP for those prescriptions (i.e., payments toward deductible, coinsurance, co-pays)