1. October 1, 2010 Leslie Fried, ABA Commission on Law & Aging Health Care Reform & Medicare: The Basics (and a little more) Leslie Fried, Esq. ABA Commission on Law & Aging

2. October 1, 2010 Leslie Fried, ABA Commission on Law & Aging Brief Legislative History of Patient Protection & Affordable Care Act of 2010 Over a year of various proposals and debate Over a year of various proposals and debate Senate passed it on December 24, 2009 Senate passed it on December 24, 2009 House passed Senate version 3/21/10 House passed Senate version 3/21/10 President signed into law, 3/23/10 President signed into law, 3/23/10 House passed Reconciliation bill and sent to Senate on 3/21/10 House passed Reconciliation bill and sent to Senate on 3/21/10 Senate made a couple of changes, sent back to House, which passed it again on 3/25/10 Senate made a couple of changes, sent back to House, which passed it again on 3/25/10 President signed the reconciliation into law 3/30/10 President signed the reconciliation into law 3/30/10

3. October 1, 2010 Leslie Fried, ABA Commission on Law & Aging 2010 & 2011: Medicare Overview Part D: Rebate (2010) and beginning gradual closure of the coverage gap (2011) Part D: Rebate (2010) and beginning gradual closure of the coverage gap (2011) Annual wellness visit and personalized prevention assessment plan; eliminate cost sharing on some preventive services (2011) Annual wellness visit and personalized prevention assessment plan; eliminate cost sharing on some preventive services (2011) Restructure payments to Medicare Advantage (MA) plans (2011) Restructure payments to Medicare Advantage (MA) plans (2011) Reduce market basket updates to institutional providers, including nursing facilities (2010) Reduce market basket updates to institutional providers, including nursing facilities (2010) Establish new Center for Innovation (2011) Establish new Center for Innovation (2011)

4. October 1, 2010 Leslie Fried, ABA Commission on Law & Aging Part D: Phased in subsidies of the coverage gap Phased in subsidies in the coverage gap Phased in subsidies in the coverage gap 2010 only - $250 rebate 2010 only - $250 rebate 2011-2020 - phased in subsidies 2011-2020 - phased in subsidies Generic drugs: government subsidy 7% in 2011 increases to 75% by 2020. Generic drugs: government subsidy 7% in 2011 increases to 75% by 2020. Brand drugs: Brand drugs: 50 percent discount from pharmaceutical manufacturers beginning 2011. 50 percent discount from pharmaceutical manufacturers beginning 2011. 2013-2020 - government subsidy of 2.5% in 2013 increases to 25% by 2020 2013-2020 - government subsidy of 2.5% in 2013 increases to 25% by 2020

5. October 1, 2010 Leslie Fried, ABA Commission on Law & Aging $250 Rebate Check Who is eligible? Beneficiaries who are: Who is eligible? Beneficiaries who are: Enrolled in a Part D drug plan Enrolled in a Part D drug plan Enters the coverage gap in 2010 Enters the coverage gap in 2010 Not receiving LIS or Medicaid benefits Not receiving LIS or Medicaid benefits Beneficiaries do not have to do anything to get the check. Beneficiaries do not have to do anything to get the check. Lag time of 45 days to 4 months; Paper checks mailed to address on file with the SSA Lag time of 45 days to 4 months; Paper checks mailed to address on file with the SSA

6. SOURCE: Kaiser Family Foundation illustration of standard Medicare drug benefit for 2020 under the Patient Protection and Affordable Care Act (P.L. 111-148), as amended by the Health Care and Education Reconciliation Act of 2010. 75% paid by plan 15% paid by plan; 80% paid by Medicare 5% paid by enrollee Brands: 50% discount 25% paid by plan Generics: 75% paid by plan 25% paid by enrollee 100% paid by enrollee Initial coverage limit Catastrophic coverage Medicare’s “Standard” Drug Benefit in 2020 25% paid by enrollee Deductible

7. Cost Sharing for Brand-Name Drugs in the Medicare Part D Coverage Gap, 2010-2020 minus $250 rebate SOURCE: Kaiser Family Foundation analysis of the standard Medicare drug benefit under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010.

8. Cost Sharing for Generic Drugs in the Medicare Part D Coverage Gap, 2010-2020 SOURCE: Kaiser Family Foundation analysis of the standard Medicare drug benefit under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010.

9. October 1, 2010 Leslie Fried, ABA Commission on Law & Aging The Weeds Definition of covered Part D drug will change: Definition of covered Part D drug will change: All Part D drugs must be covered by a manufacturer discount agreement with Secretary All Part D drugs must be covered by a manufacturer discount agreement with Secretary Agreement applies to all manufacturers for all its drugs Agreement applies to all manufacturers for all its drugs Exceptions (CMS hopes not to apply this authority) Exceptions (CMS hopes not to apply this authority) Essential to the health of Part D enrollees Essential to the health of Part D enrollees Extenuating circumstances for 2011 Extenuating circumstances for 2011

10. October 1, 2010 Leslie Fried, ABA Commission on Law & Aging More Weeds Covered in the “discount” – negotiated price of the drugs, including sales tax and vaccine administration. Covered in the “discount” – negotiated price of the drugs, including sales tax and vaccine administration. Not the dispensing fee except for straddle claims Not the dispensing fee except for straddle claims Discount will be provided at the pharmacy counter (Point of Service) Discount will be provided at the pharmacy counter (Point of Service) Manufacturers will make discount payments directly to plans within 14 days of invoice from CMS contractor Manufacturers will make discount payments directly to plans within 14 days of invoice from CMS contractor CMS cannot touch the money CMS cannot touch the money

11. October 1, 2010 Leslie Fried, ABA Commission on Law & Aging Getting the Discount To get the discount during the coverage gap: To get the discount during the coverage gap: Enrolled in a PDP or MA-PD plan Enrolled in a PDP or MA-PD plan Drug must be on the formulary, or the enrollee obtained an exception Drug must be on the formulary, or the enrollee obtained an exception The enrollee is not LIS or Medicaid The enrollee is not LIS or Medicaid Enrollee is partly or wholly in the coverage gap Enrollee is partly or wholly in the coverage gap

12. October 1, 2010 Leslie Fried, ABA Commission on Law & Aging Access to Information For Prescribers: if a manufacturer does not sign an agreement, none of its drugs are Part D drugs For Prescribers: if a manufacturer does not sign an agreement, none of its drugs are Part D drugs At Pharmacy: Enrollees should receive better information on what is covered, how much is discounted At Pharmacy: Enrollees should receive better information on what is covered, how much is discounted Confusing if a straddle claim; or if enrollee has supplemental coverage which will pay first, before discount; or if other health benefits (eg SPAP) which pays after discount Confusing if a straddle claim; or if enrollee has supplemental coverage which will pay first, before discount; or if other health benefits (eg SPAP) which pays after discount Coverage Determinations and Appeals apply Coverage Determinations and Appeals apply

13. October 1, 2010 Leslie Fried, ABA Commission on Law & Aging Important Issues for Patient/Beneficiary Advocates Messaging: Need to provide information in simple and understandable language Messaging: Need to provide information in simple and understandable language New and improved EOB: enrollees can follow status of TrOOP New and improved EOB: enrollees can follow status of TrOOP Accuracy of Information: especially about drug prices Accuracy of Information: especially about drug prices Privacy: important that enrollees information is protected Privacy: important that enrollees information is protected

14. October 1, 2010 Leslie Fried, ABA Commission on Law & Aging Annual Wellness Visit & Preventive Services Provides an annual wellness visit and personalized prevention plan services as of 1/2011 Provides an annual wellness visit and personalized prevention plan services as of 1/2011 Every 12 months, starting 12 months after Welcome to Medicare exam Every 12 months, starting 12 months after Welcome to Medicare exam No cost-sharing for visit No cost-sharing for visit Includes personal risk assessment & prevention plan services (exam for height, weigh, BMI, blood pressure, detection for cognitive impairment, updates for medical and family history, lost of risk factors, screening schedule for 5-10 years and more) Includes personal risk assessment & prevention plan services (exam for height, weigh, BMI, blood pressure, detection for cognitive impairment, updates for medical and family history, lost of risk factors, screening schedule for 5-10 years and more) Eliminates cost-sharing for some preventive services, effective 1/2011 Eliminates cost-sharing for some preventive services, effective 1/2011

15. October 1, 2010 Leslie Fried, ABA Commission on Law & Aging Medicare 2011 Part D Plans Open enrollment for 2011 play year is November 15 – December 31 Open enrollment for 2011 play year is November 15 – December 31 Average PDP plans premium increased by $1 Average PDP plans premium increased by $1 Average MA-PDP plans decreased by 1% Average MA-PDP plans decreased by 1% Reduction in plans this year Reduction in plans this year 1.2 million individuals affected by non-renewals and will have an SEP until 1/21/11 1.2 million individuals affected by non-renewals and will have an SEP until 1/21/11 600,000 LIS will have to be re-assigned 600,000 LIS will have to be re-assigned For state by state fact sheets, go to www.cms.gov/center/openenrollment.asp For state by state fact sheets, go to www.cms.gov/center/openenrollment.asp www.cms.gov/center/openenrollment.asp

16. October 1, 2010 Leslie Fried, ABA Commission on Law & Aging New: Medicare Disenrollment Period January 1 – February 14, 2011 January 1 – February 14, 2011 Medicare beneficiaries can disenroll from Medicare Advantage plans and return to Original Medicare Medicare beneficiaries can disenroll from Medicare Advantage plans and return to Original Medicare Beneficiaries will be able to join a Medicare PDP at this time Beneficiaries will be able to join a Medicare PDP at this time

17. October 1, 2010 Leslie Fried, ABA Commission on Law & Aging 2011: Cost Containment New Center for Medicare & Medicaid Innovation within CMS New Center for Medicare & Medicaid Innovation within CMS Will test, evaluate and expand different payment structures to foster patient-centered care and care coordination across treatment centers and slow cost growth Will test, evaluate and expand different payment structures to foster patient-centered care and care coordination across treatment centers and slow cost growth Freeze income threshold for income-related Part B premiums at 2010 level; Ties Medicare Part D premiums to income for those with incomes above $85K individual/$170K couple Freeze income threshold for income-related Part B premiums at 2010 level; Ties Medicare Part D premiums to income for those with incomes above $85K individual/$170K couple

18. October 1, 2010 Leslie Fried, ABA Commission on Law & Aging 2011: Medicare Advantage Prohibits MA plans from imposing higher cost sharing for some Medicare covered benefits Prohibits MA plans from imposing higher cost sharing for some Medicare covered benefits Restructure payment to plans by phasing payments to different percentages of Medicare FFS Restructure payment to plans by phasing payments to different percentages of Medicare FFS 2010 average is 114% of FFS 2010 average is 114% of FFS Medicare 2011 payments to plans frozen at 2010 rates Medicare 2011 payments to plans frozen at 2010 rates Cuts in MA payments but not in mandated services (could result in cut in extra/optional benefits) Cuts in MA payments but not in mandated services (could result in cut in extra/optional benefits)

19. October 1, 2010 Leslie Fried, ABA Commission on Law & Aging 2012 and beyond Annual Part D and MA plan enrollment period shifts backward to October 15 – December 7, 2011 for 2012 plan year Annual Part D and MA plan enrollment period shifts backward to October 15 – December 7, 2011 for 2012 plan year A variety of models, demonstration and pilot programs, to promote quality care and cared coordination including A variety of models, demonstration and pilot programs, to promote quality care and cared coordination including Accountable Care Organizations – take responsibility for costs and quality of care of patients Accountable Care Organizations – take responsibility for costs and quality of care of patients Medical homes for individuals with chronic conditions Medical homes for individuals with chronic conditions Medicare Hospice Concurrent Care Demo Medicare Hospice Concurrent Care Demo Medicare Independence at Home demo. Which provides high- need beneficiaries with primary care services in their homes Medicare Independence at Home demo. Which provides high- need beneficiaries with primary care services in their homes Bundled payments per episode of care pilot Bundled payments per episode of care pilot Medicare Shared Savings Program to coordinate services under Parts A and B Medicare Shared Savings Program to coordinate services under Parts A and B

20. October 1, 2010 Leslie Fried, ABA Commission on Law & Aging Independent Payment Advisory Board 15 members, leading experts, appointed by the president for 6-year terms, and 3 HHS officials 15 members, leading experts, appointed by the president for 6-year terms, and 3 HHS officials Membership on IPAB is a full-time job Membership on IPAB is a full-time job Makes recommendations to Congress to reduce Medicare spending if spending exceeds target growth rate; which Congress must consider under an expedited procedure Makes recommendations to Congress to reduce Medicare spending if spending exceeds target growth rate; which Congress must consider under an expedited procedure Makes annual detailed reports to Congress on health care costs, access and more Makes annual detailed reports to Congress on health care costs, access and more

21. October 1, 2010 Leslie Fried, ABA Commission on Law & Aging Changes for Nursing Facility Requires nursing home disclose their owners Requires nursing home disclose their owners Establishes Quality Assurance Performance Improvement Program to improve quality assurance standards Establishes Quality Assurance Performance Improvement Program to improve quality assurance standards Report information about how well nursing homes are staffed and direct care staff costs Report information about how well nursing homes are staffed and direct care staff costs Provides training for workers who care for residents with dementia and to prevent abuse Provides training for workers who care for residents with dementia and to prevent abuse Initial training of 75 hours Initial training of 75 hours

22. October 1, 2010 Leslie Fried, ABA Commission on Law & Aging Equal Justice Act Establishes Elder Justice Coordinating Council to coordinate activities (govt and private agencies) relating to elder abuse, neglect and exploitation Establishes Elder Justice Coordinating Council to coordinate activities (govt and private agencies) relating to elder abuse, neglect and exploitation Additional funding for Adult Protective Services (APS) and LTC Ombudsman programs Additional funding for Adult Protective Services (APS) and LTC Ombudsman programs Establish and support forensic centers relating to elder abuse, neglect and exploitation Establish and support forensic centers relating to elder abuse, neglect and exploitation Grants to enhance LTC staffing Grants to enhance LTC staffing

23. October 1, 2010 Leslie Fried, ABA Commission on Law & Aging CLASS Act Establishes new public LTC insurance program Establishes new public LTC insurance program Purchase of community living assistance services and supports by individuals with functional impairments Purchase of community living assistance services and supports by individuals with functional impairments Financed through voluntary payroll deductions or contributions; automatic enrollment with opt-out Financed through voluntary payroll deductions or contributions; automatic enrollment with opt-out 5 year vesting 5 year vesting

24. October 1, 2010 Leslie Fried, ABA Commission on Law & Aging CLASS Act Enrollees eligible for benefits after meeting disability criteria that is expected to last at least 90 days Enrollees eligible for benefits after meeting disability criteria that is expected to last at least 90 days If eligible, a cash benefit will be paid based on functional ability, averaging not less than $50 a day If eligible, a cash benefit will be paid based on functional ability, averaging not less than $50 a day Secy of HHS required to establish premiums to ensure solvency for 75 years Secy of HHS required to establish premiums to ensure solvency for 75 years Treated in same manner as a LTC insurance policy Treated in same manner as a LTC insurance policy

25. October 1, 2010 Leslie Fried, ABA Commission on Law & Aging Final Thoughts about Health Reform Implementation through guidance and regulations is where the rubber hits the road Implementation through guidance and regulations is where the rubber hits the road CBO Projections – extends the Medicare Trust fund by 12 years to 2029 and will save $124 billion over 10 years CBO Projections – extends the Medicare Trust fund by 12 years to 2029 and will save $124 billion over 10 years Important provisions for older adults and provide support for the continuum of care for seniors Important provisions for older adults and provide support for the continuum of care for seniors

26. October 1, 2010 Leslie Fried, ABA Commission on Law & Aging Hot Issue: Hospital Observation Cases on the Rise Observation status are patients who are in the hospital but treated as outpatient rather than inpatient Observation status are patients who are in the hospital but treated as outpatient rather than inpatient Should be limited to 24 – 48 hours but increasing trend of much longer Should be limited to 24 – 48 hours but increasing trend of much longer Results in higher cost-sharing for patient Results in higher cost-sharing for patient Outpatient time doesn’t count toward 3 days for SNF care Outpatient time doesn’t count toward 3 days for SNF care

27. October 1, 2010 Leslie Fried, ABA Commission on Law & Aging Hot Issue: Improvement Standard For years, individuals with chronic, debilitating and degenerative conditions denied skilled therapy if patient’s condition won’t “improve” For years, individuals with chronic, debilitating and degenerative conditions denied skilled therapy if patient’s condition won’t “improve” Federal law supports coverage of maintenance therapy; restoration not required Federal law supports coverage of maintenance therapy; restoration not required Center for Medicare Advocacy is looking for plaintiffs for a lawsuit Center for Medicare Advocacy is looking for plaintiffs for a lawsuit