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Medicare Drug Program News
Medicare Tells Seniors What to Do with Payments
Mistakenly Sent by Agency
Some may have to arrange bank transfers or get
repayment plans
 August 29, 2006 – If you are one of the 230,000
senior citizens that received a check to reimburse you for your Medicare
prescription drug plan premiums, you have probably heard you should not
cash the check. It was a $50 million mistake by Medicare. The agency is,
however, sending you a letter telling you what to do with the check.
Unfortunately, most of the checks were direct deposited to the seniors
bank account and these people will have to call Medicare to arrange a
transfer from their bank, or work out a repayment plan. KaiserNet.org
also reports today that the drug plan "doughnut hole" is growing as a
political issue.
 CMS Will Send Repayment Instructions to Medicare
Beneficiaries Who Received Erroneous Checks Reimbursing Drug Benefit
Premiums
CMS this
week will send letters to the more than 230,000 Medicare beneficiaries
who the agency erroneously reimbursed for their Medicare prescription
drug benefit premiums to inform them of their options for repayment to
the federal government, the
AP/San Francisco
Chronicle reports (Freking, AP/San Francisco Chronicle,
8/28).
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CMS Administrator Mark McClellan on Aug. 22
announced that a glitch prompted the agency to erroneously send payments
to the Medicare beneficiaries to reimburse them for nearly $50 million
in premiums.
The affected Medicare beneficiaries also received
letters from the
Social Security
Administration that erroneously said the agency will no
longer deduct their monthly prescription drug benefit premiums from
their Social Security checks.
CMS later sent the affected Medicare beneficiaries
a second letter to inform them of the glitch -- which occurred when the
agency updated SSA about beneficiary information -- and inform them that
they must return the erroneous reimbursements to the federal government.
McClellan said that most of the Medicare
beneficiaries affected by the glitch received the erroneous
reimbursements by direct deposit, although some received checks (Kaiser
Daily Health Policy Report, 8/24). The erroneous
reimbursements averaged $215, although some exceeded $500.
Repayment Options
CMS said that Medicare beneficiaries on Tuesday can
begin to call a toll-free number to receive information about whether
the glitch affected them. According to the letter, to repay the federal
government, affected Medicare beneficiaries can:
● Write "VOID" on the face of the check from the
federal government and mail the check to a P.O. Box address specified in
the letter;
● Mail a personal check or money order made
payable to Medicare with a notation of the their Medicare account
numbers; or
● Call the toll-free number to arrange an
electronic transfer from their bank accounts to the federal government.
In addition, affected Medicare beneficiaries can
call the toll-free number to arrange a monthly installment plan over as
long as seven months to repay the federal government. CMS officials said
that the agency will not call Medicare beneficiaries about the glitch.
CMS officials also said that, to prevent fraud, Medicare beneficiaries
should not provide personal information to callers who claim to offer
assistance with repayment to the federal government.
According to the AP/Chronicle, lawmakers from both
parties "have expressed frustration with the premium reimbursement" and
asked McClellan "for a detailed report on how the error occurred and how
the agency will try not to let it happen again." In addition, some
lawmakers have requested congressional hearings to address the issue.
McClellan said, "We're adding some additional checks on the data before
it goes over" (AP/San Francisco Chronicle, 8/29).
Campaign Issue?
The
AP/Philadelphia
Inquirer on Tuesday examined how the so-called "doughnut
hole" coverage gap in the Medicare prescription drug benefit represents
"a political issue of uncertain impact" in the November election (Espo,
AP/Philadelphia Inquirer, 8/29).
Under the doughnut hole, Medicare beneficiaries are
responsible for 100% of annual prescription drug costs between $2,250
and $5,100. Medicare covers 95% of annual prescription drug costs that
exceed $5,100 (Kaiser
Daily Health Policy Report, 8/7).
According to the AP/Inquirer, the "potential for
political trouble isn't lost on Republicans" because Medicare
beneficiaries "must pay premiums year-round, even if their coverage is
interrupted." Rep. Clay Shaw (R-Fla.), who seeks re-election in
November, said that many Medicare beneficiaries "are going to reach that
doughnut hole right before the elections, which is going to make it hard
to understand."
His opponent, Ron Klein (D), said, "The doughnut
hole is a problem, and it's going to continue to develop as a problem."
However, "there is evidence that the drug benefit may be less of an
issue than Democrats have long hoped," according to the AP/Inquirer.
Recent polls indicate that many Medicare beneficiaries are satisfied
with the prescription drug benefit and that many voters consider the
Iraq war a more important campaign issue (AP/Philadelphia
Inquirer, 8/29).
More Doughnut Hole Coverage
Two other newspapers recently examined issues
related to the doughnut hole. Summaries of the articles appear below.
●
Sacramento Bee:
The Bee on Thursday examined the effects of the doughnut hole on
Medicare beneficiaries in California. Margaret Reilly, program manager
at the state Health Insurance Counseling and Advocacy Program, said that
many Medicare beneficiaries are unaware of the doughnut hole until they
reach the coverage gap (Weaver Teichert, Sacramento Bee, 8/24).
● Portland Press Herald: The Press Herald on
Monday examined the effects of the doughnut hole on Medicare
beneficiaries and pharmacists in Maine. According to the Press Herald,
the doughnut hole "carries political implications ... because millions
of seniors nationwide are expected to lose their access to low-cost
drugs between now and the Nov. 7 election" (Jansen, Portland Press
Herald, 8/28).
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