What Went Wrong And Why: An Analysis
of Drug Benefit’s First Few Weeks

Almost a month into the new Medicare drug benefit, problems still abound. Pharmacists can’t determine if some beneficiaries are covered. Advocates for the elderly and disabled wonder why their clients still aren’t in the system. And government officials are trying to smooth it all out.

Representatives of just about every sector involved in the biggest change in Medicare’s 40-year history gathered at a Kaiser Family Foundation forum Thursday to analyze the first few weeks of the Medicare drug benefit and debate what’s gone right and wrong since Jan. 1.

Even panelists most critical of the drug benefit’s implementation praised employees at the Centers for Medicare and Medicaid Services (CMS), the agency overseeing the drug law (PL 108-173) Congress passed in 2003 . But they still had plenty to say about where things are going wrong and why they need to be fixed ... now.

CMS Deputy Administrator Leslie V. Norwalk kicked off the panel discussion, admitting there was “some good news and some bad news” to report. On the plus side: about 24 million Medicare beneficiaries have drug coverage. “The bad news,” she added, “is there are some glitches in the system.”

Beneficiaries who sign up late in the month may have trouble getting a prescription at the pharmacy counter on the first of the following month, or they might mistakenly be asked to pay a higher deductible or co-payment, Norwalk said.

Karen Ignagni, president and chief executive officer of America’s Health Insurance Plans, said her group’s members “intend to make states whole” for expenses due to glitches in the drug benefit. Thousands of “duals,” Medicaid beneficiaries who also qualify for Medicare and have been shifted to Medicare for their drug coverage, have had problems getting their prescriptions during the drug benefit’s first few weeks. Some states and pharmacies have simply covered the cost with hopes of getting their money back later, and the feds have said they will (See related story, CQ HealthBeat, Jan. 24).

Straightening out the finances won’t be easy, said Barbara Coulter Edwards, who until November headed Ohio’s Medicaid program. “There is a lot of difficult record keeping that has to be reconciled,” a task made tougher by computer systems that may not be able to talk to one another.

Beneficiaries and pharmacists “need a simple system of reimbursement,” said Vicki Gottlich, senior policy attorney for the Center for Medicare Advocacy, Inc.

Much of the fuss with the drug benefit rollout, Edwards said, could have been avoided if CMS had been allowed to phase in the duals over time. “Unfortunately, much of what happened with duals was predictable and predicted,” Edwards said, noting that the first day of the benefit was New Year’s Day, when most physician offices were closed so pharmacies could not call them to check beneficiaries’ information.

Gottlich said field counselors trying to enroll people in the drug benefit “are still very, very frustrated” and that sometimes the information they are transmitting to CMS is not getting into the system, making it tough and maybe impossible for beneficiaries to get their prescriptions. Trying to appeal to an insurer to convince them to cover a drug not on their plan’s formulary is also hard, Gottlich said, because appeal forms are often difficult to find on the plan’s websites.

Barbara B. Kennelly, president and chief executive officer of the National Committee to Preserve Social Security and Medicare, told of one Medicare beneficiary who went to the pharmacy five days in a row but still was unable to obtain a prescription refill and suffered a seizure as a result.

“We know these problems are going to be addressed,” Kennelly said, but she added that CMS could have been better prepared to handle the problems involved with shifting millions of duals from Medicaid to Medicare for their drug coverage. “The fact of the matter is they weren’t prepared and that was inexcusable,” Kennelly said.

The current problems with the drug benefit, Kennelly said, are “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,” Kennelly said.

As officials work through problems with the benefit, pharmacist Debra B. Garza, who is also Walgreen Co.’s director of government and community relations, urged beneficiaries to try to get their prescriptions renewed when they have a day or two left of the medication, instead of waiting until they have none at all. Pharmacists, she said, are bearing the brunt of seniors’ confusion over the new drug law. “It’s the pharmacists people turn to for information,” Garza said.

On Capitol Hill, Democrats continued to press Bush Administration officials to fix implementation problems. In a letter sent Thursday to President Bush, Senate Democratic Leader Harry Reid of Nevada and Sen. Max Baucus, D-Mont., asked Bush to use his Jan. 31 State of the Union address to announce what steps he will take to correct problems with the new benefit.

Reid and Baucus urged the president to take several steps, including ensuring that information provided to plans and beneficiaries is accurate; enforcing requirements of the Medicare drug law on plans offering coverage and requiring health plans to cover the same drugs for a year.