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'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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