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Archive for Wednesday, January 25, 2006

Government pledges to reimburse states for Medicare prescriptions

January 25, 2006

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— States will be "fully reimbursed" for hundreds of thousands of emergency prescriptions for seniors who ran into trouble with the new Medicare drug benefit, top federal officials said Tuesday.

The promise was part of a seven-point plan by Health and Human Services Secretary Mike Leavitt to try to resolve the continuing frustration faced by many patients and pharmacists since the benefit took effect three weeks ago.

Leavitt's announcement marked the first time such a senior official publicly acknowledged the need to fix the broad range of problems. It came a week before President Bush is scheduled to deliver his State of the Union message, in which the president, despite the glitches, is expected to hail the benefit as a significant accomplishment and a foundation for market-oriented health care reforms.

Launched Jan. 1, the program offers 43 million Medicare beneficiaries the opportunity to enroll in private insurance plans offering government-subsidized coverage for their outpatient prescriptions. But its complicated design appears to have dampened enthusiasm among seniors, and many low-income beneficiaries who were automatically enrolled in the program have encountered a host of unintended coverage problems, leading some to leave the pharmacy without needed medicines.

Federal and state officials estimate that perhaps 80 percent to 90 percent of seniors have not encountered such problems. But error rates of 10 percent to 20 percent in a program that is supposed to provide critical medications for millions of people are considered unacceptable.

Leavitt also threatened to unleash federal investigators against private drug plans who fail to deliver services required by their contracts with the government, such as providing transitional supplies of medications they did not normally cover.

Critics said Leavitt's response was overdue.

"The secretary is confronting reality finally, and that is a good thing," said Robert Hayes, president of the Medicare Rights Center, a New York-based advocacy group. "We all know consumers were confused, but we had no sense the leadership in the federal government was so confused."

Under the reimbursement plan, the federal government will help states collect from drug plans that were supposed to be taking care of low-income beneficiaries. Washington will also cover the states' administrative costs plus any difference between what pharmacies charged the states and rates the drug plans pay to pharmacies.

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