TN 32 (02-05)
HI 00801.248 Effect of Immunosuppressive Drug Coverage on Filing for R-HI and R-SMI
Originally, the Social Security Act did not provide coverage for the prescription drugs (immunosuppressive drugs) that help prevent the individual from rejecting the transplanted organ. Subsequent legislation permitted payment for immunosuppressive drugs furnished to a beneficiary who received an organ transplant that was paid for by Medicare or, if Medicare did not pay for the transplant, Medicare was the secondary payer for the transplant. Initially, Medicare only covered these immunosuppressive drugs for 12 months after the transplant procedure. This time period was subsequently extended to 18, 24, 30, 36 and 44 months. Effective 1/1/01, the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 eliminates all time limitations on Medicare coverage of benefits for immunosuppressive drugs when the beneficiary is entitled to SMI.
B. Policy – Medicare coverage of immunosuppressive drugs
Medicare will cover immunosuppressive drugs for any Medicare-covered organ transplant in the following instances:
The beneficiary was entitled to HI or HI and SMI at the time of the organ transplant and the transplant was paid for by Medicare; or
The beneficiary was entitled to HI or HI and SMI at the time of the organ transplant and Medicare did not pay for the transplant because Medicare was secondary payer to a group health plan (GHP).
In both instances, the transplant surgery must have taken place in a Medicare-approved facility and the beneficiary must be entitled to SMI during the immunosuppressive drug therapy.
The ESRD patient who receives a kidney transplant and who has GHP coverage that is primary to Medicare, must consider the best time to file an application for R-HI. As discussed in HI 00801.247F., the ESRD patient can defer filing for R-HI and (R-SMI) until the end of the ESRD coordination period (now 30 months). If a patient files for
R-HI within 12 months of the kidney transplant procedure with entitlement retroactive to the month of the transplant, the beneficiary is deemed to have R-HI effective with the month of the kidney transplant. Upon entitlement to SMI, Medicare will cover the immunosuppressive drugs.
C. Policy - R-HI and R-SMI application
1. Individual not entitled to HI
The individual who wants Medicare coverage of immunosuppressive drugs must:
File for R-HI no later than the 12th month after the month of the kidney transplant, and
Request that R-HI be effective with the month of the kidney transplant, and
Enroll in SMI.
If R-SMI coverage is elected and 6 or more months’ of retroactive premiums are due,
R-SMI can be elected as of:
The individual should be advised that if R-SMI is elected, payment of the SMI premium is required even though Medicare is the secondary payer for benefits.
If R-SMI is not elected (SMI Refusal), the beneficiary may:
Enroll during the general enrollment period with coverage effective July 1, of the year of enrollment. The beneficiary may be subject to a premium surcharge for late enrollment, and the July 1 effective date of coverage could reduce the months of available drug coverage.
2. Individual entitled to D-HI or age 65 HI at the time of the kidney transplant
The beneficiary who is entitled to HI based on disability or age at the time of the kidney transplant is eligible for payment of immunosuppressive drugs when entitlement to SMI is established. An application for R-HI should be taken only in accordance with HI 00801.258.
D. Example - R-SMI effective with the month of filing for R-HI
Ms. Kelly received a kidney transplant 11/15/02. She has GHP coverage from her employer, which is primary payer for the 30 month coordination period, 11/02 through 04/05. Ms. Kelly files for R-HI effective 11/03 and requests that coverage begin 11/02. She elects R-SMI effective 11/03, the month of filing for R-HI. Ms. Kelly must pay SMI premiums beginning 11/03, even though Medicare is the secondary payer. Medicare will cover the immunosuppressive drugs beginning 05/05, when Medicare becomes primary payer.
E. Policy – Coverage of immunosuppressive drugs upon entitlement to Medicare based on age or disability
R-HI (and R-SMI) entitlement terminates 36 months after the month of the kidney transplant (refer to HI 00820.030A.1.). However, the beneficiary who established R-HI entitlement effective with the month of the kidney transplant is eligible for immunosuppressive drug coverage when subsequent entitlement to SMI is based on age or disability.
F. Example - Subsequent entitlement to Medicare at or after age 65
Mr. Luigi (born 02/10/45) had a kidney transplant on 08/15/01, which was paid for by his group health plan (GHP). The GHP is primary payer for the 30-month coordination period that will end in 01/04. On 07/11/02, Mr. Luigi files for R-HI and R-SMI. He requests R-HI at the earliest possible date, 08/01, and chooses R-SMI coverage effective with the month of filing, 07/02.
Since Mr. Luigi established R-HI coverage the month of his kidney transplant, effective 02/04 (the end of the coordination period), R-SMI will pay for Mr. Luigi’s immunosuppressive drugs. R-SMI will continue to pay for these drugs until Mr. Luigi’s R-HI and R-SMI is terminated on 08/04 (the 36th month after the month of transplant). Upon reaching age 65 in 02/10, Medicare will again pay for the immunosuppressive drugs if Mr. Luigi enrolls in SMI at that time.
If Mr. Luigi files for R-HI after 08/02, Medicare will not pay for the drugs. Retroactive entitlement for R-HI is limited to 12 months. The earliest possible entitlement date for R-HI based on a filing date after 08/02 is 09/01; therefore he cannot establish R-HI effective with the month of transplant. Also, if Mr. Luigi enrolls in SMI when he reaches age 65, Medicare will not cover his immunosuppressive drugs.
G. Example – Subsequent entitlement to Medicare based on disability
Ms. Matthews had a kidney transplant on 04/21/02. Since she is covered under her husband’s GHP, which is primary to Medicare for the period 04/02 through 09/04, she did not file for R-HI benefits. Ms. Matthews is subsequently awarded disability benefits effective 12/02. She will be automatically enrolled in D-HI and D-SMI effective 12/04, the 25th month of disability benefit entitlement. If Ms. Matthews wants Medicare coverage of her immunosuppressive drugs for the 6-month period after the coordination period ends (10/04 through 03/05) or when she becomes entitled to Medicare based on disability in 12/04, she must file an application for R-HI no later than 04/03. She must also request that R-HI coverage be effective 04/02.
If Ms. Matthews does not establish R-HI entitlement effective with the month of transplant, Medicare will not cover her immunosuppressive drugs when she becomes entitled to Medicare based on disability in 12/04.
H. Procedure - FO development of claims
When Form CMS-2728-U3 is received for a kidney transplant patient who has GHP coverage or the patient contacts the FO directly or Form CMS-43 is received from the ESRD facility, process in accordance with HI 00801.235. It is extremely important that contact be made directly with the beneficiary or an authorized representative to inform them about the options with respect to filing an application for R-HI in order to receive coverage of immunosuppressive drugs.
Explain the policy described in HI 00801.248B. and HI 00801.248C. for establishing R-HI entitlement effective with the month of transplant and,
Advise the individual about the options for R-SMI enrollment as discussed in section HI 00801.248C. Ensure that the patient or representative understands the consequences of refusing R-SMI coverage.
CAUTION: The beneficiary should be encouraged to check with the employer or health benefits representative before making a decision about enrolling in R-SMI to help determine if enrollment is advantageous. Some GHPs may continue to pay for immunosuppressive drugs as secondary payer to Medicare even if the individual is not entitled to SMI. In this case, the beneficiary may choose not to enroll in R-SMI.
I. Policy – No equitable relief for individuals who defer filing for R-HI
ESRD transplant patients who defer filing for R-HI for more than 12 months after the month of the kidney transplant are not eligible for Medicare coverage of immunosuppressive drugs. These individuals cannot establish R-HI entitlement effective with the month of transplant because retroactive entitlement for R-HI is limited to 12 months (refer to HI 00801.191C.1.). Since equitable relief never applies to premium-free HI, the R-HI entitlement date cannot be changed to an earlier date under the equitable relief provisions (refer to HI 00805.170A.4.).
J. Policy - Immunosuppressive drug coverage for individuals who receive a kidney transplant and a pancreas transplant
Medicare will pay for a pancreas transplant when it is performed simultaneously with a kidney transplant or after the receipt of a kidney transplant. However, the pancreatic transplant does not extend Medicare entitlement beyond the 36 months prescribed under the ESRD provisions. Medicare entitlement will end the 36th month after the month of the kidney transplant, regardless of when the pancreatic transplant took place. Therefore, the ESRD patient who establishes R-HI entitlement effective with the month of the kidney transplant and who receives a pancreas transplant is eligible for coverage of immunosuppressive drugs for the 36 month period after the kidney transplant.