Deputy Commissioner Michelle Robleto,

Chair, NAIC PPACA Subgroup

Florida Office of Insurance Regulation

200 E. Gaines Street, Suite 121

Tallahassee, FL 32399-0326

 

Jane Sung, NAIC Senior Health Policy Analyst and Counsel

444 North Capitol Street, N.W., Suite 701

Washington, DC 20001

 

Dear Deputy Commissioner Robleto:

California Health Advocates (CHA) is an independent, non-profit consumer group that provides education and advocacy on behalf of California’s Medicare beneficiaries.  I represent CHA as a funded consumer representative to the NAIC and am an appointed consumer group member of the Medigap PPACA (B) Subgroup.

The subgroup has been discussing adding ways to add nominal cost sharing to Medigap plans C and F that will encourage the “appropriate use” of physician services under Part B of Medicare as specified in the Patient Protection and Affordable Care Act (PPACA).  Adding a copayment for office visits under Part B is one option the subgroup has discussed, and one that I have consistently opposed.

 

Cost sharing puts a financial barrier between the sickest beneficiaries and their doctor

Our organization firmly believes that applying copayments to office visits is a blunt instrument affecting sick people to a far greater degree than those who are not yet sick.  Copayments create a financial barrier likely to cause Medicare beneficiaries to delay or go without necessary care from their physicians.   Cost sharing by definition shifts cost to beneficiaries who use medical services, and clearly imposes the highest costs on people with chronic illnesses who use the most services.  This effect is well known in Medicaid where certain populations like infants are protected from cost sharing mechanisms to ensure that vulnerable populations receive medical and preventive care without restriction.^[1]

 

Cost Sharing Cannot “Encourage Appropriate Use” of Physician Services

The subgroup has not seen any studies that support copayments as a means of encouraging or discouraging the use of appropriate medical services.  In fact, some studies have shown that cost sharing methodology that reduces costs in one sector of health care is likely to increase costs in another.^[2] Examples of that dynamic include people “pill splitting” or reducing their daily dosage of expensive medications leading to other health care costs later, or cost sharing that reduces outpatient use and later results in higher inpatient costs. ^[3]

The subgroup has also heard from CMS and others of the impossibility of applying various amounts of cost sharing to particular types of office visits or other physician ordered medical services due to the complex nature of Medicare coding and reimbursement methods used to pay for these services.

 

Medicare beneficiaries already pay high out-of-pocket costs

It’s important to understand that Medicare beneficiaries pay Medicare Part B and D premiums, the cost of additional coverage such as retiree benefits, Medigap or Medicare Advantage, cost sharing for prescription drugs, and other expenses that are not covered by Medicare at all such as dental, vision, hearing, and long-term care.

Half of all beneficiaries with annual incomes of about $22,000 spent at least $3,138 in out-of-pocket costs for their health care expenses.^[4] About 10 percent of all beneficiaries spent as much as $7,861 on their health care.  Additional front end costs in the form of copayments for office visits will add yet another amount to the costs beneficiaries already pay from fixed incomes.

 

Existing cost sharing Medigap plans

Only one Medigap benefit package, Plan F, eliminates all cost sharing.  The remaining standardized plans all impose some amount of cost sharing that Medicare beneficiaries over the years have largely shunned in an effort to protect themselves from large, unpredictable and unlimited amounts of medical costs.

Medigap Plan F, and Plan C that doesn’t cover excess charges, are the two most preferred Medigap plans by beneficiaries precisely because those plans provide predictable coverage for their Medicare covered expenses.  Both plans also provide a predictable cost each month that can be budgeted against existing income.  Most Medicare beneficiaries cannot afford large unpredictable medical expenses.  When those unpredictable costs occur it frequently means tapping existing assets to pay for them, and that in turn may reduce any earning capacity of those assets.

 

Conclusion

The NAIC has been asked to perform a nearly impossible feat, i.e., to determine an amount of nominal cost sharing based on peer reviewed studies that can be added to Medigap Plans C and F that will in turn result in more appropriate use of physician services.  The impetus for this task is based on a viewpoint that the mere fact of owning a retiree or Medigap plan causes over utilization of Medicare outpatient services.  No study yet presented to the subgroup has been able to connect higher utilization of Medicare covered services with care that was not medically necessary.  As one study notes, the effect of supplemental insurance cannot be clearly distinguished from unobserved personal characteristics associated with higher medical spending^.[5]

We disagree with the contention that the mere presence of supplemental benefits whether those are retiree, Medigap, or TriCARE for Life benefits, causes the inappropriate use of Medicare covered outpatient services.  We continue to oppose adding cost sharing to office visits, and to question whether it is even possible to meet the specific set of tasks the legislation requires.

We appreciate the opportunity to add our comments to this important discussion.

Sincerely,

Bonnie Burns, NAIC Consumer Representative

California Health Advocates

---

[1] Leighton and Wachino, “The Effect of Increased Cost-Sharing in Medicaid” Center on Budget and Policy Priorities, July 7, 2005

[2] Chandra A, Gruber J, McKnight R. “Patient Cost-Sharing and Hospitalization Offsets in the Elderly.” American Economic Review, vol. 100, no. 1, 2010.

[3] Wong et al.; American Journal of Public Health, November 2001, Vol.  91, No. 11, Increased Ambulatory Care Copayments and Hospitalizations among the Elderly.

[4] Lind, Keith D., JD, MS; Setting the Record Straight about Medicare, AARP Public Policy Institute.

[5] Cost sharing effects on spending and outcomes, Schwartz, Katherine, Ph.D., Robert Wood Johnson Research Synthesis Report No. 20, December 2010

 

Elders are particularly susceptible to identity theft, as they are often the target of phone and phishing scams. Some elders have granted powers of attorney giving wide access to their personal information; and most elders’ Medicare cards list their Social Security numbers. In addition, their personal information can be vulnerable in hospitals, nursing homes, and other care facilities.

During the current public comment period, the FTC is particularly looking for information on:

Comments can be submitted to the FTC through July 15, 2012. While people can submit information electronically or in paper form, the FTC recommends you send them electronically for ease of retreival. Here’s the link: https://ftcpublic.commentworks.com/ftc/senioridtheft. If you do send in paper comments by mail,  send or deliver them to: Federal Trade Commission, Office of the Secretary, Room H-112 (Annex L), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Make sure you allow enough time for the FTC to receive them by July 15th as U.S. postal mail in the Washington area is subject to delay due to heightened security measures. Also make sure not to include any personal information in your comments as these will be open for public viewing.

See this FTC announcement (PDF) with more information on this call for comments.

See information on speakers and the conference agenda.

See information on the problem of elder financial abuse, identity theft, warning signs and how to report it.

One problem we’ve seen is that often the billing codes submitted by the ambulance transport company determines whether a beneficiary’s transport meets the medical necessity requirements. If the ambulance company doesn’t submit the proper codes that denote medical necessity, Medicare will often automatically deny a claim and then it is up to the beneficiary to file an appeal. Also, American Medical Response (AMR), one of the primary ambulance transport service providers in California, has had a policy that if Medicare denies an ambulance service, the beneficiary must pay the bill, or set up a payment plan within 30 days; otherwise, their bill goes to a collection agency. This 30-day policy is hardly enough time, especially if a beneficiary has been in the hospital and/or rehab, for s/he to find out about Medicare’s denied payment and file an appeal.

To remedy this situation, two Medicare advocates in Santa Cruz County, Health Insurance Counseling and Advocacy Program (HICAP) Program Manager, Debbie Reed, and Senior Medicare Patrol (SMP) Liaison, Evelyn Taylor set up a meeting with AMR and also arranged for them to speak at our recent biannual Medicare training conference in Pasadena, California. The meetings were a success and as a result, HICAP Program Managers and their volunteer counselors have a specific contact at AMR to call regarding ambulance billing questions. Also, if a HICAP/SMP advocate calls and states they are working with a beneficiary to appeal/resolve their ambulance trip directly with Medicare, AMR’s billing service, Patient Business Services (PBS) will automatically put the beneficiary’s account on hold for 90 days; this is two times as long as the previously noted 30-day policy. This will prevent the beneficiary’s claim from going to a collection agency while an appeal is filed and awaiting Medicare’s redetermination on the claim.

This is a great step forward in advocate and provider collaboration and a great win for beneficiaries. An article on a beneficiary whose successful ambulance appeal relates directly to this new agreement will be posted soon.

See Medicare’s Coverage of Ambulance Services (PDF), for more information on Medicare’s coverage of ambulance services.

“All Americans – including people with disabilities and seniors – should be able to live at home with the supports they need, participating in communities that value their contributions – rather than in nursing homes or other institutions,” said HHS Secretary Kathleen Sebelius in a statement released last week. Ensuring that these necessary supports are present requires a strong commuity living policy on the Federal level. It also requires using such policy to develop a multi-agency, multi-services approach that guarantees access to and the availabilty of  health care, as well as appropriate housing, employment, education, meaningful relationships and social participation. The new ACL aims to fulfill these requirements.

The ACL includes the Administration on Aging, the Administration on Developmental Disabilities and the Office on Disability, all of which will work together to establish a formal infrastructure to ensure consistency and coordination in community living policy across the Federal government. This is the next step following establishment of President Obama’s Community Living Initiative “to ensure the fullest inclusion of all people in the life of our nation.”

For more information, read HHS Secretary, Kathleen Sebelius’ recent statement on ACL.

Also visit the ACL website.

These free podcasts can be used for provider staff and caregiver trainings, or just played in providers’ waiting rooms. For more information for caregivers and providers, see the “Ask Medicare” section of Medicare.gov.

Fraud is one of the most expensive aspects of our health care system, costing American taxpayers and the Medicare system an estimated $80 billion per year — yet many say the real number could be as much as $160 billion. This is money going into the hands of fraudsters instead of into people’s care.

View a press release on tonight’s documentary.

See our Medicare fraud section for more information and resources on health care fraud, and for information on how to become a volunteer with our Senior Medicare Patrol project.

Below is an excerpt of some helpful Q&As from their latest podcast on diabetes supplies phone scams. Note that while they direct people to report suspected fraud to their OIG hotline, we also request that you first contact your local California Senior Medicare Patrol (SMP) project. We will forward such reportings to the OIG and/or other government agencies as appropriate. Our California SMP helpline is 1-855-613-7080.

Excerpt from the Podcast: Fraud Alert for People with Diabetes

How do you know if a call is a scam?

You should be suspicious of anyone who offers free Medicare items or services. Medicare does not make calls offering supplies or services to patients. So if someone calls you claiming to be from Medicare, it’s a red flag.

Be wary of unsolicited calls because medical suppliers are not supposed to call you without prior permission. So if you receive an unsolicited call offering free supplies or other medical goods, you should be on alert.

What if they ask you for financial information?

You should be particularly suspicious of any callers who ask for your Medicare or any other financial information. These scammers may want to trick you into revealing your personal information by asking you to verify your Medicare number. Don’t give your Medicare number or other personal information to the caller. Once your Medicare information is in the hands of a criminal, not only can they charge items and services to Medicare in your name, but you are prone to further scams, such as identity theft.

Can you give an example of diabetes supplies and some of the items that they’re offering?

Typically, free diabetic supplies, such as glucose meters, diabetic test strips, or lancets. And the caller may also offer other medical supplies such as heating pads, foot orthotics, or joint braces, all in exchange for your Medicare number or banking information. Although the caller may claim these items are “free,” these are not free. They’re still billed to the Medicare program and still cost taxpayers money. We also have reports of people receiving excessive diabetic supplies and other medical supplies that they don’t want or need. Just know you are under no obligation to accept these items that you didn’t order. So instead, you should refuse the delivery and return it to sender.

What should people do if they think they’ve been scammed and have received a suspicious call?

You should report it to the OIG Hotline. That number is 1-800-HHS-TIPS. You can also report it online at our website OIG.HHS.gov. And, click on the big red button that says “Report Fraud.” As part of the report, it’s important to provide as much detail as you can about the call, such as the company’s telephone number and address, the company name, and a summary of the conversation you had. The more information you provide to us, the greater chance we can identify who the scammers are.

What if you get medical equipment that you haven’t ordered?

As I said, you should not accept items that you did not order. Instead, refuse the delivery and return to sender. And report this to the OIG Hotline, including the items that you received and the sender’s name.

Are you concerned about medical identity theft as a result of these unsolicited calls?

Absolutely. I want to emphasize how important it is to protect your personal information. You should not provide callers with your Medicare number, bank account information, or credit card numbers. I’d also like you to alert your friends and family about this scheme as well. Remind them not to provide strangers with their Medicare numbers or personal information. This Medicare number is basically the keys to the Medicare program, and they cannot commit fraud without it.

Is there anything you want to add that you think is important?

It is very important that you check your Medicare Summary Notices for items you didn’t order and didn’t receive. So be on the lookout for diabetic supplies that were billed multiple times. And report any irregular activity to your health care provider or call us at 1-800-HHS-TIPS.

 

CMS is developing a national action plan that includes raising public awareness of misuse of antipsychotic drugs, regulatory oversight, technical assistance, and research. The Initiative will be launched with a video streaming event at 1 p.m. EDT, March 29.
http://surveyortraining.cms.hhs.gov/pubs/VideoInformation.aspx?cid=1098 Several hundred thousand nursing home residents with Alzheimer’s Disease or other dementia are given one or more antipsychotic drugs. The HHS Office of Inspector General reported last year that the overwhelming majority of Medicare claims for antipsychotic drug were inappropriate.

In addition, hundreds of thousands of nursing home residents are inappropriately given antipsychotic drugs each day, despite the Food and Drug Administration’s ‘Black Box’ warnings that these drugs can kill
residents who have dementia. Too many nursing homes use antipsychotic drugs as a way to control residents when they don’t have enough well-trained staff who know their residents well and can give them the time and attention they need. The word needs to get out that chemical restraints are as dangerous for residents as physical restraints.

“Nursing home staff who take the time to understand what residents are communicating with their behavior can provide care to their residents without using chemical restraints,” said Claire Curry, Legal Director, Civil Advocacy Program, Legal Aid Justice Center, Charlottesville, Virginia. “We have seen good care like this in some facilities and know that all facilities can do the same.”

Federal law, to a large extent, already prohibits the drugging of residents,” said Toby S. Edelman, Senior Policy Attorney, Center for Medicare Advocacy, Washington, DC, ”but the law is often too timidly enforced. CMS needs to dramatically step up strong enforcement of the law to ensure that all residents get the care and services they need, accor. CMS needs to ensure that no resident receives antipsychotic drugs except in full compliance with the law.”

In August 2010, the California Advocates for Nursing Home Reform (CANHR) launched a campaign to end nursing home misuse of psychoactive drugs in response to the longstanding, widespread misuse of these drugs to chemically restrain residents. The campaign features a special website, educational presentations, consumer advice, administrative and legislative advocacy, stop-drugging blog and much more.  For more information about CANHR’s Campaign or the CMS initiative, please contact Michael Connors or Tony Chicotel,(415) 974-5171, or visit CANHR’s website www.canhr.org/stop-drugging.

This blog article is taken from CANHR’s 3.28.12 press release.

Some of the statewide changes include setting up a health care “Exchange” to provide low-cost health insurance to millions more people by 2014. Policymakers are currently choosing the “essential” benefits to be covered in these plans. Another change is setting up Accountable Care Organizations (ACOs) to help doctors, hospitals, and other health care providers better coordinate care for Medicare patients across various health care settings. The idea is to reduce costs and increase wellness. ACOs that lower their growth in costs while meeting performance standards on quality of care and putting patients first will be rewarded through Medicare’s Shared Savings Program.

The state is also preparing to shift 1.2 million beneficiaries with Medi-Cal fee-for-service coverage into Medi-Cal managed care. This process has met some significant challenges in ensuring/guaranteeing that beneficiaries experience a seamless transition in their access to providers, treatment and medication, and hence may be delayed or slowed.

Some other health care reform induced changes in California that are highlighted in a recent report by Health Access (PDF) include:

• About 8,600 Californians with pre-existing medical conditions have gained access to affordable health insurance. Patients who have illnesses such as cancer or multiple sclerosis – who face high costs or denials on the open market – can buy insurance through the program.
• More than 350,000 young adults have been able to stay on their parents’ health insurance plans until they are 26.
• More than 370,000 low-income people have been covered by an expansion of Medi-Cal, the health insurer for low-income Californians, that is part of the state’s “bridge to reform” waiver to alter the state-federal program.

And, in addition, Medicare beneficiaries across the state and the country are experiencing numerous specific benefits from health reform, including:

• Many new and continued Medicare preventive benefits, mostly at no cost. Some of these include: an annual wellness visit, cancer screenings, smoking cessation counseling, and obesity screening and counseling.
• Lower out-of-pocket Part D prescription drug costs for people with large medication expenses. Beneficiaries who reach the coverage gap (also known as the donut hole) now only pay 50% of their brand name drug costs and 86% of their generic costs versus 100%. This amount will decrease gradually until 2020 when beneficiaries will just pay 25% of their drug costs. The gradual closing of the coverage gap has resulted in over $171 million of savings to beneficiaries, according Health Access’ recent report (PDF).
• An end to wasteful overpayments to Medicare Advantage (MA) plans, saving both taxpayers and the Medicare program millions of dollars. By 2014, MA plans will be required to invest at least 85% of all the funds they collect in premiums and copayments back into quality health care services for beneficiaries versus high administrative costs and profits.

Currently, the health care reform law is only partially implemented. If and when it is allowed to be fully implemented, virtually all Americans will have access to affordable health care coverage. Also, our health care system will run more efficiently and effectively, ensuring quality of care for all residents and reversing the trend of skyrocketing health care costs. Health care reform benefits all, beneficiaries, families, young adults, children and our communities. Let’s keep it going!