Over the last few years, the sector has seen enormous growth in the enrollment in Medicare Advantage and Managed Medicaid programs. This has produced tremendous challenges for operators. This dynamic has also put pressure on communications with residents and families about managed care arrangements and relationships. This article will explore how to leverage the dissemination of objective information to allow for decision-makers to make informed decisions while also avoiding legal risk. – Mark Reagan, managing shareholder of Hooper, Lundy and Bookman

CMS Demands Facility Disclosure & Documentation

The issue of conversations with beneficiaries over managed care membership first arose in 2015 when CMS issued a memorandum alleging that operators were changing the coverage of their residents from Medicare Advantage (MA) to fee-for-service. This coincided with the implementation of “demonstrations” where dual-eligible beneficiaries were mandatorily enrolled in a managed care plan to administer their Medicaid benefits and simultaneously “passively” enrolled in a Medicare-Medicaid Plan (“MMP”). While this “passive” enrollment allowed these beneficiaries to “opt out” and return to Medicare fee-for-service, these individuals were hopelessly confused about the state of their coverage and the implications of this change.

Not surprisingly, many of these beneficiaries exercised their right to “opt-out” and CMS believed that they did not do so with full or complete information. Ironically, one could easily argue that these beneficiaries had not received full or complete information about their “passive enrollment” in the first place.

In any event, CMS issued a fairly threatening memo to operators in May 2015 accusing them of processing “opt-outs” from MMPs or dropping MA plan coverage without the knowledge of beneficiaries. As a result, CMS affirmed that any coverage decisions be initiated by the beneficiary or their representative. However, CMS went significantly further by demanding that operators provide an oral and written explanation of the impact of leaving an MMP or MA plan, including:

(1) That the beneficiary would no longer be a member of the MMP/MA plan and its prescription drug plan;

(2) That covered medical services would be billed to Original Medicare and what this would mean as to deductible and co-pays as well as the loss/absence of a MMP’s or MA plan’s “supplemental benefits;”

(3) The name of the Part D drug plan that would cover medications and the deductible/co-pays/co-insurance that would apply to the beneficiary’s current drug therapy;

(4) Specific information as to the beneficiary’s right to change/leave MA plan and related drug coverage while at the facility, upon discharge or by virtue of their eligibility;

(5) An explanation that the enrollment in the Part D drug plan would be effective on the first day of the month; and

(6) An explanation as to particular circumstances where a beneficiary would not be able to re-enroll into a MA plan and its prescription drug plan.

CMS went on to insist that operators develop policies that, at a minimum, included:

(1) The circumstances under which the operator can assist a beneficiary with a change in coverage;

(2) The need to obtain a signed document from the beneficiary or representative acknowledging the specific information regarding the impact of a change in coverage was provided orally and in writing and that they understand the information; and

(3) The need to obtain an attestation from the facility staff member that assisted with the change, attesting that the beneficiary or representative requested the change and received and understood the minimum required information.

Despite the absence of a direct legal authority for mandating the above, CMS declared that CMS will not consider the enrollment to be “legally valid” if such documentation cannot be provided. It likewise threatened enforcement action against operators under 42 CFR Part 483, stating that “[u]nder no circumstance, should a LTC facility require, request, coach or steer any resident to select or change a plan for any reason.”

Six years later in October 2021, CMS issued yet another memorandum on this same topic. Although CMS expanded its demands for beneficiary coverage changes from PACE programs, it backed off its threat as to the de facto legal invalidity of the coverage changes in the absence of facility documentation. CMS stated that a lack of documentation “may suggest” that the enrollment was not initiated by the beneficiary/resident and therefore not legally valid. In other words, CMS now acknowledges that facility non-compliance with its unsupported demands will not, in and of itself, invalidate changes in coverage.

What Should Operators Do?

Although the 2021 CMS memorandum (as well as the 2015 version) are questionable as to CMS legal authority, operators should strongly consider developing and implementing a standardized process for staff to follow regarding coverage changes, including the expectation that staff (and, if possible, the beneficiary or representative) will document the intention of the beneficiary/representative to change coverage type or change plans. This documentation could be entered in the medical record or through using a separate form to be placed in the record. It is also advisable for facilities to develop and implement facility policy as to such coverage changes and related documentation.

Beyond the process elements, there is certainly much that operators can generally say about the differences for beneficiaries having their Medicare benefits administered by MMP or MA plans versus Original Medicare. Obviously, the primary differences are the “in network” requirements and the use of the authorization process for plan coverage. Other important distinctions are the “cost sharing” requirements (in the form of deductibles, co-insurance and co-pays) required by plans and Original Medicare and Medicaid, as applicable. Likewise, the presence (or absence) of supplemental benefits provided by MMP or MA plans should be considered.

As to those general differences, operators would be well served to develop and use succinct written materials that “compare and contrast” the different forms of Medicare coverage. These could be in the form of an explanation of the differences and/or a simple chart reflecting the same.

Along with these materials, facility staff should be prepared to discuss whether the facility is “in network” with the managed care plans available to or proposed to be selected by the beneficiary. Depending on the nature of the coverage under discussion, this could apply to both plans administering Medicare and Medicaid benefits.

If known, facility staff could also speak to whether the beneficiary’s attending physician and other physician specialists participate in the managed care network of the plans under discussion. Facility staff should be prepared to discuss the implications of the facility and applicable physicians not being “in network.” Also, if the plans under discussion have materially different processes as to the authorization of services and care/case management, it may be worth having staff speak to those issues.

The key distinction here is the provision of objective information rather than opinions associated with the quality and performance of plans generally or specifically. However, it is important for operators to realize that coverage decisions do not only impact the beneficiary when they are a resident of the facility. If/when the beneficiary returns home, those decisions will remain important for access to care as well as cost.

The Bottom Line

In the Medicaid context, most states mandate Managed Medicaid. In that context, coverage changes are likely only going to be from one plan to another. As a result, the presentation of data of resident enrollment in particular plans at the facility is also fair game. However, that type of data should be described as demographic in nature and not indicative of the plan quality/performance or the operator’s preference for one plan over another.

In the MMP context, an increasing number of states are seeking to “marry” the management of Medicaid and Medicare coverage through either “actively” or “passively” enrolling dual-eligible beneficiaries into MMP plans. This is a different conversation than in the Medicaid context as the dual-eligible beneficiary has the right to remain in Original Medicare and plan “supplemental benefits” may be far more limited in nature.

Except as to the enrollment processes unique to MMP plans, the decision to enroll in (or leave) a MA plan is entirely voluntary and requires affirmative action by the beneficiary or representative. Although similar to the MMP situation, this may reflect a different discussion around “cost sharing” and “supplemental benefits.”

In any event, the unifying principle for operators is the same. The provision of objective information by trained staff through an established process based upon facility policy is the key. In a world where consumers face so much uncertainty and have so much confusion, operators can do a lot to support their residents and families to maximize their access to care within and outside the facility.

With managed care not going away and increased scrutiny over beneficiary changes in coverage, operators should make it a priority to standardize communication and the related documentation.

Comments or questions? Contact Patrick Connole at pconnole@parkplacelive.com.