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To Address Medicare Part D Confusion, States Take Matters into Their Own Hands; CMS Heeds Call

Posted on: Friday, 31 March 2006, 06:00 CST

By Anonymous

Medicare Part D

Start-up problems with the new Medicare Part D program have angered enrollees, frustrated pharmacists, and engendered legislative action in 31 states and the District of Columbia since the program took effect Jan. 1. The problems mainly relate to drug plan enrollment records-that is, coverage records not being available at the pharmacy, or enrollees being charged excess copayments. Of the states that have taken emergency or transitional action, most are temporarily covering prescription drugs for Medicare-Medicaid dual-eligibles and other Medicare enrollees.

As of Jan. 13, 14.3 million beneficiaries were covered by the Medicare Part D program. Medicare is subsidizing almost 3,000 different plans in 84 regions.

On Jan. 13, CMS Administrator Mark McClellan ordered all insurers to fill a So-day emergency supply of prescription drugs Medicare beneficiaries were taking before the new drug program began on Jan. 1. (That time period has since been extended to 90 days.) In addition, insurers have been instructed that low-income seniors are not to pay more than $2 per generic prescription and no more than $5 for other prescriptions.

Also, HHS Secretary Mike Leavitt said that steps were under way to remedy the rampant problems occurring since the Part D rollout. Leavitt said that help lines are now staffed by 4,500 operators- compared with 150 on Jan. 1-and that no beneficiary should leave a pharmacy without a filled prescription.

Nevertheless, Republicans and Democrats alike have complained about how the prescription drug program is being carried out. Bipartisan legislation was introduced by senators Frank Lautenberg (D-NJ.) and Olympia Snowe (R-Maine) to require the federal government to reimburse the states that have paid for prescription drugs for dual-eligible seniors who have had trouble getting their prescriptions filled under Medicare Part D. Although CMS had said it will help states recoup the money from the private insurance plans administering the Medicare drug benefit, the legislation sought to have Medicare directly reimburse the states.

Consequently, CMS announced Jan. 24 that it will indeed reimburse states that have stepped in to pay for prescriptions for Medicare beneficiaries who have been denied drugs through problem-plagued Medicare Part D. CMS head Mark McClellan said that CMS expects states to first get reimbursement for drug costs from health insurers offering Medicare Part D, and then CMS will make up any shortfall in reimbursement. McClellan asked states to suspend payment for seniors' prescriptions by Feb. 15.

Nevertheless, the trickle of bills proposing to remedy the confusing program is turning into a stream. U.S. Sen. Carl Levin (D- Mich.) is asking Congress to make immediate changes to Medicare Part D. Among other things, Levin is proposing that the "doughnut hole" coverage gap that requires Medicare beneficiaries to absorb the full cost of $2,850 of their prescription drugs be closed.

Also, citing Vermont seniors' confusion over Medicare Part D, Rep. Bernie Sanders (I-Vt.) is expected to introduce legislation to replace the drug program with one that would waive or reduce the 20 percent copay and monthly premium for low-income seniors and place an annual cap of $2,000 on out-of-pocket drug expenses.

And calling the Medicare bill "the biggest fiasco in memory," Democratic senators have introduced a bill that would require all prescription drug plans to provide new enrollees with at least 3o days of prescription drugs during their transition to Medicare.

Meanwhile, AARP is attempting to get Congress to revise Medicare Part D rules so that more seniors qualify for financial assistance under the drug benefit. The advocacy group also wants the government to negotiate drug prices instead of allowing insurance plans that sell Medicare Part D plans to set pricing.

The Medicare drug program-the largest expansion of Medicare since its establishment in 1965-was created in 2008 to address seniors' concerns about drug costs that were rising more than 10 percent a year. However, as many as 25 percent of seniors may find that their drug expenses are higher under Medicare Part D, according to a 2004 Kaiser study.

A LOT OF MONEY FOR THE RUN: In 2002, approximately 25 percent of ambulance transports did not meet Medicare requirements, according to a report by the Office of Inspector General. CMS overpaid for such services by $402 million that year.

Copyright Healthcare Financial Management Association Mar 2006

Source: Healthcare Financial Management

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