Medicare Prescription Drug Improvement & Modernization Act

The Medicare Prescription Drug Improvement and Modernization Act of 2003, frequently referred to as the Medicare Modernization Act (MMA), was created in order to revamp the Medicare law and provide improved benefits. The most noteworthy provision of the MMA resulted in a prescription drug coverage benefit for Medicare beneficiaries. However, the law also contains many other provisions, all designed to reform the Medicare system, reduce administrative problems and enhance and modernize the system.

Prescription Drug Coverage

One primary change in Medicare due to the MMA was the commencement of a prescription drug benefit. This benefit, known as Medicare Part D, allows Medicare beneficiaries, if they elect to do so, to receive coverage from their insurers or heath management organizations. Pursuant to the MMA, the beneficiary pays a monthly premium depending upon the particular plan selected for drug coverage. Once the deductible is met, the coverage will apply for the full cost, less five percent, which the beneficiary must pay.

Medicare Advantage Plans

Prior to the commencement of MMA, there was a benefit known as Medicare Part C, or the Medicare + Choice plan. Under this plan, Medicare beneficiaries could elect coverage with private health insurers who would administer the Medicare benefit. Beneficiaries could leave the program and go back to Medicare. However, after MMA, these benefits changed. The new benefit is entitled Medicare Advantage, and under this plan, Medicare beneficiaries can still continue to elect coverage with private health insurers who will administer the Medicare benefit. However, under the Advantage plan, there are some restrictions. First, providers, prescriptions and emergency treatment can be limited or restricted under the plan's terms. In addition, beneficiaries have to enroll for a year and cannot change during that year.

Electronic Prescriptions

Another area covered by MMA is an electronic prescription program to be utilized by physicians that will be in place by 2009. Pursuant to the program, prescriptions should be issued via computer. The MAA also contains provisions whereby the secretary of the program is authorized to make grants to physicians to assist them in implementing electronic prescribing. Furthermore, there is a priority to rural physicians and those doctors who serve underprivileged beneficiaries.

Administration of Medicare Claims

Before the MMA was passed, Medicare claims were administered by various intermediaries. In addition, Medicare A and Medicare B claims processing involved different entities. For the MMA, just one entity was created to handle all of the claims, reducing the segmented claims processing system. Presently, there are Medicare Administrative Contractors that are appointed by region. There are fifteen regions and each one has its own contractor. Thus, the administration and processing of claims is now streamlined.

Subsidies for Low Income Beneficiaries

Prior to the commencement of MMA, there were no provisions for premium and cost sharing subsidies for low income individuals. However, after the adoption of MMA, a new section pertaining to this issue was created. Pursuant to this section, three groups were created, each one reflecting a different level of income and poverty level. Depending upon which group a person is classified in, the person may receive a full drug benefit coverage, with one hundred percent subsidy for the deductible and thereafter just one dollar per prescription drug. If the person does not qualify for a full subsidy, there are partial subsidies available, based upon the person's income.

References

• Summary of the Medicare Prescription Drug Improvement and Modernization Act