Daily Health Policy Report

(Jan 27, 2006)

CMS Deputy Administrator Leslie Norwalk on Thursday acknowledged problems with the Medicare drug benefit but said the agency is working to address the issues, the Washington Times reports (Higgins, Washington Times, 1/27). Speaking at a Kaiser Family Foundation forum on the drug benefit, Norwalk said there was "some good news and some bad news" about the program.

	Related Stories
	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). Read more... HHS Begins PR Campaign to Explain Medicare Drug Program Problems Jan. 20, 2006 – A public relations campaign targeting senior citizens struggling to get their prescription drugs in the new Medicare Part D kicks off today with Health and Human Services Secretary Mike Leavitt holding a teleconference "to review steps taken to ease Medicare prescription drug coverage for Pennsylvanians." Read more... Read more news on the Medicare Drug Program

"The bad news is there are some glitches in the system," Norwalk said (Carey, CQ HealthBeat, 1/26). Norwalk said most of the problems are the result of problems in the computer system that provides insurers and pharmacists with information from Medicare, adding, "There are at least five sources where information can go wrong."

She said CMS "SWAT teams" have gone to each state to help insurers correct errors. One problem is that information on beneficiaries who changed plans often was not updated in the computer system (Washington Times, 1/27). CMS officials have been working "morning, noon and night" to correct problems, Norwalk said (Zwillich, WebMD Medical News, 1/26). Karen Ignagni, president of America's Health Insurance Plans who also was at the forum, said insurers are working to fix incorrect information on beneficiaries whose information was updated (Washington Times, 1/27).

Dual Eligibles
Forum panelist Barbara Coulter Edwards, former director of the Ohio Medicaid program, said the Bush administration should have done more to ensure a smooth transition for dual eligibles -- individuals eligible for both Medicare and Medicaid whose drug coverage was transferred from Medicaid to Medicare.

Coulter Edwards said problems with coverage for dual eligibles were "predictable and predicted." Coulter Edwards said that CMS has handled the problems well but that more needs to be done to process claims for dual eligibles' prescriptions and to move dual eligibles to drug plans with formularies that cover the drugs they need (Gilcrest, United Press International, 1/26).

Barbara Kennelly, president and CEO of the National Committee to Preserve Social Security and Medicare, said, "We know these problems are going to be addressed. The fact of the matter is they weren't prepared and that was inexcusable." Vicki Gottlich, senior policy attorney for the Center for Medicare Advocacy, said beneficiaries and pharmacists "need a simple system of reimbursement" (CQ HealthBeat, 1/26). Gottlich said 60% of dual eligibles are enrolled in plans that do not cover all of their prescriptions (United Press International, 1/26).

Those whose drugs are not covered under their current plans are likely to switch plans, Gottlich said. "Will they be covered under the new plan? We don't know," she said, adding, "These are systematic problems that will be ongoing" (WebMD Medical News, 1/26).

Debra Garza, director of government and community relations for Walgreen, said pharmacists "are facing a mass of people without Medicare cards" (Washington Times, 1/27). In addition, Garza said, pharmacists are generally the ones who handle confused beneficiaries' questions about the drug benefit. CQ HealthBeat reports that even panelists who were "most critical" of drug benefit's implementation "praised" the work CMS employees have done (CQ HealthBeat, 1/26).

Costs
Norwalk said the average drug plan premium is $5 less than expected. Ignagni said the plans are offering "affordable products," adding, "I'm hearing shock from (state) Medicaid directors that we're getting better prices than they are. I don't know of any other government program where the real costs are less than the estimates." However, Kennelly said beneficiaries who have enrolled in the drug benefit say the program is "expensive, complicated and doesn't meet their needs" (United Press International, 1/26). She added that the current problems with the drug benefit "just the tip of the iceberg. There are fundamental problems behind the legislation and these problems are not going to go away. ... Companies can change the drugs they cover and there is no cost control in this bill. The doughnut hole can become larger" (CQ HealthBeat, 1/26).

A webcast of the forum is available online at kaisernetwork.org.

Letter
In other Medicare news, Senate Minority Leader Harry Reid (D-Nev.) and Sen. Max Baucus (D-Mont.) sent a letter to President Bush on Thursday asking the president to address the drug benefit in his State of the Union address on Jan. 31. Reid and Baucus said Bush should announce steps to correct problems with the benefit -- including ensuring the accuracy of information provided to drug plans and beneficiaries, enforcing certain provisions of the 2003 Medicare law, and requiring drug plans to cover the same drugs for one year (CQ HealthBeat, 1/26).

Nursing Homes
Sen. Charles Schumer (D-N.Y.) on Thursday said he has heard complaints from nursing home operators in New York that they are covering the costs of some medications for beneficiaries or that beneficiaries were going without medications because claims were rejected or delayed by drug plans, Long Island Newsday reports. According to Schumer, HHS Secretary Mike Leavitt seemed "unaware" of some problems with the drug benefit after a Senate Finance Committee meeting on Wednesday. HHS spokesperson Gary Karr said, "We've generally heard that things are going fairly well at nursing homes around the country," but he added the agency would look into the matter. Karr said nursing homes "have had the same billing problems as pharmacies" (Thrush, Long Island Newsday, 1/27).

Intravenous Drugs
The Los Angeles Times on Friday examined how the drug benefit does not include coverage of "supplies that seriously ill patients need to administer intravenous antibiotics and other medications at home." In California, Medicaid covered such supplies for beneficiaries before the drug benefit took effect. Because Medicare does not cover the products, some dual eligibles with chronic conditions are "being referred to nursing homes" or have "to go into hospitals" to have the drugs administered. In addition, some beneficiaries have switched from intravenous antibiotics to oral antibiotics, which can be less effective in treating infections, according to the Times (Alonso-Zaldivar, Los Angeles Times, 1/27).

Additional Print Coverage

• BusinessWeek: The Jan. 30 issue of BusinessWeek examined efforts by Humana to promote Medicare prescription drug plans. According to BusinessWeek, Humana -- which "lags far behind" rivals UnitedHealth Group and WellPoint in terms of members -- "decided on an aggressive push" on the Medicare prescription drug benefit. Humana decided to offer "dirt-cheap drug plans to grab millions of seniors" and use the enrollment as a "stepping stone" to the "potentially richer market" of Medicare managed care plans, according to BusinessWeek (Gleckman, BusinessWeek, 1/30).
   
• Time: The Jan. 30 issue of Time examined how the Medicare prescription drug benefit represents "a significant step in the march of U.S. health care toward a free-market system governed by choice and risk." According to Time, Bush will highlight the "promise" of a market-based health care system in his State of the Union address next week, but "patients, families and pharmacists caught up in Part D know its price, at least in the short term" (Thottam, Time, 1/30).
   
• Washington Post: The Post on Friday examined how several of the largest U.S. pharmaceutical companies have said they will discontinue programs that provide no-cost or discounted medications to low-income elderly and disabled individuals because "they should be covered by the new Medicare drug benefit." The companies have said that a legal opinion issued by the Bush administration indicates they would "run afoul of anti-kickback laws" if they continue the programs, but administration officials have said that the programs can continue, provided that they are separate from Medicare or contribute to charity care funds, the Post reports (Connolly, Washington Post, 1/27).

Broadcast Coverage
NPR's "Morning Edition" on Friday reported on enrollment in the Medicare prescription drug benefit. The segment includes comments from Gottlich; Robert Laszewski, political analyst and health consultant for the insurance industry; Leavitt; Norwalk; and Sen. Ron Wyden (D-Ore.) (Rovner, "Morning Edition," NPR, 1/27).

The complete segment is available online in RealPlayer.

"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.”