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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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