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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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