Medicare Part D for patients with special needs

August 7, 2006

Nursing home residents are one group requiring extra attention from Medicare Part D plans and providers. The average nursing home resident has seven distinct diagnoses and uses eight or more different medications. Among the 2.2 million persons residing in nursing homes, 70% are cognitively impaired and 70% are dual-eligibles.

CMS has early on identified long-term care (LTC) residents as a particularly vulnerable population with special healthcare needs often combined with impairments that make communication a challenge. To address this issue, CMS has worked with the nursing home industry and related advocacy associations to get information to their members and caregivers. Recommendations that directly impact nursing home patient care and participation in Part D include:

Medicare beneficiaries who live in certain types of institutions, have chronic or disabling conditions, and have both Medicare and Medicaid coverage are allowed to enroll in a PDP or Medicare Advantage (MA) plan with tailored benefits. These "special needs plans" (SNPs) were created by the Medicare Modernization Act to serve beneficiaries with serious, long-term illnesses who may have multiple medical conditions and multiple treatment modalities. The intent of SNPs is to provide better coordination of care for beneficiaries through access to specialists in the disease and clinical case management of the populations that SNPs enroll. SNPs are expected to have formularies that include the drugs most needed by their members.

For 2006, CMS approved 275 SNPs operated by 164 different plan sponsors located in 42 states and Puerto Rico. This number more than doubled the 125 SNPs approved for 2005 and represents a huge increase over the 11 plans authorized in 2004. Of the 275 plans operating in 2006, 226 targeted persons dually eligible for Medicare and Medicaid, 36 were for residents of LTC facilities, and 13 for those with chronic conditions. Some MA plans that covered dual-eligibles became SNPs. Members may opt out of an SNP at any time. Persons with special needs can locate an SNP by comparing Medicare plans at http://www.medicare.gov/.

For residents who are not members of an SNP, it is advisable to find a Medicare plan that includes the designated pharmacy in its network to avoid charges that they are using an out-of-network pharmacy. Nursing home residents can switch plans at any time during the year. However, marketing guidelines limit the degree of assistance offered by facility staff that could be interpreted as interfering with residents' rights to choose their plan.