Wash Rpt banner

Medicare Part D 2013:
Addressing Client Issues

January 30, 2013




Let others know about Washington Report     

Recommend the Washington Report  


National Legal Resource Center  

TOPIssue Number 1                           January 17, 2013

In This Issue
Minnesota Medicaid Law Violates State Constitution
Social Security Notifies Clark Class Members
What Fiscal Cliff Deal Means to Low Income Older Adults
Problems Identified with Medicaid-Funded Assisted Living
Webinar: Medicare Part D 2013: Addressing Client Issues
2013 Medicare Part D Transition Policies
Dual Eligilbles Can Get Better Access to Physicians

Your feedback is important to us. Click here to tell us how to better meet your information needs.

Minnesota Medicaid Law

Violates State Constitution


According to a recent ruling by the Minnesota Court of Appeals, the state constitution is violated by a Minnesota Medicaid law that reduces personal care pay by 20% for care provided by a family member.  The court found that this 20% reduction failed the state constitution's "rational basis" test.  Healthstar Home Health v. Jesson, No. A12-0591 (Minn. Ct. App. Dec. 17, 2012).

The Minnesota rational basis test has three requirements: 1) the law's distinctions provide a rational and reasonable basis to justify legislation, 2) the classification is relevant to the purpose of the law, and 3) the law's purpose is legitimate.  The state standard is recognized as more stringent than the comparable test under the U.S. Constitution, with the key distinction being that the Minnesota standard does not allow courts to hypothesize a rational basis to justify a classification.

The Minnesota appellate court found that that the 20% reduction failed both the first and second requirements, without reaching a conclusion on the third requirement.  Regarding the first requirement, the state argued that family members have a moral obligation to provide personal care and, as a result, family members would continue to provide care even with a lessened pay rate.  The court, however, found that the state's arguments were based upon assumptions rather than facts, and noted submitted evidence that the pay cut would force some caregivers to apply for public assistance.  Also, the court pointed out that any caregiver (whether or not a family member) could feel a moral obligation to continue providing care.

Regarding the second requirement, the state had not submitted evidence to support its argument that the pay cut would reduce state expenditures without harming access to care.  On the contrary, a fiscal note to the legislation contemplated that the pay cut would cause some family members to cease providing personal care, in conflict with the legislative policy of Medicaid beneficiaries having a choice of service providers.

A trial court had found that the rate cut was constitutional, so the appellate court sent the case back to the trial court for issuance of judgment against the state.   


Back to Top


Social Security Notifies Clark Class Members


The Social Security Administration (SSA) reports that in December it sent informational notices to 30,704 of the approximately 140,000 members of the plaintiff class in Clark v. Astrue. All of those who have received notices so far were Social Security (OASDI) beneficiaries. According to SSA's timetable the remaining Social Security beneficiaries and all the SSI class members should receive informational notices before the end of March.


Reinstatement and payment of retroactive benefits should be occurring shortly for those Social Security beneficiaries whose claims can be processed on an automated basis. Remedial relief for SSI recipients must be processed manually and will take place gradually between April, 2013 and March, 2014.  


It is important that class members notify SSA of their current mailing address and bank account information if SSA does not already have this information. For Social Security beneficiaries, the best way to do this is on the SSA website at  www.ssa.gov.


 Back to Top 


The Fiscal Cliff Deal:

What It Means for Low-income Older Adults


On Tuesday, January 1, 2013, by a vote of 257-167, the House of Representatives agreed to approve the Senate amendments to H.R. 8, the American Taxpayer Relief Act of 2012, also known as the "fiscal cliff deal." The President signed it the next day. The focus of the deal is the extension of the Bush-era tax cuts for most Americans; however, tucked inside the legislation are a few provisions that may impact health care for low-income older adults. These include extending the funding for low-income outreach programs, the establishment of a Commission on Long-Term Care and the extension of the Qualified Individual program and Special Needs plans.  


Congress agreed to extend funding outreach and assistance for low-income programs. The Medicare Improvements for Patients and Providers Act of 2008 and the Affordable Care Act (ACA) initiatives to provide outreach and enrollment assistance to low-income beneficiaries were set to expire on January 1.


The fiscal deal repeals the Community Living Assistance Services and Supports (CLASS) Act. While the Obama Administration halted implementation of the ACA provision to create a voluntary, national long-term care insurance program a year ago, the legislation officially removes CLASS from the ACA. In a subsequent section, the deal establishes a Commission on Long-Term Care. Six months after the Commission is appointed, the Commission must vote on a comprehensive long-term care plan. Any legislative recommendations or proposals included in the plan will become the "Commission bill." If a majority of the members approve the Commission bill, then 10 days after its approval, the Commission will submit the bill to the President, Senate and House. After submission, the Senate and House Majority leaders, or one of his or her designees, must introduce the bill.


The deal extends the Qualifying Individual (QI) program through December 31, 2013. The QI program pays Medicare Part B premiums for individuals with incomes between 120 and 135 percent of the federal poverty level and resources below $6,940 for an individual and $10, 410 for a couple. With this extension, low-income older adults who may have lost their Part B coverage due to significant out-of-pocket costs should be able to maintain coverage.


In addition, the deal extends Medicare Advantage Plans for special needs individuals (Special Needs Plans) through 2015. This is particularly significant for the dual eligible demonstration, as there have been questions among advocates about the interaction between existing SNPs and plans selected to participate in a demonstration.


The deal still leaves many questions about the health-care future for low-income older adults unanswered. While the deal delays the sequester for two-months, future negotiations over the sequester, spending and the debt-ceiling may signal additional changes to Medicare and Medicaid.  


For a more detailed analysis... 




Back to Top

HHS Inspector General Identifies
Problems in Medicaid-Funded Assisted Living


 A recent report from the HHS Inspector General finds that state and federal Medicaid systems have not adequately protected the health and safety of assisted living residents. The issue has become more prominent as the role of Medicaid in assisted living has grown. The report noted annual Medicaid expenditures of $1.7 billion to pay for assisted living services for 54,000 beneficiaries in 35 states.[i]


Most Medicaid funding for assisted living services is provided through Home and Community-Based Services (HCBS) waivers. In its research, the Inspector General focused on those seven states with the most assisted living residents funded through such waivers; those states are Georgia, Illinois, Minnesota, New Jersey, Oregon, Texas, and Washington. In those seven states, the Inspector General found that 77 percent of Medicaid beneficiaries resided in a facility which had been found noncompliant with at least one state licensure or certification requirement.


In addition, in violation of federal standards, nine percent of beneficiaries did not have plans of care, and 42 percent of the plans of care failed to specify the frequency of services. Five of the seven states require in addition that plans of care list a beneficiary's goals and the interventions necessary to meet those goals but, in those five states, 66 of the plans of care did not do so. Two of the seven states require that plans of care be signed by a beneficiary or the beneficiary's representative; in those states, regardless, 48% of plans were unsigned.


Based on these findings, the Inspector General recommended that the Centers for Medicare and Medicaid Services (CMS) issue guidance specific for HCBS funding for Medicaid services. In response, CMS said that would "issue guidance reminding states of their responsibilities in operating all waivers, and specifically those servicing [assisted living] residents." CMS also suggested that its work on quality measures is addressing many of the concerns raised in the Inspector General's report.


The Inspector General's report follows the same office's finding this summer, in a companion report, that seven of 25 states do not have adequate systems to ensure the quality of care provided to Medicaid-covered assisted living residents. [ii]  On the one hand, neither of these reports has recommended significant changes to existing systems, and neither names the specific states found to have inadequacies. On the other hand, the mere publication of the reports is a helpful uptick in the attention paid Medicaid-funded assisted living and, more generally, to services provided through HCBS waivers.

[i]   HHS OIG, Home and Community-Based Services in Assisted Living Facilities, Rep. No. OEI-09-08-00360 (Dec. 2012).

[ii]  HHS OIG, Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver Programs, Rep. No. OEI-02-08-00170 (June 2012).



Back to Top 


Webinar Series:

Medicare Part D in 2013: Addressing Client Issues


January 30, 2013



Now that the Medicare Part D annual enrollment period is over, beneficiaries are learning whether their plans really work for them. This webinar for advocates who serve older adults and persons with disabilities will discuss:

  • What's new for 2013 in the Medicare prescription drug program
  • Transition rights
  • Opportunities to change plans
  • Typical client issues and the best routes to resolve them
  • And more

Presenter: Georgia Burke, NSCLC Directing Attorney


Space is limited.



2013 Transition Policies for Medicare Part D


The new plan year for Medicare Part D began January 1 and many beneficiaries, particularly low-income subsidy individuals who were reassigned, are adjusting to new plans or to new rules in their current plans. During the first three months of the plan year, beneficiaries have a limited right to transition supplies of drugs that may not be on their plan formulary or that may be subject to utilization management requirements. Plans also are required to clearly inform members receiving transition supplies about the next steps available to them.  

The Centers for Medicare and Medicaid Services has warned plans that the agency is watching closely to determine whether plans are acting consistent with CMS requirements. We urge advocates who encounter transition policy problems to report them to CMS, even if the client is ultimately able to obtain needed medications. 

To assist advocates in understanding the transition rights of their clients, NSCLC has prepared a fact sheet.

Read More 



Dual Eligibles Can Get Better

Access to Physicians in 2013


Starting January 1, 2013, state Medicaid programs are required to pay certain physicians offering primary care services at rates that are no lower than Medicare rates.  It is important for advocates to understand this change in order help clients access providers, advocate for more Medicaid providers and other important systemic fixes at the state level.


A federal match will cover 100% of the added costs. This change, which implements a provision of the Affordable Care Act, affects primary care services by primary care physicians, internists, and nurse practitioners and physician assistants working under the direction of a physician. The change affects all Medicaid beneficiaries


For dual eligibles (individuals qualifying for both Medicare and Medicaid), the change offers the hope of a significant improvement in provider access. Coverage extends to a broad range of services and a number of important subspecialties used frequently by seniors and persons with disabilities.


The National Senior Citizens Law Center has prepared an analysis to assist advocates in understanding what is changing in 2013 and how the change will impact their dual eligible clients.  


To see the details... Read More 



NSCLC staff are available to help advocates with answers to questions about program rules and requirements, reviewing and analyzing pleadings, commenting on proposed litigation, assisting in the formulation of strategies, drafting opinion letters and providing memoranda, articles and other written materials.  

Washington Report is a biweekly newsletter and available only by subscription. Do not reproduce or transmit in whole or in part without express permission of the editor. Paul Nathanson, Executive Director. Scott Parkin, editor.  Nancy Arevalo, circulation (510) 663-1055 ext.301. 2012 National Senior Citizens Law Center.


The National Senior Citizens Law Center is a non-profit organization whose principal mission is to protect the rights of low-income older adults. Through advocacy, litigation, and the education and counseling of local advocates, we seek to ensure the health and economic security of those with limited income and resources, and access to the courts for all. For more information, visit our Web site at www.NSCLC.org.