Medicare Prescription Nightmare: Overview January 28, 2006
Many thousands of people could not continue filling even their current prescriptions after the new Medicare Part D (prescription drug coverage) started January 1, 2006. Many thousands are wrongly being told to pay hundreds of dollars, when they are on Medicaid or otherwise approved for Extra Help -- or wrongly told they need prior authorization for antiretrovirals, psychiatric drugs, or certain other medications, when Medicare does not allow the insurance plans to require it. Here is a quick overview of some of the biggest problems.
See the greatly simplified "help is here" pages on the official Medicare site1 (in the "Resources for Help on Medicare Part D" section below). If these work, it suggests that streamlined emergency procedures are being introduced to help people get their medications quickly.
For detailed written information, see the Resources section below, especially.2
If you have trouble reaching a person to answer a question, see note 8 for a list of telephone numbers in all states.
Note: If you are not eligible for Medicare, then none of this article applies to you.
Note: About half of the U.S. states have started paying for emergency coverage (often through people's Medicaid cards -- often called Medical Assistance), hopefully until the federal system gets straightened out.
Note: Save all official paperwork and keep it together. Do not throw anything away -- even if you do not understand it, or have decided not to use it.
Note -- February surprise: "Dual eligible" patients (on both Medicare and Medicaid) who voluntarily chose a Medicare Part D plan were often assigned to a different plan due to the automatic assignment of most dual eligibles. On February 1 Medicare cleaned its database, and many of these people were switched to the plan they had originally chosen. This is good -- except that patients may not have received notification, and their pharmacy may try to charge the wrong plan. Such patients will probably need their card (or at least their number) in the plan they chose. If Medicare Part D prescriptions stop going through at the beginning of February, this possibility should be considered.
The information about the new Medicare Part D program and its problems is changing daily, so note the date of this article above. Check the Web sites in References, below, and check elsewhere, to get the most recent information.
We regret the length and complexity of this article, but the complexity of the system chosen to deliver the new drug benefit is insane. It will live as a monument to madness that millions of people must go to such trouble just to deal with the process of paying for prescription drugs -- and that millions still cannot get the drugs they need and are legally entitled to. So many patients will need expert assistance that there will not be enough experts to go around. We expect to publish shorter, updated articles that will focus on resources and help for getting proper medical care.
Many of the Medicare part D (drug benefit) problems result from errors in computer databases that will have to be corrected case by case -- at the federal government, maybe at state governments, and at the private Medicare Part D plans, so that the pharmacies will get the right eligibility information. Most patients will need help getting the errors in their records fixed, if necessary.
But the improper prior-authorization demands could and should be fixed for everybody at once, in each health plan, without needing case-by-case attention. Some progress has been made, as AIDS and other service and legal organizations repeatedly show the insurance companies running the Part D plans that requiring prior authorization for certain drugs including all antiretrovirals (except Fuzeon when patients start it) is against the federal Medicare policy the companies accepted when they offered their plans, and is probably illegal. But companies have incentive to find excuses to refuse to pay, both to save the cost of the medicines, and more importantly to change their patient mix by driving expensive patients away.
The situation is different in each state and area. For example, each Medicare Part D plan works in particular regions, and with only certain pharmacies in its region. This makes it hard to provide national information, advice, or advocacy.
Many patients are getting their prescriptions filled correctly under the new Medicare program. But many others are not.
California did keep figures, and found that 200,000 out of one million Medicaid recipients (who were automatically enrolled in a Medicare Part D plan starting January 1, 2006) have had problems getting prescriptions filled so far. The true problem could be even greater, as presumably many of the one million had not tried to fill a prescription in early January, and some will not be on prescriptions at all; these must be excluded from the denominator to get a correct error rate.
The failures in starting the new Medicare Part D program could kill more people than Hurricane Katrina, if patients cannot get essential medicines and stop taking them arbitrarily.
Three Main Problems So Far (in January)
The following seem to be the worst problems, because they affect the most people. But there are many others.
Patients who are officially eligible for "Extra Help" are being charged up to hundreds of dollars for prescriptions, when they should be charged no more than $5 per prescription (or 15% of the sale price if their countable income is in the range of 135% to 150% of federal poverty guidelines), because their eligibility for Extra Help is not recognized by the system. See "help is here".1
On Extra Help, one expert told us, "Patients with screwed up enrollments have to repeat forcefully and continually that they are Extra Help patients (in whatever of the 3 categories: under 100% FPL (federal poverty level, or guidelines); 100 to 135% FPL; or 135% to 150% FPL, each time they call, talk to, email, correspond with or fill out a form with SSA (Social Security Administration), CMS (Centers for Medicare and Medicaid Services), the various 800 numbers, state Medicaid offices, state health insurance counseling offices, ADAP offices and workers -- and most especially, with the Part D plans themselves (who are very, very inexperienced with welfare, Medicaid, ADAP, or any poor people's issues and therefore have to have patients' exact extra help status and be reminded repeatedly." If you are on Medicaid, your Medicare Part D plan and your pharmacist may need to know that as well.
Note: most persons on Extra Help pay the same copays for a 30-day or 90-day supply of drugs -- so it helps to get the doctor to write prescriptions for 90-day supplies when appropriate. Many low-income patients are burdened by the copays -- for example, 10 prescriptions at $5 each is an extra $50 a month if the doctor writes 30-day prescriptions -- but two-thirds less ($50 for three months) with 90-day prescriptions.
Other patients are not recognized as in Medicare Part D at all, and are being charged full price for the drugs. They may not know what plan they are in, or have gone to a pharmacy that does not deal with their plan. Or they may have been lost in the computers for some reason. See "help is here"1 and other information in "Resources for Help on Medicare Part D" below. Also, a pharmacist may be able to find your plan by submitting an E1 request to Medicare; for a one-page sheet on how pharmacists can do so, see "help is here",1 and/or see note 6.
Patients are wrongly being told that they need prior authorization for antiretrovirals. This is not allowed, (except for patients starting Fuzeon, the most expensive HIV medicine). See "Prior Authorization Problems" below.
What Is "Extra Help"?
The biggest single problem is that patients who have been federally approved for Extra Help due to their low income and assets (or should automatically get Extra Help due to being in Medicaid or certain other programs), who should only pay $5 or less per prescription (or 15% of the retail price, at the highest eligible income level), do not show up as approved for Extra Help in the computer of their Medicare Part D plan, which is a separate, private company. Therefore they get charged like richer Medicare Part D recipients: the first $250 per year for prescription drugs (the "deductible"), and 25% of the additional prescription-drug expenses until they reach the "donut hole," when they pay full price for prescription drugs until their out-of-pocket expenses for the year reach $3,600 (and not all expenses for prescription drugs count) -- an impossible barrier for poor people, which is the reason for the Extra Help program in the first place. Also, those without Extra Help must pay a monthly premium to stay on the plan, while those on Extra Help pay less, or none at the lowest income level.
Extra Help comes in three different amounts, depending on income and assets -- and everyone on Medicaid, SSI, or a Medicare Savings Program is automatically eligible. Others who meet income and asset requirements, but are not on Medicaid (which often has much lower income and asset requirements) or the other programs, must apply in order to get the Extra Help.
Persons on Extra Help pay the same copays for a 30-day or 90-day supply of drugs -- so it helps to get the doctor to write prescriptions for 90-day supplies when appropriate. This doesn't help the people in the highest-income Extra Help category, who are paying 15% of the sale price, as the 90-day supply is usually three times as expensive as the 30-day. But many low-income patients are burdened by the copays -- for example, 15 prescriptions at $5 each is an extra $75 a month if the doctor writes 30-day prescriptions -- but two-thirds less ($75 for three months) with 90-day prescriptions.
If you have been approved for Extra Help (or are on Medicaid, SSI, or an MSP, which should make Extra Help automatic) and are being charged more than $5 per prescription -- or 15% of the drug price -- see "help is here".1 In case that does not work, the basic strategy is to make sure that your approval is recorded in the federal Medicare database, and then make sure that your part D plan records this information. If you are not on Medicaid but may be eligible for Extra Help, and applied for it but have not heard back, you need to follow up where you applied. You should receive a letter in any case, whether you are approved for Extra Help or not.
And if you did not apply yet for Extra Help, or if you do not qualify, you should read "Does it make a difference if I apply through Social Security or the Medicaid office?" -- currently question #22 of "Resources for Help on Medicare Part D."2 Bizarrely, even if you do not qualify for Extra Help directly, you may still be able to get it indirectly, by qualifying through your state Medicaid office for the Medicare Savings Program. Some states count income and assets differently for this program, or do not count assets at all. So if you do not directly qualify for Extra Help, apply with a Medicaid counselor at your local welfare office for MSP. If you are enrolled in an MSP you automatically qualify for Extra Help.
Extra Help -- and Federal Poverty Guidelines
For information on what the (adjusted) income levels are for the three benefit classes, see www.familiesusa.org/assets/pdfs/ New_drug_bill_benefits_costs_Nov_25_20033e0c.pdf
Note: Always make sure that any documentation is using the new 2006 federal poverty guidelines.
Note: Not all income and assets are counted; see note 2 in "Resources for Help on Medicare Part D" below -- especially section IV, "Can I Get Extra Help Paying the Medicare Drug Benefit if My Income is Low?"
On January 23, 2006 the U.S. Department of Health and Human Services announced the 2006 federal poverty guidelines: in the 48 states and Washington D.C., $9800 yearly ($817 monthly) for one person; add $3400 yearly ($283 monthly) for each additional family member, much more for Alaska and Hawaii. Some people who were not qualified for Extra Help in 2005 due to too much income will be qualified now. Not all income is counted for the Medicare program, so do not give up just because your income looks a little too large. For more information about the Federal poverty guidelines, see http://aspe.hhs.gov/poverty/06poverty.shtml
The federal poverty guidelines are scandalously low, in part because they are based ultimately on prices of cheap food -- while housing, healthcare, and education have become disproportionately more expensive, and are not adequately counted or not counted at all. Therefore the federal poverty guidelines become less realistic each year. For a technical discussion of poverty measurements, see www.census.gov/hhes/poverty/povmeas/papers/orshansky.html
Good News: Many States Temporarily Continued Medicaid Prescriptions for Dual Eligibles
As an emergency response to the Medicare Part D crisis that started January 1, 2006, about half of all U.S. states so far have taken action to pay for prescriptions as a last resort. For people in those states, this can work for the more than seven million "dual eligibles" who are not only on Medicare but were also on Medicaid (sometimes known by another name, such as Medical Assistance in many states, or Medi-Cal in California) -- because pharmacies can bill the states through people's Medicaid cards. Many of these cards (of patients also on Medicare) stopped covering prescriptions on January 1 -- but states that are willing to pay can quickly turn the prescription coverage back on. And since pharmacies have continued to bill through Medicaid for patients on other programs (including children, and welfare mothers), whose Medicaid prescription coverage was never turned off, the Medicaid billing infrastructure still exists in the drugstores.
In practice, this emergency program may only work for patients who already have a Medicaid card -- otherwise it is likely to be logistically impossible, given all the difficulties in the current program. So those eligible for Extra Help but not in Medicaid will need to straighten out the Extra Help enrollment and get in the Medicare Part D plan the patient chooses, as quickly as possible.
These state payments may last only for a short time -- and in half the states so far they are not available at all. So even where the revived Medicaid cards may work for now, the Medicare Part D errors will still need to be fixed, and the patient enrolled in a regular Part D plan.
This good news showed the unexpectedly great political clout for emergency management of the transition problems. About half the states have already taken emergency action to pay a lot of money for a problem they did not know about two weeks before, rather than leave thousands of people without their medicines; the states knew they might or might not be reimbursed, either by the federal government or by suing the health plans. Recently the federal government changed its position and said it would reimburse the states.
Most observers would have predicted that the more likely outcome would be to let people die -- especially since officials could so easily have covered up that choice, by using high-sounding principles and words that accomplish nothing.
No one knows what this unexpected political strength for patients will mean for the future.
Prior Authorization Problems
Health insurance companies use prior authorization to control the cost of expensive drugs, by making sure they are prescribed for medically recognized uses. For drugs like Viagra, or narcotics, that patients may strongly want for non-medical uses, prior authorization can make sense, because it relieves the doctor of having to be the one who says no when patients want drugs for recreational or financial instead of medical reasons. Companies usually require prior authorization for only a handful of drugs (although hundreds of others may be off the formulary and require a cumbersome appeals process for that reason).
The federal Medicare program is requiring that all the new Part D prescription plans cover "'all or substantially all' of the drugs in the antidepressant, antipsychotic, anticonvulsant, anticancer, immunosuppressant and HIV/AIDS categories." "For HIV/AIDS drugs, utilization management tools such as prior authorization and step therapy are generally not employed in widely used, best practice formulary models (except as noted in Attachment I [which allows prior authorization for patients starting Fuzeon]) ... This policy is in place for 2006, the first year of the Medicare drug benefit and a unique year in terms of a large number of beneficiaries transitioning to new formularies. We will reevaluate the formulary guidance for these categories for 2007..."5
Despite this clear rule, there have been widespread complaints that Medicare health plans have demanded prior authorization for antiretrovirals. One major company told AIDS Treatment News it "lifted" this requirement, after questions from media and service organizations -- but later we heard that this company had a stack of paperwork for 4,000 patients waiting for prior authorization for antiretrovirals. Finally the change did get in the computers, so people on that plan can continue getting their antiretrovirals as Federal policy requires. We do not know if those waiting have been notified. And this fix was for one company; there are about a hundred Medicare Part D plans around the country.
Prior authorization for antiretrovirals makes no sense. Nobody takes these drugs for fun. And unless a doctor is grossly incompetent, insurance companies will not be able to improve on the doctor's decisions, due to the complexity of HIV medicine. (Prior authorization for patients starting Fuzeon is less of a concern, since the consensus on when to use it has become fairly clear. And patients do not want Fuzeon anyway unless clearly necessary, since it is harder to use as it must be prepared and injected twice a day.)
It is unconscionable to use prior authorization to create paperwork obstacles in order to avoid paying for people's medicines -- or to drive expensive patients out of the plan. We do not know how widely this is happening, but it may be extensive.
Patients are being hospitalized today due to Medicare Part D problems. Other patients are going off psychiatric drugs and having relapses. No one knows how many have stopped taking some or all of their medicines because they cannot get them.
Why So Many Errors in Databases?
Aside from the bad incentives, simple mistakes entered the system in many ways:
People move, leaving the wrong address in the computers, so they may not get official notices. And many poor people do not get mail reliably at any address.
Some database transactions require the address to identify the person, so they will not find somebody if they have an old address, or an alternate current address such as street vs. PO box. And even the same address can often be written in different ways, so it may seem that the patient is not in the system. Staff can easily make mistakes when an address is sent by telephone or handwritten letter. (Fortunately other transactions use the Medicare number, or other information that is not ambiguous.)
Dual eligibles were often assigned at random to a Part D plan even if they had chosen another -- leaving people not knowing what plan they were in. Dual eligibles can change plans any time -- but this can involve disenrolling in one and getting enrolled correctly in the other. Pennsylvania Health Law Project and Community Legal Services, both in Philadelphia, have filed a class action lawsuit against the U.S. CMS (Centers for Medicare and Medicaid Services), to stop it from allowing private companies to override patients' choices and enroll them in their own HMOs -- or at least to give proper notice, and require the HMOs to give care equal to the plan the patients chose.7
People changing plans need to tell the new plan if they receive Special Help, whether through Medicaid or otherwise. Patients may not know that they need to do this, or they may forget. Dual eligibles are likely to need to change, as the plan assigned at random may not cover critical drugs -- or not have a pharmacy they can get to if they do not have a car.
These Medicare Part D plans are offered by commercial insurance companies, which are usually not familiar with public benefits such as Medicaid. Staff that is already struggling with everything else in the transition is likely to make mistakes.
The new system is so complex that almost nobody understands it yet, making it hard for millions of people to find expert assistance in using it. Probably nobody understands all of the Medicare Part D system, and how it works not only in theory, but also in reality in all health plans, and in all states and regions of the country. The great differences between states and other localities make it difficult to develop general guidance or training.
Patients have other concerns in their lives, and just want to get their prescriptions filled as they were through December 2005. They cannot spend days or weeks researching the processes and paperwork required for doing so.
Many of the clients who most need prescriptions are seriously ill -- bedridden, in pain, depressed, or psychotic. Many are illiterate. Some lost their records due to Katrina or other disasters. Many cannot advocate for themselves, or understand and keep track of official documents -- in a system created with corporate interests at heart, not the interests of patients.
Wrong Doses for Psychiatric Drugs?
Medicare Part D plans (which are run by private insurance companies) are required to cover "all or substantially all" drugs in six categories: antidepressant, antipsychotic, anticonvulsive, anticancer, immunosuppressant, and HIV/AIDS." But the same statement also says that it does not require all doses to be covered5 -- apparently an afterthought, but one creating the proverbial loophole you can drive a truck through. We are hearing of Plan D companies not covering the doses of mental-health drugs that people are using -- which makes sense if the goal is to remove expensive patients from the plan. Physicians should be aware of this problem, or their patients may not be able to fill the prescriptions they write. They might not be able to fill an appropriate prescription in any case.
Comment: Why Did This Happen?
How was the Medicare Part D mess allowed to happen, and why is it so severe. There are several reasons.
In industry, government, or anywhere else, how many huge, complex data-processing projects get finished on time and work acceptably well from the day they start? Not very many. The startup of Medicare Part D is one of the most complicated data-processing projects in history -- involving different Federal databases, at least one database in each of the 50 states, databases in about a hundred private companies that offer the Part D plans, computers in the pharmacies that those plans choose to work with, and millions of individuals whose health care is at stake -- all dealing with complex new laws and rules. All these parties had to learn to work together. And on the absolute deadline of January 1, everything went live, with critical or life-threatening consequences for many thousands of people who depended on it for major ongoing care. No effective backup plan was provided for the possibility that everything would not work perfectly.
When Congress wrote the law creating Part D, Democrats who had always taken the lead on health issues were locked out and had no input. The idea was that Republicans would use their power to take the health issue away from Democrats, and triumphantly take credit for being the party that finally created a prescription-drug benefit.
When patients are denied drugs and as a result are hospitalized at far greater expense than what the drugs would have cost, the insurance plan that made the decision does not pay that expense. Instead it comes out ahead by saving money on the drugs, and also by pushing expensive patients to some other plan. This creates a strong incentive for all plans to race to the bottom, especially since their competitors are doing the same. These insurance companies must watch their reputations -- but if a plan can mislead the press and public and hold on until most of the expensive patients are gone, it will be well positioned to make money.
As has been clear for years in AIDS, health insurance in the U.S. is primarily a cherry-picking business. Companies make their money by one way or another getting rid of expensive patients and keeping only healthy ones that need little medical care. The law may not let them reject patients for prior conditions -- anyone eligible for the federal program, sick or well, can join their plan. But the companies have many other strategies, from driving out the medical specialists expensive patients need, to creating obstacles to getting their medicines. Such ugly tactics, which companies use but do not talk about, will continue to cause serious problems. Yet, as leading economist Paul Krugman points out recently when writing on the success of the U.S. Veterans Administration health system, in Medicare Part D the insurance companies "serve no real function" (Paul Krugman, "Health Care Confidential," New York Times, January 27, 2006). The whole insurance mess was unnecessary.
The larger problem is that corporations, government, and other institutions are too corrupt today to fix themselves. A widespread public consensus might stop the abusive mismanagement of the dominant institutions, but that has not happened yet.
People have not found the right alternatives in which to place and organize their energies. If they did, the whole picture could change.
Resources for Help on Medicare Part D
Here are some starting points for getting help. This list is far from complete, and we expect to publish updated versions.
See the federal Web site, www.medicare.gov -- or call 1-800-MEDICARE. The Centers for Medicare and Medicaid Services (CMS) is in many respects doing a good job, within the limitations it was given by Congress and the constraints of national politics. Note their "help is here" page, www.medicare.gov/help-is-here.asp.
Detailed information about the new Medicare Part D program that started January 1 is at the Medicare Rights Center; see "Medicare Drug Coverage 101; Everything You Need to Know About the New Medicare Prescription Drug Benefit," www.medicarerights.org/101.html.
For a short overview, see Treatment Access Expansion Project, www.taepusa.org. Always check the latest information, but their fact sheets, "The New Medicare Drug Benefit: An HIV/AIDS Enrollment Tool Kit," published October 2005, gives an understandable outline to start with. It was written for organizations that are advising patients.
State ADAP programs are compiling information for each state. You can reach your state's program through www.atdn.org/access/states/. Also check with local AIDS organizations. For example, www.gmhc.org has much information for New York State.
"Why is CMS requiring 'all or substantially all' of the drugs in the antidepressant, antipsychotic, anticonvulsant, anticancer, immunosuppressant and HIV/AIDS categories?" www.cms.hhs.gov/PrescriptionDrugCovContra/ Downloads/FormularyGuidanceAllorSubAll.pdf.
Tips to Help with an Eligibility (E1) Check, National Community Pharmacists Association, www.pharmacistelink.com/Medicarerx/ RxBytes/20060112rxbytes.asp.
For more information on fixing Medicare Part D problems, and also on the class-action lawsuit against CMS, see www.phlp.org.
For questions, information, and guidance, you might be able to get through faster to the State Health Insurance Assistance Program than to Medicare, etc. The numbers for all 50 states, Washington DC, and the U.S. Virgin Islands are listed at www.medicare.gov/contacts/ static/allStateContacts.asp.
Note: Several people including Tom McCormack, Public Benefits Policy Consultant to the Title II Community AIDS National Network (TIICANN), helped AIDS Treatment News research this article. TIICANN, a national nonprofit that advocates for better HIV care and benefits, can be reached at www.tiicann.org.
ISSN # 1052-4207
Copyright 2006 by John S. James. See "Permission to Copy" at: www.aidsnews.org/canhelp/.
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