The outgoing Congress in late 2006 created a new Medicare Advantage (MA) related enrollment period for Medicare beneficiaries. This new enrollment period, called the Limited Open Enrollment Period (L-OEP), allows individuals in the original, fee-for-service Medicare program one opportunity during the year in 2007 and 2008 to enroll in a Medicare Advantage-only plan (meaning an MA plan without Part D coverage). Yet, according to the Center for Medicare and Medicaid Services’ (CMS) interpretation of the authorizing legislation, Medicare enrollees with a stand-alone PDP will lose their Part D coverage altogether if they enroll in an MA-only HMO, PPO or Regional PPO. (Note: They will not lose their Part D coverage if they enroll in a Private-Fee-For-Service (PFFS) plan without drug coverage.) This interpretation creates a dangerous situation for beneficiaries, who by enrolling in a MA only plan (other than a PFFS plan) could be automatically disenrolled from their PDP, be without drug coverage for the remainder of the year, and be charged penalties when re-enrolling in a Part D plan in the following year. Since the L-OEP is only available when no other enrollment periods are in effect, the L-OEP will begin on April 1st for most people (after the Medicare Advantage Open Enrollment Period (OEP) expires.
Advocates’ letter to CMS
In recognizing this dangerous prospect for Medicare beneficiaries, several advocacy groups signed on to California Health Advocates’ letter (view PDF) to CMS arguing that CMS is misinterpreting Medicare law with respect to elections permitted under this new “Limited Open Enrollment Period” (L-OEP). Specifically, they argued that Medicare law prohibits beneficiaries from either enrolling in – or disenrolling from – any prescription drug plan under Part D during the L-OEP. This interpretation is consistent with other Medicare enrollment periods (including the Medicare Advantage Open Enrollment Period (MA-OEP)).
In a responding letter (view PDF) CMS rejected these arguments and without addressing the cited conflict with Medicare law they stated that “we have retained the existing process by which an individual enrolled in a PDP who elects enrollment in an MA coordinated care plan [HMO, PPO] will be automatically disenrolled from the PDP.” As a safeguard, CMS notes that plans cannot enroll individuals who do not confirm that they understand the consequences of their choice. They also said they will establish a special enrollment period (SEP), available on a case-by-case basis, allowing beneficiaries to return to their PDP if, despite the required confirmation process, they claim that they were unaware they would lose their prescription drug coverage as a result of their L-OEP election.
Impact on beneficiaries…
In California in 2007, this interpretation will impact individuals in Original Medicare with a stand alone prescription drug plan (PDP) who join local HMOs without Part D coverage. According to information on the Medicare website, both Blue Cross Regional PPOs available statewide and all of the handful of local PPOs available in certain California counties offer Part D coverage, which means that the L-OEP will not affect California’s PPOs this year. MA-only HMO plans, however, are offered in over 1/3 of the counties in California, including the most populous; see Medicare’s Landscape of Plan Options in California.
CMS has not yet given any specifics on how this new SEP they plan to establish would work, and whether CMS would retroactively enroll beneficiaries into their previous PDP. Because of the danger of beneficiaries losing Part D coverage if they make certain elections during the L-OEP, advocates should be on the look-out for the marketing of MA-only HMOs in the counties in which they are offered. Based upon California Health Advocates’ experience with the marketing of other MA products, it is safe to assume that many agents selling these plans may not be aware of the potential danger to enrollees.
Please let California Health Advocates know if/when you encounter beneficiaries who lose their PDP during the L-OEP by contacting Staff Attorney David Lipschutz. For more information on the L-OEP and other enrollment periods, view the Center for Medicare Advocacy’s CMA Alert on Medicare Enrollment Periods.