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January 23, 2006

Washington Health Policy Week in Review Archive 21a9b424-4884-45a1-a16b-93d143cc7e7e

Newsletter Article


'Chaos' Looms in Long-Term Care Because of Complexity of Drug Benefit, CMS Told

JANUARY 20, 2005 -- Payment delays stemming from the start of the new Medicare drug benefit are putting nursing homes in an economic bind, says the American Society of Consultant Pharmacists.

And the problem needs to be fixed fast "to prevent chaos in long-term care," the group says.

A CMS spokesman said that while some nursing homes have reported payment problems and the agency is working to fix them, those reports are relatively few. (See related story, this issue.)

Under the new drug benefit, many nursing home residents have been randomly assigned to the new Medicare prescription drug plans, without regard to the particular medications they are on. This auto-enrollment procedure was undertaken by CMS to ensure that residents formerly on Medicaid drug coverage didn't lose access to prescription drugs in the switch to the new Medicare drug benefit. Residents could switch coverage if the plan wasn't a good fit.

But the benefit's startup has been marred because in many cases pharmacists haven't been able to confirm with plans that these dual eligibles are actually enrolled, pharmacists say. Data gaps in a federal database linking plans to dual-eligibles appear to be the reason for many of the early foul-ups, state officials say.

In the meantime, nursing homes and pharmacists are fronting the costs—an expensive endeavor. The longer the delays in receiving payment from drug plans, "the more difficult it will be for long-term care pharmacies to continue sending medications to long-term residents without payment," the group said in a letter Friday to CMS Administrator Mark B. McClellan.

Many drug plans have not been complying with CMS transition policies that require they temporarily continue access to medications residents received under Medicaid but that the new plan doesn't cover, the pharmacy group said in the letter.

Plans also are jumping the gun in enforcing coverage policies that require a doctor to specifically authorize the use of a particular brand or to try other drugs first, the group said. "Clearly, the transition principle of providing Medicare beneficiaries with unfettered access to medications while they transition to Medicare Part D has been violated by the plans," the letter said.

Plans also have been instructing pharmacies to collect copayments from dual-eligible nursing home residents, which is forbidden under the Medicare drug law (PL 108-170), the group said. And plans are rejecting claims for injectable drugs, even though in some cases they should cover them.

There also are too many plans with too many different coverage policies, it said. "This tremendous variability among plans not only presents serious operational challenges for long-term care pharmacies and facilities, but also presents a threat to the provision of quality of care to long-term care residents," the letter concluded. "The current CMS approach of addressing issues one plan at a time, and one issue at a time, relying on voluntary cooperation of plans to resolve them, could take years."

CMS spokesman Gary Karr said his agency has taken steps to remind prescription drug plans of their obligations under the agency's transition policies.

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From the CQ Newsroom: Democrats Blast Handling of Prescription Drug Benefit, Propose Multiple Remedies

JANUARY 19, 2005 -- Democratic Senators broadly criticized the federal government's implementation of the Medicare drug benefit Thursday, demanding reimbursement for states that have filled in gaps during the rollout of the federal program.

The senators—including John D. Rockefeller IV, of West Virginia, Debbie Stabenow of Michigan, Frank R. Lautenberg of New Jersey and New Yorkers Charles E. Schumer and Hillary Rodham Clinton—plan to introduce legislation Friday that would require the federal government to reimburse states and Medicare beneficiaries for money they have spent on prescriptions while problems with the program are sorted out.

More than 20 states have stepped in to provide prescription drug coverage for beneficiaries who were being turned away from pharmacy counters or had to pay out-of-pocket expenses because of inaccurate information in Medicare databases.

"The federal government needs to repay these states that are bailing them out," Lautenberg said at a news conference.

The biggest problems have occurred with low-income seniors who had been receiving drug coverage under Medicaid, but were switched to coverage under a Medicare drug plan on Jan. 1. These seniors were automatically enrolled in one of several private plans unless they specified their preference.

The senators said their offices have been flooded with calls from seniors who have had trouble filling prescriptions because they have not yet received their insurance cards or the pharmacists have been unable to get information on their plan.

The bill would also require plans to cover a 30-day supply of a drug even if it is not included on their formulary in order to give seniors time to get new prescriptions or talk to their doctor.

The Democrats' bill would also require more outreach efforts from CMS and an increase in the number of operators available when seniors call the Medicare help line.

Another proposal, by Democrats Schumer, Lautenberg, and Dianne Feinstein of California and Republicans Norm Coleman of Minnesota and Olympia J. Snowe of Maine, would only require the government to reimburse states. A limited bill could have a better chance of passing the Senate if leaders decide to address the issue.

Finance Chairman Charles E. Grassley, R-Iowa, who helped write the 2003 Medicare law (PL 108-173) issued a statement Thursday cautioning against hasty action by the Senate.

"It's too early to commit to any legislative options because it's unclear whether any legislation is needed," Grassley said. "Let's focus on the administrative remedies now because they'll deliver help a lot faster than any legislation."

Grassley also said the responsibility lies not with the states, but with insurers.

"States aren't responsible for these prescription drug costs. Beneficiaries are entitled to drug coverage under the new Medicare benefit, and the prescription drug plans are liable to the states for these costs. The plans are under contract to provide the coverage and they're obligated to reimburse the states for the cost of prescriptions that should have been paid for under the drug benefit."

On Jan. 17, CMS Administrator Mark B. McClellan and Health and Human Services Secretary Michael O. Leavitt said they were working with pharmacies and states to address the problems and would work with states to recoup their costs from insurance companies.

Opening Up the Law
Democrats also said Thursday that they would be pressing for bigger changes in the Medicare drug law once the immediate problems are fixed.

Stabenow said she planned to propose legislation that would set up a Medicare drug plan that was administered by CMS instead of by private insurers.

Calling that approach "straightforward," Stabenow said seniors wanted such a plan. "The one choice they don't have under this plan is the one they want," she said.

Rockefeller predicted there would be pressure for changes in the law. "I don't think this thing is here to stay," he said. "We're going to have to come back to this."

Senate leaders have been reluctant to revisit the Medicare bill because it could face attacks from both sides of the aisle—from Democrats who think it does not go far enough, and from conservatives who blanch at the cost of the new entitlement.

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GAO Finds Continued Problems with Oversight of Nursing Home Care

JANUARY 20, 2005 -- Despite increased oversight of nursing homes, the Government Accountability Office has found several safety issues remain, such as worsening pressure sores, untreated weight loss, and uninvestigated complaints about harm to residents.

GAO also found the results of state inspections, known as surveys, understated the extent of serious quality-of-care and fire safety problems, reflecting weaknesses in the survey methodology and inconsistent application of federal standards.

Senate Finance Chairman Charles E. Grassley, R-Iowa, one of two senators who requested the report, said "faster, sustained progress" is needed to improve nursing home safety. "A lack of oversight by [the Centers for Medicare and Medicaid Services] years ago is what led to the steady decline in nursing home quality," he said.

Millions of baby boomers heading into retirement will increase the demand for nursing home care. Residents of such facilities often require help with feeding, grooming, and other routine activities of daily life. Some residents also suffer from cognitive impairments or have chronic health care conditions such as heart disease.

Combined Medicare and Medicaid payments for nursing home services were about $65 billion in 2003, including a federal share of about $43 billion, GAO reported to Grassley and Herb Kohl, D-Wisc., the ranking minority member of the Senate Special Committee on Aging.

GAO found serious complaints by residents, family members, or staff alleging harm to residents remained uninvestigated for weeks or months, and that delays in the reporting of abuse allegations compromised the quality of available evidence, which hindered investigations.

GAO investigators also found that when serious deficiencies were identified, federal and state enforcement policies did not ensure the problems were addressed and didn't resurface. Federal mechanisms for overseeing state monitoring of nursing home quality and safety "were limited in their scope and effectiveness," GAO reported.

While CMS' nursing home data show a significant decline in the proportion of nursing homes with serious quality problems since 1999, the trend "masks two important and continuing issues: inconsistency in how states conduct surveys and understatement of serious quality problems," GAO concluded.

According to GAO, CMS generally concurred with the report's findings, noting progress has been made in many areas, such as surveys and complaint investigations, oversight activities, and citation of serious deficiencies, but that challenges remain.

Groups representing nursing homes said they generally agreed with the GAO's findings, especially the agency's conclusion that the nation's survey and enforcement system for nursing homes is consistently inconsistent, with significant variations from state to state.

"Providers have long maintained that the government cannot utilize a one-dimensional punitive approach as a means to achieving quality care," the American Health Care Association said in a statement. "Achieving sustained quality care can only be achieved with a collaborative approach based on patient outcomes rather than a punitive, highly subjective process that provides no best-practices counsel to facilities."

Larry Minnix, president and chief executive officer of the American Association of Homes and Services for the Aging, said his group is urging Congress to pass legislation "that makes common sense reforms in these processes. What we all want to achieve is a system that addresses deficient practices in a fair and equitable manner."

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HHS Scrambling to Address Problems with Medicare Drug Benefit

JANUARY 17, 2005 -- Seeking to get the new Medicare drug benefit on track after a week of growing complaints about its rocky start, Health and Human Services (HHS) officials outlined a variety of steps Tuesday to end interruptions that have occurred in access to medications by the poor. They also released new figures to build the case that the benefit is well on its way to meeting first-year enrollment targets, and played down the need for any legislative intervention, saying it's up to drug plans to ensure that states are properly paid for restarting Medicaid drug coverage in some cases.

Acknowledging problems that many seniors have faced filling prescriptions under the new Medicare drug program, administration officials said they are working with health plans and pharmacists to ensure seniors are not turned away at the pharmacy counter.

The administration also pledged to work with states that have stepped in to help seniors with drug costs while the new benefits get sorted out. About 20 states have picked up the tab for prescription drugs and declared health emergencies as low-income seniors reported problems filling their prescriptions.

Because the Centers for Medicare and Medicaid Services (CMS) does not have authority to reimburse states for those costs, according to administrator Mark B. McClellan, the agency will instead assist state agencies in compiling and filing claims with each private insurer offering a prescription drug plan to seniors to recoup the money spent. If the claims are not enough to cover state expenses, governors could put pressure on Congress to pass legislation reimbursing them.

The Bush administration has taken criticism from governors and lawmakers of both parties over the implementation of the 2003 law (PL 108-173), a program that was supposed to be a triumph for the president.

Instead, thousands of poor seniors reported trouble filling their prescriptions because they did not show up in the database as belonging to a certain plan or because their new plan does not cover prescriptions they had been taking before the new benefit kicked in on Jan. 1.

These seniors, known as "dual eligibles" because they qualify for both Medicare and Medicaid, used to receive prescription drug coverage under Medicaid, the joint federal–state health insurance program for the poor. But on Jan. 1, about 6 million of these "dual eligibles" were transferred to private insurance plans offering drug coverage under the new Medicare law.

Because many of them switched plans in December, their information may not be accurate in pharmacy databases, and newspapers around the country have jumped on stories of seniors turned away at the pharmacy counter or forced to pay high co-pays for drugs that are supposed to be covered on their plan. Some seniors have reported that the new drug plan they are on does not cover the drugs they had been taking.

Medicaid officials would not provide data on the scope of these problems, but HHS Secretary Michael O. Leavitt said Tuesday that the agency had increased the number of telephone operators that assist pharmacists and had instructed drug plans to cover any drug, whether it is on their formulary or not, for 30 days as poor seniors transition from Medicaid to Medicare. The government has also ordered that no senior be charged more than a $5 co-pay.

Leavitt said seniors could be enrolled in a default plan while at a pharmacy as a last resort.

"This is absolutely one of the fully expected transition problems, and it will resolve itself," said Joe Antos, a health policy expert at the conservative American Enterprise Institute, adding that it probably will take weeks or months, rather than days, to solve the problems.

Enrollment Figures
McClellan and Leavitt said the number of seniors enrolled in the new drug benefit exceeded their expectations. Nearly 24 million seniors are enrolled in Medicare drug coverage, and 6.5 million prescriptions were filled at retail pharmacies in the first 10 days of the program.

"For the majority of people enrolled, the system is working," Leavitt said.

However, data released earlier showed that only about 1 million seniors voluntarily signed up for the new drug benefit. The rest were enrolled through their Medicare Advantage plan, by their employer as part of retiree health care coverage, or through an automatic government enrollment plan for the dual eligibles. New enrollment numbers released Tuesday show that another 2.6 million have voluntarily enrolled, bringing the total to 3.6 million.

Leavitt said HHS is "well on track" to reaching its goal of having 20 million to 30 million enrollees in the first year of the drug benefit.

A New Message to Beneficiaries
HHS officials said an increase in the number of telephone operators to assist pharmacists, along with other tools, mean questions about drug coverage can now be resolved on the spot in the drugstore. "Our message is, 'Don't leave the pharmacy without your drugs,' " Leavitt said.

Despite the tensions so far in drugstores between pharmacists and beneficiaries, both pharmacy lobbies and senior representatives appear content with having that message delivered to Medicare beneficiaries. "We're certainly in favor of that," said AARP spokesman George Kelemen. "Our biggest concern is that no senior be turned down in the pharmacy."

Susan Bishop, director of regulatory affairs with the American Pharmaceutical Association, said she doesn't think pharmacists are opposed to the message. But patients need to understand that "there could be a delay" in resolving coverage questions, she said.

Hill Reaction
But nearly the entire Democratic caucus signed a letter Friday accusing the federal government of mishandling the start of the benefit and demanding immediate answers and solutions to the problems some seniors have faced. Rep. Henry A. Waxman, D-Calif., has scheduled a press briefing Jan. 20 to release new information on "problems with the Medicare program."

Members of Congress could take the opportunity to revisit various parts of the Medicare law, which squeaked through both chambers late in 2003. Conservatives have been upset at the cost of the new entitlement while Democrats have said the benefit does not go far enough to lower drug prices and help poor seniors.

The confusion surrounding the drug benefit's implementation could embolden opponents to go back into the bill and make some changes. That specter no longer carries the threat of derailing the entire benefit, as it did last year when there were calls from conservatives to delay implementation.

Some states and members of Congress are urging CMS to reimburse Medicaid programs directly for restarting drug coverage of the dual eligibles. Sen. Frank R. Lautenberg, D-N.J., said Jan. 10 that he will introduce legislation when the Senate reconvenes requiring CMS to repay states for outlays resulting from "failures" by the Bush administration to properly implement the drug benefit.

Rep. Jeb Bradley, R-N.H., said Jan. 13 that he would introduce legislation giving the federal government the authority to reimburse states for their emergency expenditures to assure continued access to drugs by the duals.

But HHS officials Tuesday gave no indication of favoring that approach, emphasizing new steps they've taken to ensure that drug plans settle up with the states.

Another Katrina?
Officials dodged a question during the press briefing about whether they had received reports of "adverse consequences" such as hospitalizations from beneficiaries losing access to drugs. "It is not acceptable for people to fail to get the medications they need," McClellan responded.

But the American Psychiatric Association (APA) said Jan. 13 that it is "gravely concerned" about the rocky transition from Medicaid to Medicare drug coverage and the harm it is causing. The change "is having a major impact on our patients with severe and persistent mental illnesses," said APA President Dr. Steven S. Sharfstein. "Relapse, rehospitalization, and disruption of essential treatment are some of the consequences of this bureaucratic nightmare."

One reporter asked Leavitt whether CMS is like the Federal Emergency Management Agency following Hurricane Katrina in "not really grasping, in the opening of a crisis, what was happening." Leavitt responded that "our capacity to implement the largest change in Medicare history has been done in a way that is clearly positive, not perfect, but positive."

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Start of Medicare Drug Benefit a 'Fiasco,' Pharmacists and Patients Say

JANUARY 20, 2005 -- Congress hasn't scheduled any hearings on the issue and isn't around anyway, but that didn't keep pharmacists and beneficiaries from heading to Capitol Hill on Friday to relay their frustrations with the rocky start of the Medicare drug benefit.

At a briefing sponsored by California Democrat Rep. Henry A. Waxman, the American Pharmacists Association called the startup "a fiasco." Pharmacists can't go on much longer giving out free drugs and spending hours every day on the phone to determine eligibility, said Tim Tucker, a Huntingdon, Tenn., pharmacist who spoke on behalf of the association.

Beneficiaries relayed their frustration of spending hours on the phone trying in vain to assure drug coverage. "I do not know who is the clone of FEMA Director Michael Brown who botched this job at Medicare, but this is yet another person who should be fired," said Ruth Grunberg of Cortland, N.Y.

Vivian Barrett, a Medicare beneficiary from Lorton, Va., said the CEO of her drug plan "got a whole bunch of money from y'all—for what?" Congress should cut off payments to plans at the end of the month if they don't get seniors their drugs, she lectured Waxman.

But a CMS spokesman, who billed the briefing as a partisan event, said the startup has been smooth for the most part. "While there are some pharmacists who are having problems, there are many pharmacists who are able to access the systems and to make sure people get their prescriptions," said Gary Karr.

"While we are having problems with a few thousand people in a program that's covering 24 million people, we are working very hard to make sure that everyone who has coverage can get it," he said.

Karr added, "It is disappointing to see this level of partisan politics enter the equation."

Pharmacy Woes
Marlene Brantley, a pharmacist in Lafayette, La., said she and her colleagues worked overtime in the aftermath of Hurricane Katrina to ensure that evacuees got their drugs. But that "seemed like a walk in the park because this situation is dire," she said.

The confusion is intensified by the high number of plans and the inability of pharmacists to establish eligibility under various plans. And it's even worse in nursing homes, she said, where residents have been randomly assigned a plan without regard to whether it covers their medications.

Brantley said her small pharmacy has been supplying a local nursing home with drugs without receiving payment, spending thousands of dollars it doesn't expect to recover. Many of the home's residents are eligible for both Medicare and Medicaid—a population in which eligibility has been particularly hard to document in the early days of the drug benefit.

"If we don't see help, I see all of us throwing up our hands and quitting," Brantley said.

The American Society of Consultant Pharmacists is predicting "chaos" in long-term care if problems with the drug benefit aren't quickly fixed. (See related story in this issue.)

But Karr of CMS said the problems in nursing homes aren't widespread. "The expression we are hearing from nursing homes is generally very positive, but that doesn't mean people aren't having problems. Some have prepared very early for the transition and they are having even fewer problems."

Tucker, the American Pharmacists Association representative, recounted similar concerns about the costs of helping Medicare beneficiaries, although he primarily blames prescription drug plans for the early foul-ups.

Recent statements by Medicare officials that "'no one should leave the pharmacy without their medications' are not helpful, particularly when some pharmacies have reported up to $40,000 in outstanding receipts," Tucker said.

Stephen W. Schondelmeyer, a pharmacy professor and researcher at the University of Minnesota, said: "This situation has already caused economic harm to community pharmacies and the longer it continues, the more severe the impact will be."

The Phone Trail
Ruth Grunberg said she took her drug plan's insurance card to the local pharmacy on Jan. 1 and then spent much of the following nine days fruitlessly trying to get her prescriptions filled.

She said she called her drug plan, Medicare, a local newspaper reporter assigned to her story, the local congressman and two U.S. senators, AARP, a Syracuse TV station, the Office of Aging, Families USA, Consumers Union, the Better Business Bureau, the state insurance commissioner's office, the county board of health, and the New York Attorney General's office.

After nine days her card was recognized and all but one of her nine prescriptions were filled. "I learned that insurance companies had the right to change what they covered at any time, but not until February. So the denial was illegal," Grunberg said. "But I still could not reach anyone to solve the problem."

"It dawned on me that if I could not find the solution, what was happening to those more elderly, more confused, or less informed?" Grunberg said that when she called her congressman about the issue, she learned he was in Antarctica. "Perhaps a Congress in session, not in recess, could have been more help to millions of people victimized by their own government."

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States Try Creative Ways to Expand Insurance Coverage

JANUARY 20, 2005 -- States' efforts to cover the uninsured are as varied as their populations, fiscal status, and political environment, according to a new report that tracks state health coverage expansion initiatives.

Nevertheless, "[t]imes are still difficult for states and for coverage in general" and the number of uninsured has not diminished, concludes the 2005 "State of the States" report, which summarizes state activities to expand health coverage in the past year. "The silver lining is that state leaders continue to be creative in finding new opportunities to expand coverage," the study says.

Maryland, for example, passed legislation that required employers to pay their "fair share" of health costs.

Massachusetts is considering an individual mandate and Pennsylvania developed a partnership with Blue Cross insurance plans to fund coverage through the state's "adultBasic" program.

The report is produced by the State Coverage Initiatives program, a national initiative of the Robert Wood Johnson Foundation administered by AcademyHealth.

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