1. State Medicaid Challenges: Implementing Medicare Part D
Barbara Coulter Edwards
Ohio Medicaid Director
October 7, 2004
NGA Web Cast, 8/17/04

2. Impact on Dual Eligibles
Full-benefit duals, QIs, SLMBs, QMBs are deemed eligible for full low income subsidy
Full-benefit duals will be auto-enrolled (when, which plans?)
Adequacy of Part D formulary; non-Part D drugs – transition challenges
Impact on other utilization (nfs, disease mgmt)
NGA Web Cast, 8/17/04

3. New Business Relationships
Effective implementation of Part D for low income Medicare beneficiaries will require information sharing across multiple systems:
SSA and Medicare
SSA and Medicaid
Medicaid and Medicare (parts A, B,C and D!)
Medicaid and private plans
Medicaid and SPAPs
Medicaid and state insurance departments
A number of challenges exist in terms of sharing data. Information sharing demands are and will require relationships to be developed and systems to be reformed to support multiple interfaces:
SSA and Medicaid
SSA and Medicare
Medicaid and Medicare
Medicaid and private plans
Medicaid and Part A, B, C
Medicaid and SPAPs
Medicaid and state insurance departments
None of the above has a good track record of successful, effective or timely communication and cooperation in the past. Can these relationships be established? Yes, given enough time. Can they all be established successfully before January 2006? Not possible!
NGA Web Cast, 8/17/04

4. Information Technology
IT systems changes will be required:
Data sharing with other entities
New reporting formats
Low income subsidy eligibility determinations - Will states use SSA application and process?
Challenges:
HIPAA (continued!)
Shared data systems
Competing priorities
Information Technology challenges will be significant.
At the same time that MMA is to be implemented, states are faced with other systems demands:
HIPAA implementation is on-going,
Federal Payment Error Rate Measurement (PERM) will be implemented in Oct 06,
State Medicaid eligibility systems must share with other public programs like TANF, food stamps
All of which complicate the ability to reform systems for Medicare subsidy determinations.
NGA Web Cast, 8/17/04

5. Future Budgeting
States are developing future budgets now, and we lack critical information:
“Clawback” payment amounts
’03 base too high?
National inflation factors too high?
Enrollment impact on Medicaid - a “woodwork effect” for duals?
Budget challenges.
States are developing budgets now for future periods, in some cases for two years. How can we predict what we don’t know like:
clawback amount,
woodwork effect,
national inflation factors
NGA Web Cast, 8/17/04

6. Current Resources Reality for states: >Years of budget cuts.
States need time, money, and people to accomplish the significant changes required by MMA.
Reality for states:
>Years of budget cuts.
>No new funding for state share of costs.
>Competing state priorities (control costs!).
>Not enough time allowed by MMA.
Resource challenges.
States need people, time and money to accomplish the Medicare reforms in MMA. Yet, States continue to face fiscal challenges and budget cuts to systems, staffing.
In addition, there are conflicting priorities at the state level, principally cost-cutting for Medicaid, but also long term care reforms, etc.
Administrative costs of MMA (systems reforms, eligibility determinations) are unfunded for state share. SPAPs received some grant funds for outreach and enrollment, but state Medicaid programs did not.
The time frame between now and January 1, 2006 is too short for most systems projects.
NGA Web Cast, 8/17/04

7. Will duals be harmed?
Medicaid Rx coverage stops , whether consumers, states, or PDPs are ready or not.
If states and PDPs aren’t ready, vulnerable consumers may be harmed.
Should CMS require states, PDPs to pass “readiness reviews” before implementing Part D?
Perhaps CMS, in order to fully protect the dually eligible Medicare consumers, should not allow states to move to Part D participation for dually eligible consumers until they have passed a “readiness review” that would require demonstration of effective data sharing, systems reforms, appropriate notice to consumers, interface with private plans to facilitate enrollment, etc.
Dual Eligibles could be harmed if, on January 2006, all Medicaid Rx ceases for dually eligible consumers, but the systems are not in place to assure that all consumers have been successfully enrolled in an adequate Part D plan.
The dually eligible population is fully insured by Medicaid today for Rx. They would not be harmed by a delay in implementation beyond January 2006.
NGA Web Cast, 8/17/04

8. CMS State Issues Work Group
SSA Interaction (subsidy application and enrollment outreach)
Coordination of Benefits (transition for duals)
Notice Requirements
Data Coordination
“Clawback” Calculation (alternative ’03 reporting)
NGA Web Cast, 8/17/04