Medicare Part D and Mental Health
Medicare Part D also called the Medicare prescription drug benefit, is an optional United States federal-government program to help Medicare beneficiaries pay for self-administered prescription drugs through prescription drug insurance premiums. Let’s discuss Medicare part D coverage for mental health in this article.
Eligibility and Enrolment
Individuals on Medicare are eligible for prescription drug coverage under a Part D plan if they are signed up for benefits under Medicare Part A and/or Part B. Beneficiaries obtain the Part D drug benefit through two types of plans administered by private insurance companies or other types of sponsors: the beneficiaries can join a standalone Prescription Drug Plan (PDP) for drug coverage only or they can join a public Part C health plan that jointly covers all hospital and medical services covered by Medicare Part A and Part B at a minimum, and typically covers additional healthcare costs not covered by Medicare Parts A and B including prescription drugs.
Note: Medicare beneficiaries need to be signed up for both Parts A and B to select Part C whereas they need only A or B to select Part D.
About two-thirds of all Medicare beneficiaries are enrolled directly in Part D or get Part-D-like benefits through a public Part C Medicare health plan. A large group of Medicare beneficiaries gets prescription drug coverage under plans offered by former employers or through the Veterans Administration.
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Medicare beneficiaries can enroll directly through the plan’s sponsor, or indirectly via an insurance broker or the exchange—called Medicare Plan Finder—run by the Centers for Medicare and Medicaid Services (CMS) for this purpose; the beneficiary’s benefits and any additional assistance payments and rights are the same regardless of enrollment channel. Beneficiaries already on a plan can choose a different plan or drop Part C/D during the annual enrollment period or during other times during the year under special circumstances.
Medicare beneficiaries who were eligible for but did not enroll in Part D when they were first eligible and later want to enroll, pay a late-enrollment penalty, basically a premium surtax, if they did not have acceptable coverage through another source such as an employer or the U.S. Veterans Administration. This penalty is equal to 1% of the national premium index times the number of full calendar months that they were eligible for but not enrolled in Part D and did not have creditable coverage through another source. The penalty raises the premium of Part D for beneficiaries, when and if they elect coverage.
Part D plans are not required to pay for all covered Part D drugs. They establish their own formularies or list of covered drugs for which they will make a payment, as long as the formulary and benefits structure is not found by CMS to discourage enrollment by certain Medicare beneficiaries. Plans can change the drugs on their formulary during the course of the year with 60 days’ notice to affected parties.
The Plan’s tiered co-pay amounts for each drug only generally apply during the initial period before the coverage gap. The primary differences between the formularies of different Part D plans relate to the coverage of brand-name drugs.
Typically, each Plan’s formulary is organized into tiers, and each tier is associated with a set co-pay amount. Most formularies have between 3 and 5 tiers. The lower the tier, the lower the co-pay. For example, Tier 1 might include all of the Plan’s preferred generic drugs, and each drug within this tier might have a co-pay of $5 to $10 per prescription. Tier 2 might include the Plan’s preferred brand drugs with a co-pay of $40 to $50, while Tier 3 may be reserved for non-preferred brand drugs that are covered by the plan at a higher co-pay, perhaps $70 to $100. Tiers 4 and higher typically contain specialty drugs, which have the highest co-pays because they are generally more expensive.
Understanding of Government and Private Insurance plan coverage is really important as it helps to get the reimbursements on time. We shared this blog series on Medicare with the same intention. We understand managing your clinic and handling billing could be overwhelming. E2E Medical Billing is known for providing end-to-end and most cost-effective billing solutions. To know more about mental/behavioral health billing services provided by E2E Medical Billing Services, you can call us at 888-552-1290 or write to us at [email protected]