Copyright © Center for Medicare Advocacy, Inc.

NATIONAL MEDICARE ADVOCATES ALLIANCE

ISSUES BRIEF #10 JUNE, 2010

__________________________________________________________________

THE QMB BENEFIT: HOW TO GET IT, HOW TO USE IT

− THE PROBLEM −

A client comes to your office with doctor bills she cannot pay. She has been getting the bills for several months and now has started getting nasty letters from collection agencies. She thinks she shouldn’t have to pay the bills but is a little confused. She shows you a notice that she received from the State a few months ago, before the doctor visit that resulted in the bills. The notice she presents says that she had been approved for something called the Qualified Medicare Beneficiary program. She tells you that some time ago, she went to the State to get help paying for Medicare but she doesn’t think the notice that she has with her is about that because the Medicare premium is still coming out of her small Social Security check of about $700 per month. She asks if you can help her.

__________________________________________

The short answer is that you can help her by 1) notifying the provider that she is entitled to the Qualified Medicare Beneficiary (QMB) benefit – that is, relief from liability for all Medicare cost-sharing – and that the provider may bill the State for her cost-sharing but is prohibited by law from billing her and 2) contacting the State to find out why she has not been added to its buy-in rolls to pay her Medicare Part B premium and thus have the amount of the premium restored to her Social Security check. Neither of these actions, however, will easily result in solving her problem, because the provider may not respond to your legal analysis or may not know how to bill the State and the State may tell you it is Social Security’s fault that her premium has not been restored to her check. The issues raised by this client’s problem – confusion about the nature of the benefit she has been awarded, lack of knowledge by the provider of the client’s status and the provider’s responsibilities with respect to such an individual, and failure of the State and federal governments to “activate” a benefit for which the client was found eligible months ago – are systemic and nationwide. This Issue Brief discusses the processes of enrolling in Medicare Savings Programs (MSP), especially in the QMB program, and the legal protections available to QMBs concerning use of this benefit. We have included at the end of this Issue Brief a glossary of relevant terms.

Copyright © Center for Medicare Advocacy, Inc. 2

An earlier Medicare Advocates Alliance Brief on a related issue, entitled Can You Be A Qualified Medicare Beneficiary If You Don’t Have Medicare Part A?, is available at http://www.medicareadvocacy.org/Projects/AdvocatesAlliance/IssueBriefs/09_10.19.QMBsWithoutPartA.pdf . BACKGROUND The Medicare Savings Programs (MSPs) have been enacted and, in one case, reauthorized over a period of twenty-four years in order to protect low-income Medicare beneficiaries from the high costs of Medicare cost-sharing. Without help paying for Medicare cost-sharing, beneficiaries may either forgo health care for which they must pay or forgo other necessities of life such as food, clothing, or utility payments. Yet an estimated 67 percent of those eligible for QMB-only benefits, and about 87 percent of those eligible for SLMB-only benefits, are not participating in the programs.1 Barriers to program enrollment have been identified in numerous reports prepared by advocacy organizations, researchers, and government entities.2 While some barriers have been reduced or eliminated over time, many remain. This paper is not, however, primarily about barriers to enrollment. It is about barriers to activation and use of the QMB benefit. The QMB program offers the richest benefit of the four distinct MSPs required to be included in State Medicaid programs.3 The benefits of the MSPs are relief from payment of some or all of Medicare’s cost-sharing. The QMB benefit provides relief from all Medicare cost-sharing – Part A (where applicable) and Part B premiums, deductibles, co-insurance and, where applicable, Part C co-payments. State Medicaid programs are responsible for covering these otherwise applicable out-of-pocket costs to the extent that their Medicaid payment for the same service is higher than Medicare’s liability. Regardless of the level of the state payment, QMBs cannot be held financially liable for payment to providers of any deductible, coinsurance, or co-payment amounts.4 Providers that bill QMBs for either Medicare’s cost-sharing or any balance above the Medicare-approved amount are subject to excess charges sanctions under both Medicare and Medicaid.5

1 Congressional Budget Office A Detailed Description of CBO’s Cost Estimate for the Medicare Prescription Drug Benefit, July 2004, http://www.cbo.gov/ftpdocs/56xx/doc5668/07-21-Medicare.pdf. 2 Recent examples include: National Center for Benefits Outreach and Enrollment, "Express Lane Eligibility: New Strategies for Increasing Enrollment," Issue Brief (June 2009), available at http://www.centerforbenefits.org/NCBOE_ELE_Issue_Brief_FINAL.pdf (site visited June 3, 2010); Robert Wood Johnson Foundation, "State Solutions: An Initiative to Improve Enrollment in Medicare Savings Programs" (Feb. 2009), available at http://www.rwjf.org/pr/product.jsp?id=38668 (site visited June 3, 2010); MedPAC, "Report to the Congress: Medicare Payment Policy" (Mar. 2008), Ch. 5, available at <www.medpac.gov/documents/Mar08_EntireReport.pdf > (site visited June 2, 2010) (hereinafter MedPAC Report March 2008); Jack Ebeler, Paul N. Van de Water, & Cyanne Demchak (eds.), "Improving the Medicare Savings Programs," National Academy of Social Insurance (2006), available at http://www.nasi.org/usr_doc/Improving_the_Medicare_Savings_Programs.pdf (site visited June 4, 2010). 3 The four programs are: QMB, Specified Low-Income Medicare Beneficiary (SLMB), Qualified Individual (QI), and Qualified Disabled Working Individual (QDWI). QMB, SLMB, and QI recipients also receive the Medicare Part D Low-Income Subsidy without having to apply for that benefit. SLMB and QI cover payment of the monthly Medicare Part B premium. The QDWI benefit covers payment of the Medicare Part A premium for certain individuals who lost eligibility for premium-free Medicare Part A. 4 42 U.S.C. § 1396a(n)(3)(B) 5 42 U.S.C. § 1396a(n)(3)(C)

Copyright © Center for Medicare Advocacy, Inc. 3

HOW TO GET THE QMB BENEFIT The Enrollment Process for Medicare Savings Programs The entire process of enrolling in an MSP, from application (if necessary) to activation of the benefit and, where applicable, restoration of the Part B premium to the applicant’s Social Security check, is complex and involves several state and federal agencies sharing data over a period of time.

• Individuals Without Medicaid When They Become Eligible For Medicare If the individual is not already receiving Medicaid, she must apply at the agency designated by the state Medicaid agency as the place to apply for such benefits. If she already has Medicare Part A, which is a condition of eligibility for MSPs, she applies for the MSP. If she is found eligible, the State will submit an MSP enrollment request to the Centers for Medicare & Medicaid Services (CMS) during the course of a regular data-sharing, which may occur daily, monthly, or any number of times in between, depending on choices made by the State. The frequency of the data-sharing is significant. By response file, CMS lets the State know whether it can perform the requested enrollment, or if there are data errors/discrepancies that the State must resolve. If the enrollment can be processed, then CMS transmits a request to SSA to not deduct the Part B premium from the individual’s Social Security check. This data exchange could take place within a 24- or 48-hour period, but depends on how frequently the State sends and receives data from CMS. Sending and receiving are separate actions and require separate decisions by the State. Regardless of whether the individual had Part B prior to the application for MSP, once the data share is completed, she will be “accreted” (added) to the Part B buy-in rolls for her State – that is, the State will be billed for her Part B premium. If the individual does not have premium-free Part A, because she has not worked sufficient quarters in covered employment, the state agency is supposed to do one of two things, depending on the State. States that have Part A buy-in agreements6 (to allow the State to enroll individuals into Medicare Part A at any time of the year and not pay late enrollment penalties that would otherwise be due) can take the application and, if the individual also does not have Part B (which is a requirement for purchasing Part A), the state agency can simultaneously enroll the successful applicant in Parts B and A. Through the QMB benefit, these States pay for the Part A premium, which is, for 2010, either $461/month or $254, depending on how many quarters of coverage the individual has. This process is applicable only to an individual eligible for QMB, since the benefits for other MSPs do not include payment of the Part A premium.

6 It is easier to name the States without Part A buy-in agreements, as they are fewer. Those 14 states are: AL, AZ, CA, CO, IL, KS, KY, MO, NE, NJ, NM, SC, UT, VA. The Social Security POMS section on State Buy-In and Group Payer (non-Part A buy-in agreement states) Provisions for QMBs is HI 00801.140, found at http://policy.ssa.gov/poms.nsf/links/0600801140 (Site visited May 18, 2010).

Copyright © Center for Medicare Advocacy, Inc. 4

If the individual is “not known to Medicare,” that is, she has not been determined eligible for Medicare, she may have to be determined eligible at a local Social Security office before the State can accrete her into the buy-in system. At the Social Security office, she will be enrolled in Part B and “conditionally enrolled” in Part A.7 The enrollment in Part A is “conditioned” upon her being found eligible for QMB by her state Medicaid agency; there is no similar conditional enrollment for Part B.8 If the individual is in a State without a Part A buy-in agreement, the Medicaid agency should direct her to a Social Security office to conditionally enroll in Part A (and, if necessary, enroll in Part B). In these States, an individual can apply for Medicare Part A only between January 1 and March 31 each year. This three-month period is the Medicare General Enrollment period for individuals who did not enroll during their Initial Enrollment Period. SSA must enroll the individual in Part B and conditionally enroll her in Part A; the individual can then take evidence of those enrollments to the Medicaid agency to make the QMB application.9

• Individuals With Medicaid When They Become Eligible For Medicare An individual receiving Medicaid when she turns 65 or otherwise satisfying criteria for Medicare eligibility (has received Social Security Disability Insurance benefits for 24 months or is 65 or older and has been a permanent resident of the United States for five years) must be determined eligible for Medicare by SSA before the State can enroll her in an MSP and pay her Part B (and, if necessary – but only for a QMB -- Part A) premium. In the 32 States (and the District of Columbia) that have contracted with SSA to determine Medicaid eligibility while SSA is determining SSI eligibility,10 SSA is supposed to notify CMS of an SSI recipient’s Medicare eligibility and CMS is supposed to accrete the individual into the buy-in. In other States, once the State determines through CMS’s available data systems that the individual is eligible for Medicare, the State can accrete the individual into the buy-in system.

7 Advocates may want to arm their clients with EM 08071 REV, at this link www.medicareadvocacy.org\Projects\AdvocatesAlliance\EM-08071 REV.pdf, as some SSA offices are unfamiliar with the notion of enrolling individuals in Medicare outside the General Enrollment Period each year. 8 As noted above, a fuller discussion of Part A enrollment as a means of access to the QMB benefit is discussed in an earlier brief entitled Can You Be A Qualified Medicare Beneficiary If You Don’t Have Medicare Part A?, available at http://www.medicareadvocacy.org/Projects/AdvocatesAlliance/IssueBriefs/09_10.19.QMBsWithoutPartA.pdf 9 This process is described in the Social Security Program Operations Manual System (POMS) HI 00801.140. https://secure.ssa.gov/apps10/poms.nsf/lnx/0600801140!opendocument 10 The states for whom SSA determines Medicaid eligibility while determining SSI eligibility are called § 1634 States, from the section of the Social Security Act creating the process. It is easier to name the States that do not have SSA determine Medicaid eligibility. Seven states are called SSI states; they are: AK, ID, KS, NE, NV,OR,UT. In those states, an individual found eligible for SSI will also be eligible for Medicaid, but the individual must apply separately for Medicaid through the State Medicaid agency’s application process. In the eleven § 209(b) States, SSI eligibility does not guarantee Medicaid eligibility. Those states are: CT, NH, OH, IN, IL, MO, HI, ND, OK, VA, MN. See SSA POMS § SI 01715.010 – Medicaid and the SSI program at http://policy.ssa.gov/poms.nsf/links/0501715010 . (Site visited June 3, 2010.)

Copyright © Center for Medicare Advocacy, Inc. 5

ENROLLMENT SYSTEM FAILURES The enrollment processes do not always work. Significantly, infrequent data sharing results in long enrollment delays in situations where any error requiring correction – such as a transposition of letters or numbers in a name, date of birth or Social Security Number -- exists in the data. For example, in a State exchanging data only monthly, an individual found eligible for an MSP the day following the data share in any given month would not become known to CMS until the following month; if any error existed in the data, it must be returned to the State, also in a once monthly return file, then resubmitted in the following month’s data share from the State to CMS. Uncorrected errors drag on for months under this process. In addition to infrequent data sharing, few workers at either SSA or state Medicaid agencies are familiar with processes related to people who do not have premium-free Part A. States are ignorant of the possibility of submitting simultaneous enrollments to Parts A and B. Moreover, individuals receiving SSI, who should be enrolled automatically, are sometimes missed – either by SSA or by the state Medicaid agency.

• Garcia v. Sebelius The recently-settled case of Garcia v. Sebelius provides an example of a way forward to address the systems issues that have resulted in delays, denials, and failure of the State to identify and enroll into MSP those eligible individuals who are known to it. On April 24, 2009, two individual residents of the Commonwealth of Pennsylvania and two organizations filed suit against the then-Acting Secretary of the United States Department of Health and Human Services, the Commissioner of the Social Security Administration, the Secretary of the Pennsylvania Department of Public Welfare and the Executive Director of the Philadelphia County Board of Assistance alleging the defendants’ failure to provide timely payment of Medicare premiums and adequate and accurate notice concerning delays or denials to thousands of low-income older people and people with disabilities residing in Pennsylvania. According to the complaint, failure to provide timely payment was due, primarily, to defendants’ failure to share data on eligibility and enrollment on more than a monthly basis. Under the Settlement Agreement, approved by the Court on April 23, 2010,11 the State will: within 90 days, submit MSP enrollment requests for Parts A and B on a daily basis; within 210 days, accept responses from CMS to its enrollment requests on a daily basis; within 120 days, establish a system to resolve instances where the enrollment cannot be performed due to data errors; beginning October 1, 2010, notify applicants of delays in situations where enrollment has not been effectuated within one or two months (depending on circumstances); continue to periodically and not less than every two months identify all individuals on its Medicaid rolls who are 65 or older and who are not enrolled in MSP for both Part A and B of Medicare and promptly submit requests to CMS to enroll such individuals. In addition, the State will, within 90 days, begin to submit enrollments for Parts A and B simultaneously. The Agreement also requires Pennsylvania to develop protocols, in consultation with plaintiffs’ counsel, for resolving

11 Available at http://op.bna.com/hl.nsf/r?Open=wpiy-84wqhy. (motion for approval of the settlement agreement, including the settlement agreement) and http://op.bna.com/hl.nsf/r?Open=wpiy-84wqg9 (order approving the settlement agreement.)

Copyright © Center for Medicare Advocacy, Inc. 6

enrollment problems, to inform local offices of new requirements, and to train personnel in MSP enrollment procedures. With respect to benefits retroactive to a period before the application was made for those eligible for the Specified Low-Income Medicare Beneficiary or Qualified Individual programs (there are no retroactive benefits for QMBs), the State will evaluate all applicants for MSP for retroactive benefits, including revising its mail-in application to provide for determination of eligibility for retroactive benefits and sending notices about the availability of retroactive benefits to all those found eligible for MSP benefits. The Settlement also provides for quarterly reports of various data relating to MSP enrollments and quarterly meetings with plaintiffs’ counsel for a period of 18 months to review actions taken under the Settlement agreement and identify issues with implementation. HOW TO USE THE QMB BENEFIT Even after successfully enrolling in the benefit and having it activated, beneficiaries have difficulty using the benefit. Few people – beneficiaries, providers or advocates – understand how to use it. A counselor from a State Health Insurance Counseling Program (SHIP) wrote:

You know, this client was so afraid to go to the hospital because of the co-pay. She didn't really seem to believe me that she should not have to pay these co-pays. She has had QMB since 2006. She asked me why no one told her the benefits of the QMB. I actually worked for a social services agency before coming to this job and she is right, no one tells you the benefits of the program. I am ashamed to say that I didn't really even understand the benefits till I came to this position. It seems to me that social services agencies need to take a little more responsibility in educating their clients. Which means also educating their staff. I feel terrible for this woman.

The QMB benefit is simple to describe and very difficult to use. The benefit is, quite simply, being excused from all Medicare cost-sharing, with the exception in some States of a Part C premium. (States have the option to pay any premium for Part C that is separate from the Part B premium, but are not required to.) A QMB does not have to pay: Part A and B premiums, Part A and B deductibles, and Parts A, B and C co-insurance or co-pays.12 From the beginning of the QMB program, federal courts interpreted the law to require Medicaid to pay the difference between the Medicare-approved charge and the amount Medicare paid, in most instances, the 20% Part B co-insurance.13 In 1997, Congress amended the Medicaid statute to excuse States from paying the full amount, if their Medicaid payment for the same service was

12 42 U.S.C. § 1396d(p); 42 U.S.C. § 1396a(n)(3) 13 See, e.g, Rehabilitation Ass'n of Va. v. Kozlowski, 42 F.3d 1444 (4th Cir. 1994); Haynes Ambulance Serv., Inc. v. State of Ala., 36 F.3d 1074 (11th Cir. 1994); Pennsylvania Med. Soc'y v. Snider, 29 F.3d 886 (3d Cir. 1994); New York City Health & Hosp. Corp. v. Perales, 954 F.2d 854 (2d Cir. 1992), cert. denied, 506 U.S. 972 (1999).

Copyright © Center for Medicare Advocacy, Inc. 7

lower.14 Guidance from CMS tells States that, while providers must be Medicaid providers to bill for the Medicare cost-sharing payment (if any), it is sufficient, for a provider of services to a QMB to be considered a Medicaid provider, that the provider submits a bill to Medicaid.15 Moreover, in 2008, CMS clarified earlier confusing guidance about billing QMBs for either Medicare cost-sharing or the balance of the provider’s usual and customary charge by saying unequivocally that both are impermissible.16 Myriad barriers, all interrelated, interfere with full use of the QMB benefit:

• Lack of knowledge by providers about the benefit and their obligations under it; • Lack of knowledge by QMBs about the benefit and their rights under it; • Lack of documentation for QMBs of their enrollment in the benefit; • Belief by providers, beneficiaries, and States that Medicare-only providers cannot be

reimbursed for a QMB’s cost-sharing; • Lack of a process by which a Medicare provider who is not also a Medicaid provider

can bill the State for the co-insurance; • Reluctance of providers to serve QMBs where the State does not pay co-insurance

due to its lower payment rate for the same service17and, even when rates are high enough to get payment, reluctance to participate with the Medicaid agency;

• Concerns of beneficiaries about retaliation and discrimination by providers if they assert their rights; and

• Lack of an accessible process within CMS for beneficiaries and their advocates to get assistance in informing Medicare providers of their obligations and pressuring them to fulfill these obligations.

Long-standing and recently successful advocacy in the District of Columbia on behalf of QMB clients who were being billed by providers for their Medicare cost-sharing resulted in the issuance of letters from the CMS Regional Office in Philadelphia to the providers, informing them of their legal obligations, including accepting the payment from Medicare and (if any) from Medicaid as payment in full. The Regional Office also advised providers that inappropriate

14 42 U.S.C. § 1396a(n)(2) 15 State Medicaid Manual § 3490.14 available at http://www.cms.gov/Manuals/PBM/list.asp?listpage=2 , click on chapter 3. 16 See February 27, 2008 Memorandum from Gale Arden to All Associate Regional Administrators Re: Medicaid Cost Sharing for Medicare Beneficiaries and Attachment 1: Balance Billing of Qualified Medicare Beneficiaries (QMB) Q & A, available at http://www.medicareadvocacy.org/InfoByTopic/MedicareSavingsPrograms/MedSavProg_08_04.24.ARACostShare.pdf http://www.medicareadvocacy.org/InfoByTopic/MedicareSavingsPrograms/MedSavProg_08_04.24.ARABalanceBilling.pdf 17 A 2003 report to Congress from the Secretary of the Department of Health and Human Services identified access issues in the several studied states related to payment at the lower Medicaid rate. The report did not identify the consequences to individuals of decreased access but recommended that a fuller study of the issue be undertaken. No such study has been done since. See Janet B. Mitchell and Susan G. Haber, State Payment Limitations on Medicare Cost-Sharing:Impacts on Dually Eligible Medicare Beneficiaries and Their Providers (July 31, 2003) available at http://www.rti.org/pubs/StatePaymentLimits.pdf (Site visited May 20, 2010).

Copyright © Center for Medicare Advocacy, Inc. 8

attempts to collect from beneficiaries could result in sanctions and civil monetary penalties.18 Currently, the office of the Medicare ombudsman is working with advocates to develop means of better educating providers about their obligations under the Medicare statute. However, it is still unclear how easy it will be in future individual cases to get CMS to intervene with providers who refuse to follow the law. Advocates in the District were also recently successful in persuading the Department of Health Care Finance to issue cards to individuals identifying them as QMBs to show to their physicians and other providers. The cards also provide some information to providers about billing prohibitions. The lack of a simple means to identify oneself as a QMB exacerbated the billing issues. A third issue successfully addressed by the District’s advocates is the need for a process for Medicare-only providers to bill the Medicaid agency for the cost-sharing, as CMS guidance states should happen. The District is currently working on a shortened QMB-only provider reimbursement form and procedures for securing reimbursement. Unlike most States, the District of Columbia currently pays providers who serve QMBs at the full Medicare rate, that is, it pays full cost-sharing.19 Although, to the author’s knowledge, current data do not exist describing state-by-state levels of payments, a survey undertaken in 1999, two years after the law changed to allow payment at the lower rate, showed that in 1997, about 31 States had paid at the full Medicare rate, but in 1999, only about 16 States did so.20 In States paying at the full rate, the advocacy challenges may focus on ensuring that 1) QMBs have an identification card, 2) the State has a process to accept claims from Medicare-only providers and 3) providers know how to use the process and their obligation not to bill QMBs. In States paying at a lower rate, the challenges may be greater, as providers may be less willing to serve QMBs if they cannot get the full Medicare reimbursement. At the federal level, advocates continue to urge Congress and CMS to undertake a more comprehensive study of the effects on access of paying at the lower Medicaid rates. CONCLUSION The QMB benefit has significant monetary value, especially because individuals who are eligible for it are, generally speaking, living at the poverty level. Full use of the QMB benefit could improve access to services for a population very much in need of good health services. Barriers to access to the benefit have been legion for decades, but there is reason for optimism, with

18 One of the letters (they are identical except for the name of the individual affected) is available at www.medicareadvocacy.org\InfoByTopic\MedicareSavingsPrograms\10_02.04.LtrFromROtoDCproviderReCostSharing.pdf . Advocates outside of the District of Columbia have used these letters in other situations to help clients similarly being inappropriately billed. 19 Due to budget pressures, the District’s Department of Health Care Finance is proposing to lower the reimbursement rate to 80 percent of the Medicare rate. 20 Patricia B. Nemore Variations in State Medicaid Buy-in Practices for Low-Income Medicare Beneficiaries: A 1999 Update, The Henry J. Kaiser Family Foundation (December 1999) available at http://www.kff.org/medicaid/1566-index.cfm (Site visited May 20, 2010)

Copyright © Center for Medicare Advocacy, Inc. 9

respect to speedier enrollments, in the knowledge that data sharing can occur on a daily basis. Barriers to use of the benefit have received less attention, but advocates’ understanding of the parameters of the benefit is increasing; with increased understanding will come increased efforts to improve the systems that will make the QMB benefit work.