Health Plans Suspend Rules In Response To Katrina

Many health plans in areas affected by Hurricane Katrina have temporarily suspended billing and payment requirements. Below is a brief summary of some accommodations provided by staff of the A.C.C.E.S.S. (Advocating for Chronic Conditions, Entitlements and Social Services) program.

STATE PLANS

Alabama: The Governor issued a September 2, 2005 proclamation extending the time under Ala. Code §34-23-75 for one-time emergency refilling of prescriptions from 72 hours to 30 days, but only for persons identified as evacuees. This extension applies to all pharmaceuticals. The Board of Pharmacy issued an Emergency Prescription Order that permits pharmacists licensed in Alabama, to dispense required medication to patients in a natural disaster emergency. Copies are available at www.albop.com.

Alabama Medicaid released a statement assuring that Alabama providers will be reimbursed for services rendered to displaced Medicaid beneficiaries from Louisiana or Mississippi. However, providers will only be reimbursed according to the out-of-state payment policies in those states (which generally reimburse less than for in-state providers.) See www.medicaid.alabama.gov. The Alabama Hospital Association has created a searchable database of patients transferred to Alabama hospitals due to Katrina. See http://alaha.org.

Health plans doing business in Alabama are voluntarily suspending billings or offering grace periods for payments in affected areas. Blue Cross Blue Shield of Alabama has suspended billings statewide. To date, there appears to be no regulatory directive requiring such action.

Florida: In anticipation of the threat posed by Katrina, the insurance commissioner preemptively ordered health plans to temporarily suspend their regulations regarding prescription refills until September 30, 2005. This action mirrors an emergency order issued earlier this year in anticipation of other storms and authorizes payments to pharmacies for at least a 30-day supply of medication regardless of the date the last prescription had been refilled.

Florida also is the first State to create a special eligibility category for evacuees, even though the Federal government has yet to require States to do so (see below.) Copies of this announcement are at www.fdhc.state.fl.us/Executive/Communications
/Press_Releases/09_13_2005.shtml.

Louisiana: The insurance commissioner released draft directives 185 and 187 on September 8, 2005 requiring health plans doing business in Louisiana to suspend electronic filing requirements, timely claims deadlines, and pre-certification rules so long as the Governor has declared a state of emergency. The directives also provide for advanced payments to plan beneficiaries.

Under the proposals, patients can receive care at any out-of-network provider. These providers will be paid the higher of any contracted rate, the highest benefit level or percent of charges to which the beneficiary is entitled under the plan, or the total billed charges.

In addition, pharmacies will be required to waive prescription refill requirements. All patients should receive at least a 30 day supply of applicable prescriptions, regardless of ability to pay, as directed by the pharmacy board (See www.dhh.louisiana.gov/offices/faq.asp?ID=145#Faq-922.) Copayments and deductibles should be waived.

The directives "make null and void" any cancellation notices for health or disability policies that did not occur prior to the state of emergency. Plans must maintain the policies through at least September 25, 2005 and must defer (without increased premiums) all renewals until January 1, 2006. Furthermore, no insurance policy can be canceled or not renewed because of hurricane-related claims. The directives will have the force of law and subject violators to fines of up to $1,000 per violation. Copies are available at www.ldi.state.la.us/HurricaneKatrina.htm.

Louisiana Medicaid suspended all prior authorization requirements for beneficiaries in affected areas. The renewal period for Medicaid and the Children's Health Insurance Program (LaCHIP) has been extended by six months. See www.dhh.state.la.us. Over 19 percent of state residents are on Medicaid, one of the highest percentages in the nation.

The Louisiana Health Plan extended grace periods for premium payments under its high-risk plan and HIPAA plan until October 30, 2005. See www.lahealthplan.org.

Mississippi: The Department of Insurance ordered all insurers doing business in the state to provide a 60-day grace period for collection of premiums relating to any insurance plan. See www.doi.state.ms.us/pressrel/pressrel9105.pdf. A.C.C.E.S.S. is awaiting additional information.

The Division of Medicaid is "encouraging" out-of-state providers to provide needed services to displaced Mississippi Medicaid beneficiaries, but as with Louisiana will only reimburse those providers according to its existing out-of-state payment policies. See www.dom.state.ms.us.

Michigan: The Department of Community Health "strongly urges" all Michigan providers to provide immediate service to evacuees while they work thru billing and other administrative matters. Providers should conform as much as possible to the out-of-state coverage policies established by Medicaid programs in their home states. See www.michigan.gov/mdch.

Missouri: The governor issued an executive order permitting physicians licensed in Louisiana or Mississippi to render care to evacuees relocated to Missouri.

Tennessee: Executive Order No. 27 allows pharmacists to dispense a 30-day supply of medication without authorization to evacuees, subject to all other statutory considerations. The state has discretion to allow nurses and pharmacists licensed in other states to work in Tennessee, and any person licensed to practice medicine or authorized to practice medicine in the state pursuant to this Executive Order to dispense prescription medication to evacuees without charge.

TennCare, the state Medicaid program, is "encouraging" providers to treat evacuees from affected states even if Medicaid documentation or eligibility questions exist. TennCare announced that if evacuees met all eligibility requirements in Louisiana or Mississippi, they will temporarily be deemed TennCare eligible. However, the director issued a September 8, 2005 release stating that TennCare enrollment was not available to evacuees who fail to meet eligibility requirements in their home state. See www.state.tn.us/tenncare.

Texas: Pursuant to emergency authority under Section 418.016 of the Texas Government Code, the Governor issued a general proclamation that "all rules and regulations that may inhibit or prevent prompt response to this threat are suspended for the duration of the incident." The state specifically waived licensing fees for professionals relocated to Texas as a result of Katrina.

Per the emergency refill provision of the Texas Pharmacy Act (Section 562.024), the Board of Pharmacy is permitting pharmacists to "use their professional judgment" and provide up to a 30-day supply of medication (other than Schedule II controlled substances) for evacuees relocated into Texas.

FEDERAL PLANS

Agency Directives
The Centers for Medicare and Medicaid Services issued a September 6, 2005 fact sheet stating that most operational and documentation requirements for Medicare, Medicaid, or the state Children's Health Insurance Programs (SCHIPs) will be "relaxed" due to the relocation of evacuees. This action also applies to out-of-network care and HIPAA privacy regulations. Provides should presume eligibility in cases where evacuees lack proper documentation.

In response to complaints by Medicaid programs that CMS failed to clarify how state health programs and providers will be reimbursed for delivering care to Katrina victims, CMS announced on September 9, 2005 that it is developing a protocol to grant emergency waivers providing temporary eligibility for all eligibility groups, retroactive to August 24, 2005. The agency also indicated it may establish a new category of eligibility under Medicaid and SCHIP for Katrina victims whose eligibility cannot be verified in their home state. This category would include groups that would not otherwise qualify, such as childless adults. CMS would require states to waive normal document requirements verifying a person's Medicaid or SCHIP status in their home state. See www.cms.hhs.gov/media/?media=facts for copies of both fact sheets.

The Texas Governor and Senate delegation complained to CMS that the State could not pay its 39 percent share of Medicaid costs for its 383, 000 hurricane evacuees. In response, CMS agreed on September 15, 2005 to grant a waiver specific to Texas under which the Federal government will pay the full Medicaid costs for this population, expected to run over $175 million in the next five months.

Creation of such temporary Medicaid categories to handle disaster-related claims is not unprecedented. After the 9-11 attacks disrupted Medicaid computer systems in Manhattan, New York state created a temporary Disaster Relief Medicaid (DRM) to expedite and simplify the processing of 350,000 outstanding claims. See www.kff.org/medicaid/4062-index.cfm.

There does not appear to be any Federal directive on how private health plans should respond. However, the Office of Civil Rights for the Department of Health and Human Services (HHS) did clarify how current HIPAA privacy regulations apply to disaster relief. See www.hhs.gov/ocr/hipaa/KATRINAnHIPAA.pdf.

The Office of Public Health Emergency Preparedness directed that physicians, nurses and other health care professionals who volunteer in affected areas will not have to comply with other state licensing requirements as long as they have valid licenses in their home states.

Legislation
Democrats in the House and Senate introduced legislation on September 8, 2005 to provide full Federal funding for Medicaid services to Katrina victims without requiring them to pass Medicaid asset or income tests, with a similar Republican version introduced on September 12, 2005. This includes the Temporary Medicaid Disaster Relief Act of 2005 (H.R. 3698) raising the Federal matching percentage to 100 percent in affected areas (the Federal government currently pays roughly two-thirds of Medicaid costs in all states.) It would also suspend enrollment and documentation requirements for dual eligibles and ensure persons eligible for both Medicaid and the new Medicare Part D prescription drug benefit continue to receive drug coverage beyond the January 1, 2006 cut-off date. The analogous version in the Senate (S.1637) would last six months and cost roughly $6-$8 billion.

Although a $62 billion emergency aid package [P.L. 109-062] quickly passed both the House and Senate and was signed by President Bush on September 8, 2005, this secondary healthcare legislation has been slowed by political wrangling. Despite Medicaid being the "main way to provide medical coverage for many evacuees... the White House appears cool to any expansion" of Medicaid for evacuees, and Senate Majority Leader Bill Frist (R-TN) was "not convinced" it was needed. ("Katrina Lays Bare Medicaid Dispute," Wall Street Journal, September 14, 2005.) Republican leaders expressed concern that Katrina relief could be used as justification to pass more ambitious laws than could otherwise be enacted, similar to post 9-11 Patriot Act legislation ("Second-Wave of Katrina Legislation Hits Snag," Associated Press, September 14, 2005.)

However, both Republican and Democratic senators have asked Senate Finance Committee chairman Charles Grassley (R-IA) to delay the Committee's consideration of $10 billion of Medicaid cuts in response to the demands imposed by Katrina. Majority Leader Frist stated on September 12, 2005 that it "would be absolutely wrong" to proceed with any cuts.

PRIVATE PLANS

America's Health Insurance Plans (AHIP) established a national toll-free number at (800)-644-1818 to help evacuees reconnect with their health plans, regardless of their carrier or location. AHIP also provides a comprehensive list of private health plan responses to Katrina at www.ahip.org/HurricaneResponse. Some examples are as follows:

Aetna: Waived requirements for medical pre-certification, referrals, medical necessity reviews and notification of hospital admissions. Also permitted members in Alabama, Louisiana, Mississippi and Florida to refill prescriptions even if they are not due to be filled for 30 days.

BCBS Louisiana: All prior authorization requirements indefinitely suspended with a 30-day grace period permitted for payment of premiums. Early prescription refills permitted.

Unicare: Suspended all pre-certification, utilization management, network, prescription refills, and copayment requirements until September 30, 2005.

If you have contracts or a large volume of claims with certain health plans, please let us know so we can research accommodations specific to that plan. Individual state insurance commissioners, the America's Health Insurance Plans, and the National Conference of State Legislatures are all good resources for updates on this issue. Please contact our newest staff member, Mark Hobratschk, at (888)-700-7010 or Mark.Hobratschk@access-program.com
with any questions or for additional information.