First, Medicare beneficiaries can subsequently qualify for Medicaid. This group represents approximately one-third  of the new dual-eligible beneficiaries enrolled by CMS in PDPs. It also provides data to other CMS systems, SSA,  state Medicaid agencies, PDPs, and pharmacies. This system is used to enroll  beneficiaries in PDPs. The key  information systems (see fig. 2. 3. Enrollment Processes and Coverage Policy Generate Challenges for Dual-Eligible Beneficiaries, Pharmacies, and the Medicare Program

CMS’s enrollment processes and implementation of its Part D coverage  policy generate challenges for some dual-eligible beneficiaries,  pharmacies, and the Medicare program. Because the interval between  notification of Medicaid eligibility and completion of the Part D enrollment  process can extend at least 5 weeks, some dual-eligible beneficiaries— those previously on Medicare who subsequently become eligible for  Medicaid—may be unable to smoothly access their Part D benefits during  this interval. However, until March  2007, CMS did not inform these beneficiaries of their right to seek  reimbursement for costs incurred during the retroactive period that can  last several months. GAO found that Medicare paid PDPs millions of  dollars in 2006 for coverage during periods for which dual-eligible  beneficiaries may not have sought reimbursement for their drug costs. CMS Has Taken Actions to Address Challenges Faced by New Dual-Eligible Beneficiaries and Pharmacies

Given the experience of early 2006, CMS has taken several actions to  improve the transition of dual-eligible beneficiaries to Part D. First, the  agency has taken steps to facilitate the change in drug coverage for  Medicaid beneficiaries whose date of Medicare eligibility can be  predicted—about one-third of new dual-eligible beneficiaries enrolled by  CMS. In August 2006, CMS implemented a new prospective enrollment  process that state Medicaid agencies may use to eliminate breaks in  prescription drug coverage for these beneficiaries. While CMS does not monitor the amount of time it takes  for PDPs to submit billing information, the agency has begun monitoring  Medicare’s eligibility database to identify PDPs that have a large number  of enrollees for whom billing information is missing. CMS Is Attempting to Address Information Systems Issues, but without Adequate Testing, Problems May Continue

CMS is now making changes to improve the efficiency of key information  systems involved in the enrollment process. However, state  Medicaid officials and others assert that dual-eligible beneficiaries  assigned to PDPs by CMS are often enrolled in PDPs that do not meet their  drug needs. When Enrolling Dual- Eligible Beneficiaries, CMS Considers PDP Premiums and Geographic Location

CMS assists in the enrollment of dual-eligible beneficiaries who have not  enrolled in a Part D plan on their own by randomly assigning them in  approximately equal numbers among eligible PDP sponsors in each region. Dual-eligible beneficiaries may change PDPs at any time during the  enrollment year. Using Additional Criteria, Maine Switched PDP Assignments to Accommodate Drugs Used by Dual-Eligible Beneficiaries

The SPAP in Maine is one example of an organization that took steps to  reassign noninstitutionalized, dual-eligible beneficiaries, with CMS  approval, by aligning their drug needs with PDP formularies, ultimately  reassigning nearly half of its dual-eligible population to PDPs other than  those assigned by CMS. Thus, after CMS had randomly assigned dual-eligible  beneficiaries to PDPs, Maine reassigned certain noninstitutionalized, dual- eligible beneficiaries to different PDPs prior to January 1, 2006. CMS monitoring  of retroactive payments to PDPs and subsequent PDP reimbursements to  beneficiaries is also lacking. However,  continued use of these methods is contingent on access to beneficiary  drug utilization and formulary information from PDPs. CMS’s main concern regarding the draft report for comment centered on  our characterization of the interval between the effective date of Part D  eligibility and the completed enrollment process as a “disconnect.” Also,  CMS officials noted that “it is not new or unusual for individuals to pay out  of pocket for their prescription drug or other healthcare services, and then  subsequently be reimbursed.” The agency explained that its policy of tying  the effective Medicare Part D enrollment date to the first day of Medicaid  eligibility is intended to ensure that dual-eligible individuals receive Part D  benefits for the period that they were determined by their state to be  eligible for this coverage. 1.
Why GAO Did This Study

Since January 1, 2006, all dual-eligible beneficiaries--individuals with both Medicare and Medicaid coverage--must receive their drug benefit through Medicare's new Part D prescription drug plans (PDP) rather than from state Medicaid programs. GAO analyzed (1) current challenges in identifying and enrolling new dual-eligible beneficiaries in PDPs, (2) the Centers for Medicare & Medicaid Services' (CMS) efforts to address challenges, and (3) federal and state approaches to assigning dual-eligible beneficiaries to PDPs. GAO reviewed federal law, CMS regulations and guidance and interviewed CMS and PDP officials, among others. GAO also made site visits to six states to learn about the enrollment of dual-eligible beneficiaries from the state perspective.

What GAO Found

CMS's enrollment procedures and implementation of its Part D coverage policy generate challenges for some dual-eligible beneficiaries, pharmacies, and the Medicare program. A majority of new dual-eligible beneficiaries--generally those on Medicare who have not yet signed up for a PDP and who become eligible for Medicaid--may be unable to smoothly access their drug benefit for at least 5 weeks given the time it takes to enroll them in PDPs and communicate information to beneficiaries and pharmacies. Pharmacies also may be affected adversely when key information about a beneficiary's dual eligibility is not yet processed and available. When dispensing drugs during this interval, pharmacies may have difficulty submitting claims to PDPs and accurately charging copayments. In addition, Medicare pays PDPs to provide these beneficiaries with several months of retroactive coverage but, until March 2007, CMS did not inform beneficiaries of their right to be reimbursed for drug costs incurred during these periods. CMS does not monitor its payments to PDPs for retroactive coverage or the amounts PDPs have reimbursed dual-eligible beneficiaries. Medicare paid PDPs millions of dollars in 2006 for coverage during periods for which dual-eligible beneficiaries may not have sought reimbursement for their drug costs. CMS has taken steps to address challenges associated with enrolling dual-eligible beneficiaries in PDPs. CMS has implemented a policy to prevent a gap in prescription drug coverage for those new dual-eligible beneficiaries whose Part D eligibility is predictable--Medicaid beneficiaries who subsequently qualify for Medicare. We estimate this group represents about one-third of new dual-eligible beneficiaries. In August 2006, CMS began operating a prospective enrollment process that should allow the agency and its Part D partners time to complete the enrollment processes and notify these beneficiaries before their effective enrollment date. Also, CMS is making changes to improve the efficiency of key information systems involved in the enrollment process. While the agency is performing some information systems testing, it is not planning to perform testing of the interactions of key information systems collectively, which is crucial to mitigating the inherent risks of system changes. Under federal law, CMS is required to assign dual-eligible beneficiaries to PDPs based on PDP premiums and geographic area. State Medicaid agency officials and others assert that this assignment method often places dual-eligible beneficiaries in PDPs that do not meet their drug needs. With CMS approval, Maine officials considered beneficiary-specific data to reassign nearly half of their dual-eligible beneficiaries to PDPs that better met their drug needs in late 2005. After the reassignment, the number of these dual-eligible beneficiaries whose PDP covered nearly all of their prescription drugs increased significantly. States choosing to make such reassignments in the future would need ready access to key information from PDPs. CMS contends that reassignments are not needed because beneficiaries may switch to drugs of equivalent therapeutic value or change plans at any time.