Pennsylvania groups sue over automatic Medicare enrollment

Meanwhile, a federal judge dismissed a New York lawsuit that sought to prevent dual-eligibles from falling through the cracks.

By Amy Lynn Sorrel — Posted Jan. 16, 2006

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As the New Year's deadline neared for people eligible for both Medicare and Medicaid to transition to Medicare's new prescription drug program, Pennsylvania advocacy groups chimed in with a lawsuit in December 2005 seeking to block automatic Medicare enrollment. But the lawsuit's claims have physicians and state Medicare experts a bit puzzled.

The suit alleges that automatic enrollment in prescription drug coverage would restrict Pennsylvania Medicare patients' access to the physicians and services they have chosen under Medicare Part A and Part B.

But doctors and Medicare policy specialists say those benefits will not be affected. Physicians say the Centers for Medicare & Medicaid Services' transition plan is not perfect, but they say it still gives patients the options they need for access to their doctors and prescription benefits.

Pennsylvania allows its Medicare-Medicaid patients to choose between managed care or a fee-for-service plan in which they choose doctors and hospitals rather than be limited to a network. According to the complaint, Medicaid managed care is mandatory for over half of the state's Medicaid recipients, but patients eligible for both programs could still use the fee-for-service option available under their original Medicare coverage.

But the Pennsylvania Health Law Project and Community Legal Services of Philadelphia fear that instead of putting Medicare-Medicaid patients who haven't selected new drug coverage into a stand-alone drug plan, the government would assign these beneficiaries to a Medicare managed care plan that includes a prescription benefit. This would undo choices patients have made under Pennsylvania's fee-for-service plan, the groups charge in their lawsuit, filed against CMS and the Health and Human Services Dept. on behalf of several individual dual-eligibles and several groups that represent beneficiaries.

About 110,000 Pennsylvania citizens are eligible for both Medicare and Medicaid.

Mixed opinions on program's impact

The lawsuit in Pennsylvania accuses the government of not informing patients of their Medicare rights with the switch.

"The only thing CMS did was send a letter that looked like any other Medicare solicitation," said Alissa Halperin, lead counsel for the Pennsylvania Health Law Project. Only this time, if patients ignored it, they would get reassigned.

Halperin said patients who did not notice the letter could see harsh consequences. She said automatically enrolling patients impacts access to care in all parts of Medicare, and will annul selections patients have made for hospital care under Medicare Part A, and doctors and other services under Medicare Part B.

"There are dual-eligibles in Pennsylvania who are in a managed care plan just by name but do not have a primary care physician [in the plan] because their original fee-for-service is primary," Halperin explained. It would appear to Medicare that these patients have not chosen a plan, and because Medicare is prohibited from interrupting coverage, they will get reassigned, she said.

"Pennsylvania patients have gone to anyone they wanted to and weren't restricted," Halperin said. "Now they will be restricted."

Not so, says Lisa Page, a Medicare project specialist with the Pennsylvania Medical Society. "Parts A and B will not be affected at all," she said.

Richard Stefanacci, DO, at the Health Policy Institute at the University of Sciences in Philadelphia, also said automatic enrollment should not affect other parts of Medicare coverage and that he was confused by the lawsuit's claims.

He and Page explained that CMS is automatically enrolling patients into an assigned managed care plan for drug coverage only, and not other Medicare coverage.

Page also pointed out that if a patient doesn't choose a plan and the randomly selected plan doesn't cover a drug, there is a special enrollment period offered every month so the patient can change to a plan that meets his or her needs. Pennsylvania patients have more than 50 plans from which to choose.

In New York, the Medicare Rights Center and other groups also sued CMS in November 2005. They accused the agency of not establishing a process guaranteeing that all dual eligibles would be enrolled by the Jan. 1 deadline.

But a federal judge ruled in New York Statewide Senior Action Council et al. v. Leavitt that the groups must first appeal to CMS and exhaust all remedies before court protection is allowed.

The lawsuit alleged that the CMS system is inadequate and causes dual-eligibles to fall through the cracks because of ineffective notice to patients, as well as computer and data errors between federal systems and Medicaid programs. That would result in an interruption of coverage, the complaint states.

But because there were no specific claims in the case, and the groups filed based on "unidentified dual-eligibles who may or may not experience lapses in coverage," the court ruled that it did not have jurisdiction to override CMS decisions.

No further court actions have taken place in the Pennsylvania lawsuit as of press time.

Trying to help the transition

Physicians, lawyers and Medicare experts do agree on one thing: The transition plan is not perfect.

"Unfortunately, the CMS has left doctors out of the loop" by going directly to patients rather than providing physicians with the channels of information, Dr. Stefanacci said.

He said the auto enrollment should work. But Dr. Stefanacci has been telling his patients and other doctors to work as a team to make the appropriate decisions and not to leave the choice up to random selection.

PMS' Page, referring to the letter CMS sent out the first week of November 2005, added that patients have the knowledge they need. The letter listed the plan that it automatically would assign patients to so that they had time to investigate the plan and opt out if it didn't suit their needs, she said.

"I don't know how else [CMS] could have made a smoother transition," Page said.

To further help physicians and patients, Page said, the Pennsylvania Medical Society has been holding educational meetings for doctors. She called the turnout encouraging.

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Case at a glance

Erb et al; Action Alliance of Senior Citizens of Greater Pennsylvania; Center for Advocacy for the Rights and Interest of the Elderly v. Mark McClellan, administrator, Centers for Medicare & Medicaid Services; Michael Leavitt, secretary, Dept. of Health and Human Services

Venue: U.S. District Court, Eastern District of Pennsylvania
At issue: Whether the Centers for Medicare & Medicaid Services has the authority to automatically enroll beneficiaries eligible for both Medicare and Medicaid who haven't selected a Medicare drug plan on their own into a Medicare managed care plan that includes this coverage.
Impact: Patient advocates say automatically switching Pennsylvania beneficiaries to Medicare managed care will undo choices they have made regarding doctors and hospitals, hurting their access to care. But doctors and Medicare experts say that will not happen and expect the transition to Medicare drug coverage for these dual-eligibles to be smooth.

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