Poor Planning Doomed Medicare Drug Plan Launch, Critics Charge

But the agency disagrees, adding that current problems will ease soon

MONDAY, Jan. 23, 2006 (HealthDay News) -- Earlier this month, a Medicaid recipient on four different heart medications was denied coverage for her life-saving prescriptions by her pharmacy in New York City.

Ideally, the woman should have been automatically transitioned from Medicaid-based coverage to Medicare's new drug benefit plan, which launched Jan. 1. Instead, her pharmacist told her he could no longer find any record of her in the system.

Desperate, she contacted the Medicare Rights Center, a nonprofit group that advocates on behalf of seniors and the disabled covered by the plan.

"There's literally hundreds of cases like just this in our office, right now," said Robert Hayes, the group's president.

Contacting Medicare's regional office in lower Manhattan, Hayes struggled to untangle the bureaucratic logjams that are preventing this patient and hundreds like her from getting the drugs they need.

"The response I got was, 'Well, give us their names,' " Hayes said. "But, they had had those names for eight or nine days."

A worker at the center said the outcome of the heart patient's case remains uncertain.

Tens of thousands of Medicare and Medicaid patients across the country have been encountering scenes like these ever since the roll-out of Medicare's Part D drug benefit, which was designed to provide cash-strapped seniors with low-cost medications through link ups with private insurers.

The biggest glitch? "Dual eligibles" -- Medicaid recipients like the woman above who also qualify for the new drug benefit -- were auto-enrolled by the agency into a private Part D plan. But some also went ahead and chose another plan in the run-up to the Jan. 1 deadline. The result? Data regarding their choice of a private plan made it into the system, but information as to their ongoing status as an eligible Medicaid/Medicare recipient did not.

Another problem: Beneficiaries switched to a new plan only to realize that it did not cover a brand-name drug they were taking. Under Part D rules, the new plan was required to cover the drug for a 30-day period, but this didn't always happen.

Scrambling, officials in 20 states passed short-term, emergency measures to pay pharmacists with state funds so that locked-out enrollees could get their drugs. And on Jan. 15, the White House ordered insurers to supply all beneficiaries in need with a 30-day supply of medications, no matter what. That measure might be extended if deemed necessary, federal officials said.

Medicare's critics say it just didn't have to be this way.

"It didn't have to be such a hassle," said Bill Vaughan, a health lobbyist and senior policy analyst at Washington, D.C.-based Consumers Union, which publishes Consumer Reports. He criticized the federal government for what he called its "breathtaking arrogance" in rushing the plan to the public.

Vaughan pointed to a 2004 study from the government's own Medicare Payment Advisory Commission, which found that transferring large numbers of patient files from one large insurer to another can take an average of six months.

"But here you have people in Part D signing up beginning on Nov. 15th for a program that starts Jan. 1 -- with some people even signing up Dec. 31st. And you expect them to get a prescription by January 2nd? It just won't work," Vaughan said.

A Medicare spokesman said that his agency was hamstrung by the law that created Part D. "You have to remember that Congress created the Part D program to begin January 1, 2006," Peter Ashkenaz said from his Washington, D.C. office. "So we put all the contingencies in place to handle as much as we did."

And he added that enrollment in the new plan has been high.

"Enrollment numbers issued earlier this week showed that we've got about 24 million people who are now receiving Part D drug coverage," Ashkenaz said in an interview Friday. "Roughly 20 million of them are receiving them through Part D plans -- stand alone plans, Medicare advantage plans or employer programs. We saw enrollment rise from a million the first couple of weeks to 3.6 million as of the 13th of January."

According to Ashkenaz, the biggest modification of Medicare in its 40-year history was bound to encounter a bump or two, and he said that millions of beneficiaries are getting their drugs just as easily as before.

He also noted that the new system does have a built-in "safety net."

"If a beneficiary is found not to be in a plan, the pharmacist has the ability to sign that 'dual-eligible' up to a plan right there at the counter -- it's a plan offered by Wellpoint, the only national plan that's authorized to receive auto-enrollments from low-income beneficiaries," he said.

Still, Hayes believes more could have been done. He said he personally warned Mark McClellan, Administrator of the federal Centers for Medicare and Medicaid Services, that the launch as planned couldn't go smoothly. Early last year, he said, "I was sitting in McClellan's office and I said, 'Look, even if you get this transition 99 percent right for the people losing Medicaid coverage, you're still going to have 64,000 people without drug coverage come Jan. 1.' And [McClellan] said 'No, we have everything under control.' "

The emergency relief now offered by the states provides beneficiaries with some form of safety net, Hayes said, though it's "a little late, and a little chaotic."

Ashkenaz' response: "Look, we are concerned if even a single beneficiary doesn't get the drugs they need. But we have the fallback system with Wellpoint, and we're working through the data systems to ensure that beneficiaries are able to get those drugs."

Others contend the system could have been designed better. New York City-based "information designer" Leslie Smolan works with big business to smooth out complex logistical bottlenecks.

She blamed the current Medicare problems on the fact that patient information remains split among the agency, doctors, pharmacies and insurance plans -- each with its own computer system and "language."

Better, centralized design that allowed every player in the process to share the same codes, programming and language would have prevented a lot of pain for the public, Smolan said. So would have more "beta testing" of the plan itself. "It's what any business creating any kind of product would do -- make sure it works, then roll it out," she said. "Now, it's just damage control."

But Ashkenaz said most of its partners have worked hard to merge their systems with Medicare's. "I talked to a 500-bed nursing home yesterday that said, 'We began preparing for Part D a year ago. We made sure then that our pharmacy was going to be able to talk to all of the plans.' "

Experts on both sides stressed that most of those who've enrolled have managed to get their medications without a problem, and Vaughan noted that the country has seen these types of first-year jitters during other major program launches.

In 1974, he noted, the federal government merged welfare programs for the aged, disabled and blind into what is now Social Security.

"In the first couple weeks, the system was so screwed up, The New York Times ran pictures of mounted police defending Social Security offices from people throwing bricks at the windows," he said.

"So, we've been here before," Vaughan noted. "This will get better and the system will shake out."

More information

For advice on what to do if you encounter Part D problems, head to the Center for Medicare Advocacy.

SOURCES: Robert Hayes, president, Medicare Rights Center, New York City; Bill Vaughan, senior policy analyst and health lobbyist, Consumers Union, Washington, D.C.; Peter Ashkenaz, spokesman, Medicare, Washington, D.C.; Leslie Smolan, information designer and founder, Carbone Smolan Agency, New York City; Jan. 17, 2006, statement, U.S. Department of Health and Human Services, Washington, D.C.
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