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CMS
Administrator McClellan Says States Assisting Medicare
Beneficiaries With Access to Medications Will Be Reimbursed
Jan. 25, 2006 - The federal
government will reimburse states for expenses they incur by covering
the cost of prescription drugs for Medicare beneficiaries who have
had difficulty obtaining medications under the new drug benefit, the
Bush administration said on Tuesday, the
New York Times reports (Pear, New York Times,
1/25).
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Medicare Drug Program |
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At least 26 states are covering the cost of medications for
beneficiaries dually eligible for Medicare and Medicaid who have
been unable to obtain medications under the drug benefit, according
to a survey released Jan. 18 by the
National Association of State Medicaid Directors (Kaiser
Daily Health Policy Report, 1/20).
CMS Administrator Mark McClellan on Tuesday reiterated a
previously announced plan under which the federal government will
work to ensure that insurers offering Medicare drug plans will
reimburse states that have been covering the costs of drugs.
In
addition, McClellan said, the federal government will reimburse
states for administrative expenditures related to providing the
drugs and for any difference between the amount the state paid for
the drugs and the amount drug plans pay the states (Colliver,
San Francisco Chronicle, 1/25). The administration
is unsure how much the reimbursement program will cost. The program
will continue until Feb. 15, by which point federal officials
"assume that problems ... will be worked out," according to the
Times (New York Times, 1/25).
Comments from
McClellan, Leavitt
McClellan said, "States that work with us to complete the transfer
to (a Medicare drug plan) for their beneficiaries will be
reimbursed." He added, "The states are not going to have to go out
and work with each drug plan on their own" (San Francisco
Chronicle, 1/25). McClellan said the drug plans would pay
"the bulk of costs," with the federal government assisting states in
collecting payments from insurers through a "reconciliation process"
(New York Times, 1/25). He added that the process of
states receiving reimbursements "can start right away," saying, "We
don't need legislation" (Schuler, CQ Today, 1/24).
HHS Secretary Mike Leavitt said the administration "will use the
full array of administrative tools to ensure that the [drug] plans
live up to the terms of their contract." He added, "Further, we
would expect that poor performing plans would likely not be
participating in upcoming years" (Boulton,
Milwaukee Journal Sentinel, 1/24).
Seven-Point Plan
The reimbursement policy was announced as part of a seven-point plan
outlined Tuesday by Leavitt and McClellan to address issues with the
drug benefit (Alonso-Zaldivar,
Los Angles Times, 1/25). The plan calls for an
increased number of customer service personnel at Medicare and at
the drug plans, smoother transmission of patient information to the
drug plans and a stronger surveillance system for monitoring drug
plans' compliance with the drug benefit's rules. Leavitt and
McClellan said they are working to quickly address the issues and
prevent further problems. They are scheduled to meet on Wednesday
with members of the
Senate Finance Committee to discuss the drug benefit (CQ
Today, 1/24).
Reaction From
Senators
Sen. Frank Lautenberg (D-N.J.), co-sponsor of legislation that would
require the federal government to reimburse states, said the policy
announced Tuesday "is simply more red tape from the Bush
administration" and "is no solution." Lautenberg added, "If
anything, today's announcements only makes the problems worse. ...
Now the federal government wants the states to act as its bill
collectors. The burden on the states keeps growing when the federal
government should just do its job and pay back the states
immediately" (Delli Santi,
AP/Philadelphia Inquirer, 1/25).
Sen. Olympia Snowe
(R-Maine) said, "I am pleased that we have assured that Maine and
other states will be compensated for the costs, which they incurred
providing -- without hesitation -- our most vulnerable citizens with
access to their essential medications. I certainly hope that
continued state payments won't be necessary much longer" (CQ
Today, 1/24). According to the New York Times,
Snowe is a co-sponsor of the Lautenberg legislation. Sen. Hillary
Rodham Clinton (D-N.Y.) said the administration's announcement aims
to prevent action by Congress on the issue. Clinton said the
announcement is a sign administration officials "are feeling the
heat, are finally recognizing the crisis they created in the design
and implementation of the new drug benefit." She added, "I am very
skeptical that all the kinks in the new program will be worked out
by Feb. 15" (New York Times, 1/25).
Other
Congressional Action
With many lawmakers concerned about potential problems occurring
later in the year, Snowe has introduced a bill (S
2168) that would extend by six months the May 15 deadline for
beneficiaries to enroll in the drug benefit without penalty. But
Senate Finance Committee Chair Chuck Grassley (R-Iowa) said there is
no need to extend the deadline, adding, "CMS can fix these problems
using its authority under the law and can do it faster than if
Congress comes in and changes the law" (CQ Today,
1/24).
State Action,
Comments
The following summarizes reaction and actions by some states to the
announcement.
- California: The state has spent more than $9
million to pay for more than 100,000 prescriptions over 11 days,
according to the state
Department of Health Services (San Francisco Chronicle,
1/25). California Gov. Arnold Schwarzenegger (R) said the
announcement is "great news," adding, "The federal government is
living up to its responsibility" (New York Times,
1/25). Schwarzenegger added, "This is the right thing to do
because Medicare is a federal program and it is the
responsibility of the federal government not only to fix what is
not working, but also to fully fund it" (San Francisco
Chronicle, 1/25).
- Florida: A "growing chorus of Democrats" are
calling for the state to offer additional assistance to dual
eligibles, according to the AP/Florida Times-Union.
Jonathon Burns, spokesperson for state Health Care Secretary
Alan Levine, said, "Stepping in to pay for copays is not going
to address the underlying problem, and we're interested in a fix
for the real problem" (Royse, AP/Florida Times-Union,
1/25).
- Georgia: Gov. Sonny Perdue (R) on Tuesday said
the state is reserving $6.6 million to pay for prescriptions for
dual eligibles, according to the Atlanta
Journal-Constitution (Miller,
Atlanta Journal-Constitution, 1/25). Shane Hix,
spokesperson for Perdue, said the Georgia officials had been
"concern[ed] initially about the state not being reimbursed by
the federal government if it were to step in" (Corwin,
Augusta Chronicle, 1/24).
- Maryland: The state House Health and
Government Operations Committee held a hearing to address the
drug benefit, with Democrats in the state Legislature calling
for funding to hire additional caseworkers to help beneficiaries
with the program. Paul Gurny, deputy secretary of the state
Department of Health and Mental Hygiene, told the committee
the state designated $2.2 million in December 2005 for dual
eligibles to obtain advance refills and would not take
additional action (Levine/Marimow,
Washington Post, 1/25).
- New Hampshire: Gov. John Lynch (D) said the
Feb. 15 deadline could pose problems. "New Hampshire citizens
are still having problems getting their medications through
Medicare," he said, adding, "The federal government should not
set a deadline until it can prove that everyone who is eligible
can actually get their prescriptions" (New York Times,
1/25).
- New Jersey: Officials "rejected" the
administration's reimbursement plan, saying congressional action
is needed to address problems with the drug benefit, the
Newark Star-Ledger reports (Campbell, Newark
Star-Ledger, 1/25). Gov. John Corzine (D) said New
Jersey is spending $1.3 million daily to provide prescription
drugs to beneficiaries (AP/Philadelphia Inquirer,
1/25). In total, the state has paid about $21.5 million to pay
for 233,000 prescriptions, the Star-Ledger reports.
Corzine said the state set aside $20 million for the transition
of the state's more than 140,000 dual eligibles from Medicaid to
Medicare, but the state "has already eaten through that money"
(Newark Star-Ledger, 1/25). Corzine said, "While
I'm pleased that the administration has finally acknowledged the
existence of this severe problem, the devil is in the details."
He added, "I'm concerned that this is not a real solution to the
problem and will, in fact, create more administrative and
financial burdens for the state" (AP/Philadelphia Inquirer,
1/25).
Assistance
Programs
In other drug benefit news, a coalition of nine organizations
representing about 300 not-for-profit hospitals, health systems and
community health centers sent a letter to 13 pharmaceutical
companies urging them to continue programs that provide no-cost or
reduced-cost prescription drugs to low-income individuals, CQ
HealthBeat reports. Several drug makers have indicated they
plan to end the assistance programs because of concerns about an HHS
Office of the Inspector General guidance advising companies
about anti-inducement laws under the drug benefit. The letter says
that beneficiaries with annual incomes between 150% and 200% of the
federal poverty level "will be responsible for the full cost-sharing
responsibilities, and we fear many may simply be unable to afford
Part D coverage" (Reichard, CQ HealthBeat, 1/24).
Additional Coverage
-
USA Today: USA Today on Wednesday
examined how some health care advocates are expressing concern
that few low income Medicare beneficiaries that have voluntarily
enrolled in the drug benefit have been approved for a low-income
subsidy, USA Today reports (Wolf, USA Today,
1/25).
- Wall Street Journal: The
Journal on Wednesday looked at how the drug benefit has
created a "competitive scramble" among health insurers seeking
to convince beneficiaries to enroll in their plans, the
Wall Street Journal reports (Fuhrmans/Lueck [1],
Wall Street Journal, 1/25).
- Wall Street Journal: The
Journal on Wednesday examined how the government and
Medicare drug plans say "insufficient staffing" is a "key cause"
of problems with the drug benefit (Fuhrmans/Lueck [2],
Wall Street Journal, 1/25).
"Reprinted with
permission from kaisernetwork.org (insert hyperlink to http://www.kaisernetwork.org).
You can view the entire
Kaiser Daily Health Policy Report, search the archives, and sign
up for email delivery at
www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser
Daily Health Policy Report is published for
kaisernetwork.org, a
free service of The Henry J. Kaiser Family Foundation. © 2006
Advisory Board Company and Kaiser Family Foundation. All rights
reserved.”
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