Skip to main content

Advanced Search

Advanced Search

Current Filters

Filter your query

Publication Types



May 15, 2006

Washington Health Policy Week in Review Archive dc11b182-2982-4c50-bbe7-cff8b486bcce

Newsletter Article


Drug Benefit Enrollment Numbers Grow Amid Criticism Over Deadline

MAY 10, 2006 -- Democrats continued Wednesday to call for an extension of the May 15 Medicare drug benefit enrollment deadline as Bush administration officials released new enrollment figures and urged beneficiaries to enroll before the deadline.

More than 1 million Medicare beneficiaries enrolled in the prescription drug plan (PL 108-173) between late April and May 6. The new total of beneficiaries in stand-alone prescription drug plans is about 9 million with more than 1 million Medicare beneficiaries in Medicare Advantage plans that offer health and prescription drug benefits, according to new government figures.

When all sources for drug coverage are taken into account, 37 million Medicare beneficiaries now are receiving some form of prescription drug benefit, Health and Human Services Secretary Michael O. Leavitt said in a conference call with reporters.

About 6 million "dual-eligibles"—beneficiaries who qualify for both Medicare and Medicaid but now receive their drug coverage under Medicare as part of the drug benefit—are part of the 37 million, as are about 6 million beneficiaries who already were enrolled in Medicare Advantage plans.

Medicare prescription drug subsidies help pay for drug coverage for about 7 million retirees while federal retirees account for 3.5 million of that 37 million figure. In addition, 5.8 million Medicare beneficiaries have alternative sources of "credible" drug coverage, such as through the Department of Veterans Affairs or through a current employer, according to Centers for Medicare and Medicaid Services calculations.

Critics of the drug benefit took issue with the new figures, saying they present too rosy of a picture of enrollment in the Medicare drug benefit.

"According to the Bush administration's Enron-style accounting, at least 6.5 million people remain without any prescription drug coverage," said Rep. Pete Stark, D-Calif. "But the real number of seniors and people with disabilities lacking comprehensive drug coverage is undoubtedly higher."

Medicare Rights Center President Robert M. Hayes said the administration's enrollment estimates tell only a part of the story. "No amount of exaggeration can disguise two central facts: over 80 percent of impoverished people with Medicare eligible for a comprehensive drug benefit have not enrolled; nearly 51 percent of the people with Medicare who had no drug coverage on Jan. 1 still have no coverage," he said. The center estimates that about 9 million Medicare beneficiaries still lack drug coverage, Hayes said.

In an April 24 letter to CMS Administrator Mark B. McClellan, AARP Chief Executive Officer William D. Novelli urged CMS to eliminate "the cumbersome and unnecessary asset test" that beneficiaries must complete before qualifying for financial assistance available to low-income beneficiaries. The test is used to limit the amount of assets a beneficiary can have and still qualify for low-income assistance.

Novelli wrote that McClellan could use authority granted to CMS as part of the Medicare drug law (PL 108-173) to eliminate questions on the low-income subsidy application form that deal with life insurance and burial expenses, among other items.

McClellan said Wednesday that CMS does not have the authority to make such changes and questioned if they were really necessary. "Most people with limited incomes don't have a life insurance policy or a whole bunch of money set aside for other activities. . . . Most people don't even get to those questions," McClellan said, adding that CMS would continue to evaluate the form.

Meanwhile Wednesday, Democratic leaders and seniors rallied on Capitol Hill to push for an extension of the May 15 Medicare drug plan enrollment deadline.

"The White House botched the implementation of the prescription drug plan and millions have been unable to navigate their way through the confusing sign-up process," said Senate Minority Leader Harry Reid, D-Nev. "It is time for Republicans to put America's seniors first and extend this deadline."

If beneficiaries do not enroll in the drug benefit by May 15 they will pay a lifetime penalty equal to 1 percent of their premium for every month after May 15 that they were eligible for the benefit but not enrolled. The Bush administration has said it does not plan to extend the deadline.

Publication Details

Newsletter Article


Drugmakers Reveal New Moves to Provide Drugs to Low-Income Medicare Enrollees

MAY 10, 2006 -- Eli Lilly announced plans Wednesday to continue distribution of free or low-cost drugs to certain low-income enrollees in the new Medicare drug benefit, reversing an earlier decision to end its giveaway program for all Medicare beneficiaries to avoid running afoul of federal anti-kickback law.

Meanwhile, a Johnson & Johnson official provided new details Wednesday about a "Companion Rx Program" involving at least five big drugmakers to jointly offer low-cost drugs to millions of low-income Medicare beneficiaries once they reach the "doughnut hole" portion of the Medicare drug benefit.

The doughnut hole is the part of the 2003 benefit (PL 108-173) in which Medicare picks up none of the costs of a prescription until yearly out-of-pocket prescription drug outlays grow large enough to trigger "catastrophic" protection in which Medicare pays 95 percent of prescription costs.

The drugmakers revealed their new moves the day before a meeting between drug company executives and Senate Finance Committee members organized by Chairman Charles E. Grassley, R-Iowa, and ranking Democrat Max Baucus of Montana. The meeting aims to pressure drugmakers to continue giveaway programs.

Drug companies have said federal authorities could construe the giveaways as an illegal inducement to beneficiaries to continue seeking brand-name drugs when their prescriptions are no longer subject to coverage gaps in the Medicare drug benefit and Medicare begins picking up the tab. To the extent generic substitutes are available, Medicare loses money on brand-name drug prescriptions.

But an advisory opinion issued April 18 by the Department of Health and Human Services Office of the Inspector General (OIG) to drugmaker Schering-Plough explained how a giveaway program could keep providing drugs to low-income enrollees in the Medicare drug benefit without violating anti-kickback law.

The Schering-Plough program is acceptable, according to the opinion, because it "operates entirely outside" the Medicare prescription drug benefit. Under the Schering-Plough program, Medicare would never pick up the costs of the brand-name drugs involved. The value of drugs received under the program would not count toward the out-of-pocket total needed to trigger catastrophic protection.

That opinion has led companies to change their minds about shutting down the "pharmaceutical assistance programs" for Medicare drug enrollees, said Gayle Goldin, director of community partnerships with Volunteers In Health Care, an organization that tracks pharmaceutical assistance programs for hospitals and doctors that treat the poor.

Goldin said that on the day the advisory opinion was issued, up to 30 of the programs were set to close their doors to Medicare enrollees as of May 15. Now that total has dropped to 24, she said. Most of the 24 are small drug companies, she said.

Lilly announced that its "LillyAnswers" program will continue through the end of the year for certain Medicare beneficiaries. Patients enrolled in the program as of Dec. 31, 2005, who have not yet enrolled in the Medicare drug benefit, are eligible to continue in the program until the end of 2006.

A new "LillyMedicareAnswers" program will continue assistance next year for two Lilly drugs for certain people who have signed up for Medicare drug coverage. The HHS Inspector General must first approve LillyMedicareAnswers, however.

Like the Schering-Plough program, LillyMedicareAnswers would function outside Medicare, with the two drugs—Forteo, an osteoporosis treatment, and Zyprexa, a drug for schizophrenia and bipolar disorder—not counting toward the catastrophic coverage trigger. "Bridge benefits" would be available in some cases this year for the two drugs for LillyAnswers participants enrolling in Part D.

To qualify for LillyMedicareAnswers, a person would have to be enrolled in the Medicare drug benefit and have an income below 200 percent of the federal poverty level. In addition, he or she would have to have been denied extra drug benefits provided to Medicare beneficiaries with incomes at 150 percent or below and meet an assets test.

Goldin said a number of Lilly drugs that are part of LillyAnswers would not be part of the new program, notably the insulin product Humulin and the anti-depressant Prozac.

'Companion Rx'
To provide payment assistance with a broad range of drugs in the doughnut hole, five big drug companies are seeking federal approval for a program they are calling Companion Rx. They've met with the OIG, the Federal Trade Commission, the Centers for Medicare and Medicaid Services, and Senate Finance Committee staffers, said an executive with one of the five companies.

According to the executive, David Martin of Johnson & Johnson Health Care Systems, the program would target 7 million to 9 million Medicare beneficiaries with incomes between 151 percent and 200 percent of the federal poverty line who do not qualify for the low-income subsidy Medicare provides to fund relatively generous drug benefits for those at 150 percent and below.

Once they have reached the doughnut hole, they would pay 35 percent of prescription costs, with the Companion Rx program picking up the other 65 percent. The program would allow access to a wider range of lower-cost drugs than any individual drug company's pharmaceutical assistance program provides.

Martin said the value of the prescriptions would count toward the catastrophic trigger, however. But the program also would include generic versions of the brand name drugs involved. The aim is to get more companies involved in the program, Martin said.

He did not name the four companies other than J&J but said they are members of the Together Rx Access program, which provides low-cost drugs to uninsured Americans under age 65 with incomes below 300 percent of the federal poverty line. Goldin indicated that obtaining federal approval for Companion Rx would be a challenge.

The 35 percent liability for prescription costs would still be a large burden for many beneficiaries, she said. But she added that a program that provides payment assistance in the doughnut hole and also counts toward catastrophic protection would be particularly helpful.

Publication Details

Newsletter Article


Health Care Agenda Falters in Senate

MAY 15, 2006 -- A week designed to showcase the Senate Republican health care agenda ended with no legislation moved, but it did give Democrats a chance to air their grievances on several health issues and Republicans an opportunity to play to their base with White House–backed bills to help doctors and small businesses.

Senate leaders tried to move three measures last week: two that would have limited medical malpractice awards and one intended to provide small businesses with more affordable health insurance. The small-business health bill was blocked from a floor vote after Republicans fell short of the 60 votes required to overcome a filibuster, 55–43. Even so, it was a baby step forward for legislation that had never made it out of committee in previous Congresses.

The Senate spent the bulk of the GOP's designated "health week" debating that bill (S 1955), sponsored by Wyoming Republican Michael B. Enzi, which was intended to make it easier for small employers to band together to buy cheaper health insurance—a goal that would be achieved by allowing insurers to largely sidestep state laws requiring coverage of certain conditions or procedures.

Insurers that offer such plans, however, also would be required to include a plan that mirrors health benefits available to state employees of one of the five most populous states.

Democrats and patient advocacy groups protested the bill, saying it would allow insurers to offer primarily "bare bones" plans that would leave many employees underinsured and without coverage for conditions and procedures, such as some cancer screenings and diabetes care. They also noted that it had the potential to significantly increase insurance premiums for less healthy patients.

As the week went on, Enzi tried to win over some skeptics by tweaking his bill language to reduce the variance allowed between the highest premiums and the lowest premiums an insurer could charge for different groups of employees. But Democrats, who had their own legislative alternative designed to help small businesses, did not budge.

Moderate Republican Olympia J. Snowe of Maine—where more than 90 percent of employers are small businesses—also tried to win the support of some Democrats by proposing an amendment that would have required the health plans to retain coverage mandates that are required by at least 26 states. According to Snowe, mandates that would have been preserved included alcoholism treatment, breast reconstruction, diabetic supplies, mammography, hospital maternity stays, mental health services, and prostate cancer screenings.

But her last-minute tinkering was not enough to win over enough Democrats to move ahead with the bill.

"I introduced an amendment that I believe would have provided the necessary impetus to bring both political parties to the table," Snowe said. "However, we now will not have an opportunity to vote on my bipartisan measure and build the necessary consensus."

Two Democrats—Ben Nelson of Nebraska and Mary L. Landrieu of Louisiana—joined the majority on Enzi's bill. But for the most part, members held the party line.

Supporters of small-business health plans have been working for more than a decade to bring legislation to the Senate floor. Despite the rejection of cloture on Enzi's bill, several lawmakers claimed a victory of sorts because it marked the first time such legislation had ever made it out of committee.

"I'm pleased with the vote we got," Enzi said. "I'm disappointed we didn't get to 60 . . . but this is the first time the Senate has gotten it to a cloture vote."

Eager not to be cast as obstructionists who are unconcerned with the plight of small-business employees, Democrats offered an alternative to Enzi's health insurance plan. Cosponsored by Democrats Richard J. Durbin of Illinois and Blanche Lincoln of Arkansas, their bill (S 2510) would create a Small Employers Health Benefits Program modeled on the Federal Employees Health Benefits Program, allowing small businesses and the self-employed to join a large insurance pool with at least two insurers participating. Sponsors said that would help offset the cost of less healthy patients with premium contributions of healthier ones.

Lincoln has said Enzi's bill would encourage healthier people to buy lower-cost plans with limited benefits, leaving the less healthy in costly, broader plans.

Priority List
As Democrats successfully rebuffed two cornerstones of the Bush administration's health care platform, they assailed Republicans for not acting on a number of health issues that they consider higher priorities.

Democratic senators took to the floor last week to criticize the administration decision's not to extend the May 15 deadline for seniors to sign up for a Medicare prescription drug plan without paying a penalty.

They have charged that the new drug law (PL 108-173) is too complex for seniors to sort through in time, especially after widely reported problems with the drug plans early this year showed that seniors were not getting the coverage they selected because of missing or inaccurate information in pharmacy databases.

The GOP's refusal to include on the "health week" schedule a bill (HR 810) that would expand federal funding for embryonic stem cell research, which passed the House last May, was another target of Democratic ire during debate on Enzi's legislation.

Majority Leader Bill Frist, R-Tenn., made a pledge last fall to bring the House version of the stem cell bill to the Senate floor early this year, but has not scheduled time for it on the increasingly crowded Senate calendar.

Election-Year Tactics
After the failed closure vote on the small-business health insurance plan, both sides worked quickly to turn the outcome into an asset for their parties during an election year.

With the legislative defeat, Frist jumped on the opportunity to cast the Democrats as obstructionists on an issue that is usually associated with the minority party.

"Senate Republicans voted to provide affordable health insurance for millions of uninsured American workers," Frist said. "Senate Democrats should be ashamed of themselves for refusing to allow a vote on this important legislation that would help small businesses offer quality, affordable health coverage to their employees."

Democrats, meanwhile, fought to turn the tables on Republicans, charging them with ignoring the health needs of employees and states' policies.

"The first rule of medicine is to do no harm," said Minority Leader Harry Reid, D-Nev. "But with the one week this year that Republicans in the Senate chose to devote to health care, they chose legislation that would have done real harm to the American people."

Patient advocacy groups had launched one of their most intense lobbying campaigns in years as they worked to defeat Enzi's legislation in the weeks running up to "health week." The coalition of disease advocacy groups and the seniors' lobby AARP placed newspapers ads in states where a Senate vote was considered up for grabs.

The American Cancer Society and the American Diabetes Association were among the most visible opponents, with ads that emphasized the potential treatments that could be lost if Enzi's bill became law.

The Cancer Society said its ad campaign had generated more than 55,000 e-mails to congressional offices.

Publication Details

Newsletter Article


Health Care's Big Spender Trails in Adopting Health IT

May 12, 2006 — A new study says that the United States is up to a dozen years behind other developed nations in adopting health information technology systems. Yet the nation spends two-and-a-half times more per capita on health care than the median country among the 30 nations belonging to the Organization for Economic Cooperation and Development (OECD), the study notes.

The authors stopped short of saying underuse of health IT explains the apparently bloated levels of health spending in the United States. But to the extent the technology saves money, the lack of a national information technology network "could exacerbate the position of the United States relative to countries that are [health IT] leaders," the study said.

Led by Johns Hopkins health policy professor Gerard F. Anderson, the study compares spending patterns for various aspects of health care in addition to health IT. "The higher level of U.S. health spending does not necessarily provide more resources or health care use," it says. "For example, in 2003, the United States had fewer physicians, nurses, and hospital beds per capita than the median OECD country had, and one of the lowest numbers of acute care bed days per capita."

And while the United States adopts some forms of technology more quickly than other industrialized countries, its overall rate of adoption is ultimately similar. Thus the United States had the same number of CT scanners (also known as CAT scans) per million people in 2003 as the median OECD country, and nine other countries had more magnetic resonance imaging scanners, or MRI machines, per capita than the U.S. did, the study says.

Another finding that is perhaps surprising given the nation's reputation for use of sophisticated care: U.S. doctors performed the highest number of kidney transplants per 100,000 people, but were tied for fourth in heart transplants and were third in the number of liver transplants.

The most compelling reason for higher spending in the U.S. was not technology or costly procedures but prices, according to the study. In 2003, the United States "continued to pay much higher prices in three key health care components: physician visits, hospital stays, and pharmaceuticals."

U.S. doctors have been adopting some of the building blocks of health IT, such as computers, personal digital assistants, Internet access, and Web sites, at rates comparable to counterparts abroad. But the United States trails in developing a national program to foster the use of electronic health records, the study says.

Government outlays for health IT totaled $125 million in the United States in 2005, compared with $1 billion in Canada, $1.8 billion in Germany, and $11.5 billion in the United Kingdom. On a per capita basis those outlays computed to 43 cents in the United States compared with $193 in the United Kingdom.

"Many countries have subsidized the application of [health IT] with public funds, on the condition that those systems can interconnect," the study authors said. "The United States has begun to do so in recent years as well; although so far on a much more modest scale."

The United States could shorten the time it takes to implement health IT "if it can learn from these countries' experiences," the study suggests. It cautions, however, that "in all countries, we found no evidence that the savings from these initiatives have been rigorously evaluated."

Publication Details

Newsletter Article


Insurance Mandate Is a Mass. Original But Other States Should Take Note, Official Says

MAY 8, 2006 -- A Massachusetts state official reiterated Monday that his state's new health care coverage mandate could be duplicated but the state had a unique advantage to model the system.

Speaking before a forum hosted by the nonpartisan Alliance for Health Reform, Timothy Murphy, Massachusetts secretary of Health and Human Services, explained the state's new plan and the lessons other states and the federal government could learn from the process.

The law, which was signed on April 12, will require the state's 6.4 million residents—550,000 of whom are uninsured—to obtain health care coverage by July 1, 2007. The law also will subsidize premiums on a sliding scale for people earning below 300 percent of the federal poverty level.

Nationally, nearly 46 million people are uninsured.

Massachusetts started from a better place than most states for near-universal health care, said James Mongan, president and CEO of Partners HealthCare. The state already mandated hospitals to provide emergency care for the uninsured. Also, only 10 percent of Massachusetts residents are uninsured compared with the national average of 15 percent.

"Being a blue state made the legislation possible in Massachusetts," Mongan said.

Edmund Haislemaier, a research fellow at the Heritage Foundation, disagreed, saying the plan was repeatable in other states, regardless of politics. The conservative Heritage Foundation assisted in the development of the plan.

"What the state did was get to the facts and check ideologies at the door," Murphy said.

To gain Republican support, Massachusetts GOP Gov. Mitt Romney cast the idea as based on personal responsibility.

Murphy attributed the state's success in how it changed the framing of the health care debate to focus on the patients or consumers rather than the providers.

"It promotes a culture of insurance and personal responsibility with a keen focus on cost-containment and efficiency strategies," Murphy said.

Universal health care attempts in other states and federally have failed for focusing on products, such as health savings accounts, rather than focusing on a broad overhaul, Haislemaier said. States also should focus first on getting more and better use out of current funding levels before assuming new money is needed. However, Massachusetts again had an advantage by having a larger pool of money for the uninsured before the law.

The law has faced some resistance from Romney, who struck down from the measure key provisions, including one that would implement a fee of $295 per employee for employers with 11 or more full-time workers who do not offer or contribute to workers' health coverage.

The Massachusetts House overturned the vetoes on April 25. The Democratic-controlled Senate followed on May 4 by restoring six of eight sections of the new law that Romney had vetoed, including the business penalty.

Murphy defended the penalty, saying it was a modest penalty and a compromise between Democrats and Republicans.

He acknowledged "heavy lifting" would be required to replicate the system in other states but said the plan could at least change the way people think about the health care problem.

Murphy acknowledged that aspects of a current federal bill (S 1955) could cause Massachusetts to reassess its new health care plan. The legislation by Sen. Michael B. Enzi, R-Wyo., would make it easier for small businesses to band together to offer health insurance, primarily by allowing insurers to sidestep state coverage mandates.

Publication Details

Newsletter Article


Patients May Be Making a Fatal Mistake Ignoring Bypass Ratings, Study Suggests

MAY 12, 2006 -- Patients getting bypass surgery from surgeons or hospitals highly rated on quality performance measures were about half as likely to die as patients who received the surgery from a provider with poor ratings, according to a new study. Even so, there is no evidence indicating patients are using the performance data to select top-performing providers, the study's authors found.

The study published in the May/June edition of the journal Health Affairs looked at quality reporting on bypass surgery in New York and its effect on physicians and patients. It relied on publicly available data from 31 hospitals between 1989 and 2002.

"That patients can so dramatically cut their chances of dying by selecting a top performer says something powerful about how good the reporting system is," said study author Ashish Jha of the Harvard School of Public Health. "But there's no real evidence that patients use the information to pick a better hospital, even though it's free and easy to access."

The study also found that surgeons tied to poor performance were more likely to change their profession. Advocates might see that as a benefit of public reporting on quality, but study co-author Arnold Epstein sounded a note of caution. "If you have the right physicians labeled as poor performers, that's OK," Epstein said in a statement. "But if you have the wrong ones identified, then it is extraordinarily disruptive and can have very unfortunate consequences." The study concludes that the "large impact" on providers "underscores the need for highly accurate reporting" of data.

New York State began publicly reporting coronary artery bypass surgery deaths in 1991, and other states have used the New York program as a model, the authors noted.

Publication Details