Why Doesn’t CMS Understand the LTC Difference?

The Centers for Medicare & Medicaid Services (CMS) has the difficult, if not impossible, task of implementing the laws governing Medicare. CMS’s philosophy in developing the regulations has been to look at the overall well-being of the program. Unfortunately, in doing so, individual patients who exist at the extremes often suffer. Medicare Part D and the effect of this program on nursing home residents is a clear example of this problem.

As is often the case, the needs of long-term care (LTC) residents were not considered in the drafting of Medicare Part D legislation. States had viewed the ability to move their dually eligible individuals from Medicaid coverage of prescription drugs to Medicare as a way to relieve them of this heavy financial burden. Of course, to the surprise of most states, this was not entirely the case as they were stuck with the “clawback provision,” a monthly bill from CMS based on a percentage of the cost of caring for the dually eligible. In addition, states are finding that the benefit coverage available under Medicare Part D plans is less than had been offered under their Medicaid program in most situations. On top of that, states are fearful that prescription plans will restrict access to important medications, such as the antidementia agents, potentially resulting in premature nursing home placement—which will end up costing the states millions of dollars.

CMS felt that it was important to move all of the dually eligible from Medicaid to the Medicare Part D program to assure that prescription plans would have enough membership from the start to cover their high fixed operating expenses. It made it much easier to get plans to participate knowing that there were 6.5 million members guaranteed to enroll.

THE LTC DIFFERENCE

Of course, LTC residents are very different from community-based seniors, not only because of their unique demographics, but also because of the process that governs the distribution of medications within LTC facilities. The 1.6 million dually eligible nursing home residents have the highest acuity of any subset of Medicare beneficiaries, with 60-80% suffering from mental impairment.¹ The intensity of services required for LTC residents is significantly greater than that of community seniors, with twice the number of prescriptions being utilized and four times the total overall healthcare spending being allocated.²

Because of the significant needs of the LTC resident, state and federal regulations have been developed to ensure that these needs are appropriately covered. In the area of prescription drug coverage, this is reflected in the Federal Regulations requirements for States and Long Term Care Facilities, section 483.60 Pharmacy Services.³ This section states that the facility must provide routine and emergency drugs and biologicals to its residents. The interpretive guideline states that a drug must be provided in a timely manner. If failure to provide a prescribed drug in a timely manner causes the resident discomfort or endangers his/her health and safety, then this requirement is not met. Unfortunately, Medicare Part D with its prescription plans provides incentives to restrict utilization of medications, placing LTC residents and facilities in a dangerous situation.

BARRIERS TO CMS RECOGNIZINGTHE LTC DIFFERENCE

Having had the opportunity to spend a year at CMS as a Health Policy Scholar, I witnessed first-hand the deficiencies that have led to CMS’s inability to recognize the LTC difference. To start, CMS has written almost every Medicare Part D document with the objective that the prescription plan was the most vital component of this program. Prescription plans must be encouraged to participate in this new program so that CMS would not have to participate as its own plan under the fallback plan provision. This provision would call for CMS providing the full financial backing for a prescription plan if the mandated minimum of two prescription plans was not available in any predefined market. CMS was adamant that there would be no fallback plans. CMS also maintained that in order for this program to deliver the best results, a very competitive market was required. CMS writings were therefore drafted to encourage the maximum number of plans to participate.

Besides the underlining philosophy—which may appear to place prescription plan health above that of the Medicare beneficiaries—CMS has other barriers that limit its ability to recognize the LTC difference. These include having very limited staff with first-hand and continued LTC expertise. Compounding this limitation is the fact that operationally within CMS, individuals are afforded tremendous independent power when drafting CMS writings. These limitations have resulted in CMS moving in a direction that is often contrary to the unique needs of LTC residents.

DEMONSTRATION OF PROBLEM

Two clear examples of this conflict can be found within the areas of marketing and special resident protections. On May 11, CMS issued a letter to state survey agency directors that warned against nursing homes enforcing the use of a single pharmacy provider.⁴ Instead, the letter mandates that facilities utilize multiple pharmacy providers to assure that residents can remain in plans, despite the fact that this actually may not be in the best interest of the resident. The letter continues to state that nursing homes may, and are encouraged to, provide information and educate residents on all available Part D plans (which in Pennsylvania are 202 plans). It is hard to believe that these measures are in the best interest of LTC residents.

The second example was a writing by CMS in its question and answer section. The writing called into question longer transition periods for LTC residents.⁵ CMS also questioned the allowance of waivers of prior authorization or other utilization management edits for LTC facility residents that made it possible for nursing homes to meet their regulatory requirement of providing all ordered medications to residents in a timely manner. Again, it is hard to argue from either a health policy or clinical basis perspective that providing a longer transition from existing covered medications to those available through the prescription plan is a bad thing.

WHO SHOULD CARE AND WHY?

LTC residents, owners, and providers should of course care a great deal about the problems that have been created by CMS. To date, these groups have been insulated from the full impact of these conflicts, which on one hand is fortunate but on the other hand is unfortunate in that it has placed these groups in a state of complacency. This insulation has been provided by the special transition period that ended March 31. Additional insulation was afforded through LTC pharmacy providers who have been assuring that even noncovered medications are provided to nursing home residents, oftentimes without involving the nursing home with the coverage issue. As these insulators erode, the key stakeholders will begin to feel the adverse impact of Part D on LTC. Hopefully, there will be sufficient time to pressure legislators and regulators to make appropriate changes and to ensure continued access to necessary medications for LTC residents.

THE SOLUTION

One solution for resolving the problems that exist for LTC includes the continuation of the AGS-CMS Health Policy Scholar position. Dr. Paul McGann was the first AGS-CMS Health Policy Scholar, choosing to continue his good works within CMS, while I, the second and last scholar, have chosen to affect change from outside the organization. By continuing this program, experts can provide perspective and knowledge in senior care and work with CMS staff on policy-related topics.

As Medicare Part D is opened up for legislative changes, legislators should provide protections for LTC residents to ensure their access to the prescription drugs that are determined by their providers to be necessary. This can occur only if LTC providers are allowed to evaluate plan options to assist residents on an individual basis find the plans that would provide them with the greatest access to vital medications. In addition, a longer transition period from existing coverage, either during a Part A stay or prior to coverage by prescription benefit programs, should be provided to LTC residents.

More complex opportunities to ensure that LTC residents have access to their medications in a timely manner include a number of other approaches, such as (1) utilizing the previous New York LTC model (where the nursing home was capitated for medications for the non-Part A stay, just as they are everywhere for the Part A stay); (2) development of a specialized LTC-PD; or (3) moving the dually eligible back under state Medicaid programs. All of these options would better align the clinical, regulatory, and new Part D operations together. In the end, LTC residents will continue to be at risk for adverse outcomes related to medication management unless those with expertise in the care and management of this unique population are willing and able to push for measures that protect them.