LTC Bullet: Special Alert--Medicare to Cover Alzheimer's Disease
Saturday, March 30, 2002
At 12:41 PM Eastern time on Saturday, March 30, 2002, the New
York Times broke the following story in its online edition.
Print editions of every major paper will carry the story tomorrow, Easter
Sunday, March 31, 2002. Here are
some excerpts followed by our interpretation of the news.
Read the whole story at: http://www.nytimes.com/2002/03/31/politics/31MEDI.html?pagewanted=print&position=top
Pear, "In a First, Medicare Coverage Is Authorized for Alzheimer's," The
New York Times, March 31, 2002,
March 30, 2002 - The Bush administration, in a major change, has authorized
Medicare coverage for the treatment of Alzheimer's disease, which afflicts
nearly four million Americans and is expected to grow to epidemic proportions
with the aging of the population.
new policy means that Medicare beneficiaries can no longer be denied
reimbursement for the costs of mental health services, hospice care or home
health care just because they have Alzheimer's.
the past, many claims were automatically denied on the assumption that treatment
was futile because people with Alzheimer's were incapable of any medical
improvement. Now, federal officials
say, new studies show that people with Alzheimer's can often benefit from
psychotherapy, physical and occupational therapy and other services." . . .
federal officials nor advocates for the elderly provided estimates of the cost
of the new policy. Experts said the
direct cost to Medicare could be several billion dollars a year."
. . .
policy is set forth in a memorandum sent late last year from the government to
the companies that review and pay Medicare claims. These companies have just begun to put the change into
government gave no public notice of the new policy, but it has already made a
difference in the lives of some people with Alzheimer's.
Some patients have received benefits that were once denied, and some
medical practitioners have secured payment for services that Medicare once
refused to cover." . . .
[Stephen R.] McConnell of the Alzheimer's Association estimated that 10 percent
of people over 65 and nearly half of those over 85 had Alzheimer's, a brain
disorder that causes loss of memory, changes in personality and behavior, and a
decline in thinking abilities.
the policy, Medicare will pay for more therapy and outpatient services.
Dr. Steven T. DeKosky, a neurologist who directs the Alzheimer's Disease
Research Center at the University of Pittsburgh, said these services would 'keep
people out of nursing homes,' avoiding costs that would otherwise be borne by
the government, patients or their families." . . .
A. Metzler, director of federal affairs at the American Occupational Therapy
Association, said the new policy was 'tremendously significant' for patients.
'In the past,' she said, 'a diagnosis of Alzheimer's could prevent a patient
from getting Medicare coverage for therapy to treat other conditions - a broken
hip, a broken wrist or a stroke. If
a diagnosis of Alzheimer's showed up anywhere on the claim, Medicare tended to
COMMENT: Medicare coverage of
health conditions incidental to Alzheimer's Disease is big news and good news.
Unfortunately, this news is not as big or good as most people will think.
If misunderstood, it could hurt more people than Medicare helps.
the impression given by the headlines and the story itself, Medicare is not
going to cover any more kinds of services than it did before.
The only difference is that Medicare carriers will no longer be allowed
to deny the same covered services to beneficiaries based on a diagnosis of
Alzheimer's Disease. Medicare
beneficiaries will still have to jump through all the other, severely
restrictive eligibility hoops that limit access to Medicare's home health care
benefit. Medicare still won't pay
for long-term custodial home health, assisted living or nursing home care, the
single biggest financial risks seniors face.
we all know, Medicare covers only rehabilitative care, not long-term custodial
care. That fact is not changing.
If Medicare were truly going to cover the enormous care costs incidental
to Alzheimer's Disease, the extra expenditures would not be "several
billion dollars a year" but rather, hundreds of billions of dollars per
year. And where is Medicare going
to find even a few extra billions? Congress is planning to chop Medicare costs, not augment
them: "A scheduled 17%
reduction in Medicare reimbursement rates for nursing homes could have a
'significant ' impact on quality of care at those facilities, according
to a new study released March 25 by the American Health Care Association and the
Alliance for Quality Nursing Home Care (Wheeler, Gannett News Service/Asbury
Park Press, 3/24)."
the public interprets Medicare's "coverage" of Alzheimer's
Disease as one more reason to ignore the financial risk of long-term care, they
may be even less likely than they already are to prepare for that risk.
Even before this latest news, many studies showed that an alarming
percentage of the public already believed that Medicare covered long-term care.
Will more people fail to plan early and save, invest or insure for
long-term care because they believe, mistakenly, that Medicare covers that cost?
Will seniors all across America be canceling their appointments with
financial planners and insurance agents on Monday, April 1? If so, it will be one of the biggest and most damaging April
Fools jokes ever perpetrated on the American consumer.
Our advice to LTC insurance producers and other senior advisers is:
expect the objection that "Medicare will cover me" to become even more
common than it already is,
re-arm yourself with all the facts about limitations on Medicare coverage,
tell your prospects and clients the hard truth, but without using "scare
remember that even though Medicare does not provide "long-term care"
coverage, Medicaid often does, and
(5) be prepared to warn people about Medicaid's problems of access, quality, reimbursement, discrimination and institutional bias as you advise them against the temptation of Medicaid estate planning.