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Medicare Drug Program News
Democrats to Offer Legislation for Medicare to
Negotiate Drug Prices
GOP wants faster payments to druggists, doctors
unhappy with formularies
June 27, 2006 – Democrats say they will introduce
legislation today to allow Medicare to negotiate drug prices – a move
most say can save millions of dollars for the prescription drug program.
At the same time, Republicans in Congress are trying to press for faster
payments for pharmacies by the drug plans and doctors are complaining
about the drug formularies, according to KaiserNet.org.
 Group of Democrats to
Introduce Legislation Overhauling Medicare Drug Benefit
Congressional Democrats on Tuesday plan to announce
a proposal to alter the Medicare prescription drug benefit to allow the
federal government to negotiate drug prices with pharmaceutical
companies and to let beneficiaries choose a drug plan administered by
the federal government rather than by a private insurer, the
AP/Seattle Post-Intelligencer reports.
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Related Stories |
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Medicare Part D Drug Prices Jumped 3.7% in Last Five
Months
Now 46% higher than prices negotiated by Department of Veteran Affairs
 June 21, 2006 - Over the past five months,
virtually all Medicare (Part D) plans raised their prices for the top
drugs prescribed to senior citizens, according to a report issued
yesterday by the health consumer organization Families USA. The report,
based on pricing data submitted by the plans to the federal government,
contradicts the Bush Administration's assertions that the new Medicare
drug program is effectively moderating rising drug costs, according to
Families USA.
Read more...
Read more
on
Medicare Drug Program |
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Under the proposal, money saved through negotiated
drug prices would be used to eliminate the drug benefit's so-called
"doughnut hole," the gap in coverage under which beneficiaries are
responsible for 100% of drug costs between $2,250 and $5,100.
House Minority Leader Nancy Pelosi (D-Calif.) said,
"Democrats fought against Social Security privatization, and we are now
working to fix the flaws in the Republican prescription drug program."
CMS Administrator Mark McClellan disputed Democrats' assertion that
the federal government could negotiate lower prices than private plans,
citing a 2005 memo from CMS actuary Richard Foster that states, "We
believe that direct price negotiation by the secretary would be unlikely
to achieve prescription drug discounts of greater magnitude than those
negotiated by Medicare prescription drug plans responding to competitive
forces" (Freking,
AP/Seattle Post-Intelligencer, 6/26).
Pharmacists
In related news, CMS will not consider a recommendation from 41 House
Republicans that the agency enact new requirements that would ensure
Medicare drug plans and pharmacy benefit managers promptly pay
pharmacies for prescription claims, according to Larry Kocot, senior
adviser to McClellan,
The
Hill reports.
Last week, the Republicans sent a letter to CMS
asking that the agency require plans and PBMs to pay claims within 14
days and to offer electronic payments. Groups representing independent
pharmacists have complained that payments from PBMs -- which operate
under CMS-approved contracts with pharmacies -- are too slow for
community pharmacists to cover their expenses.
The pharmacists have called for passage of
legislation (S
2563/HR
5182) that would require plans to offer electronic payments and to
provide payment within 14 days. Kocot said on Monday, "We would feel
hard-pressed to come in and dictate what exactly the terms should be" in
the contracts between the PBMs and pharmacies.
He added that a recent CMS
analysis shows that most claims already are paid within 14 days. He
said the analysis considers the payment schedules required by PBMs'
contracts, rather than actual claims data.
"The reason we did this is to get a baseline,"
Kocot said, adding, "Once we have that baseline, it becomes a matter of
enforcement." He said that complaints from pharmacies have "tapered off
considerably" and that CMS has "basically remedied every complaint we've
received."
Some lawmakers have criticized the CMS analysis
because it does not examine claims data and does not include information
from pharmacists. Becky Ruby, communication director for Rep. Phil
Gingrey (R-Ga.) -- one of the lawmakers who signed last week's letter --
said, "The best way to judge the wait times may not be to ask the
plans." Ruby said the complaints are not from "just one or two community
pharmacies," adding, "It is across the board."
Legislation
An additional 10 co-sponsors joined in support for the House bill last
week, bringing the total number of co-sponsors to 127. The Senate bill
has 20 co-sponsors. If CMS were to act to require prompt payments,
"Congress could avoid wading into a politically divisive debate over
Medicare Part D in its inaugural year,"
The
Hill reports. "The Republican leadership has been
reluctant to attempt to give Democrats a platform for a wider debate
about the controversial Part D program," according to
The
Hill (Young,
The
Hill, 6/27).
Many Doctors Critical of Health Plans'
Prescription Drug Formularies
The
Boston Globe on Sunday examined how prescription drug
formularies established by health insurers have received criticism from
many doctors, who "say they are facing increasingly high hurdles in
their attempts to prescribe drugs."
Under formularies, health insurers cover a limited
number of medications for specific conditions and may restrict the
amount of medication covered monthly.
Physicians in some cases can obtain "prior
authorization" for medications not included in formularies, "but doctors
and patients say winning prior authorization is complicated and
time-consuming," the
Globe
reports.
Blue Cross and Blue Shield of Massachusetts spokesperson Chris
Murphy said that the company takes no longer than two days to review
prior authorization requests and that physicians can use a special
telephone line to expedite reviews.
John McDonough, executive director of
Health Care for All, said that formularies are "a two-edged sword."
He added, "On the one hand, there has been a significant taming of the
rate of increase of drug costs. At the same time, it is important that
it be done in a way that doesn't discourage people from getting the
necessary care they need" (Rowland,
Boston Globe, 6/25).
"Reprinted with
permission from 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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