CMS Administrator Asks Medicare Beneficiaries To Wait To Enroll in Prescription Drug Discount Card Program

CMS Administrator Mark McClellan on Wednesday urged Medicare beneficiaries to wait to sign up for the prescription drug discount card program to see if drug prices offered through the program fall in the coming weeks, USA Today reports (Appleby, USA Today, 4/29). As part of the new Medicare law, the discount cards will be available beginning May 3 to all beneficiaries who do not have prescription drug coverage through Medicaid. CMS officials have said the cards could offer savings of about 10% to 25% on beneficiaries' prescription drug costs until the new prescription drug benefit takes effect in 2006. Companies offering the cards can charge an annual enrollment fee of up to $30 and likely will offer savings on at least one drug in each of 209 categories of medicines commonly used by Medicare beneficiaries. HHS in March approved 28 private companies to offer a number of different discount cards to Medicare beneficiaries. Beneficiaries with annual incomes less than $12,569 per year for individuals or $16,862 for couples will be eligible for a $600 annual subsidy for their prescription drug costs and will not have to pay enrollment fees (California Healthline, 4/28). Beginning Thursday, beneficiaries will be able to go to the Medicare Web site or call 1-800-MEDICARE to make card-to-card comparisons of prescription drug prices. By inputting their area of residence, the drugs they take and their income, beneficiaries will be able to see which cards are available, what drugs they cover, as well as prices and annual fees. Beneficiaries also will be able to determine if they qualify for the $600 subsidy. Tim Trysla, a policy adviser to McClellan, said that because card sponsors spent millions of dollars to win CMS' endorsement, they will "have to keep prices low and customer service high" if they "want to recoup that investment" (USA Today, 4/29). McClellan said that another reason beneficiaries should wait to sign up for the cards is that pricing information will be available on Thursday for only 35 of the 72 cards because many sponsors have not yet provided CMS with such information. Information for the rest of the cards is expected to be added by mid-May. In addition, officials still might endorse more cards, according to the Philadelphia Inquirer. CMS spokesperson Peter Ashkenaz said beneficiaries can wait to enroll until later next month without missing out on available discounts (Loyd, Philadelphia Inquirer, 4/29). "I think once this price competition starts, some of the cards that aren't offering prices as competitive as the other cards may want to get their prices down. The main thing for [beneficiaries] to know is they don't have to sign up now," McClellan said.

Calls to the Medicare hotline are "at an all-time high," with more than 112,000 on Monday and 90,000 on Tuesday, according to Long Island Newsday (Barfield Berry/Mackeen, Long Island Newsday, 4/29). Call volume has increased 150% since April 2003, with more than three million calls in the first four months of 2004. Medicare officials estimate that the hotline will receive nearly 13 million phone calls in 2004, up from fewer than six million in 2003. To handle the increased volume, McClellan and HHS Secretary Tommy Thompson announced Wednesday that CMS has more than tripled the number of customer-service representatives available to answer questions about the program. Currently, there are 1,400 representatives available, up from 400 before. "Personalized help in choosing a drug discount card will be a phone call away," Thompson said (HHS release, 4/28).

The launch of the drug-comparison Web site is "the first big-league test for DestinationRx, a little-known company that Medicare hired without competitive bidding to design and run the system," the New York Times reports. Some critics, including Drugstore.com and PillBot.com, which already run drug-comparison Web sites, question why the California-based company was awarded the 18-month, $3 million contract without bidding for it. James Yocum, executive vice president of DestinationRx, which operates an online discount pharmacy service, said the company won the contract because it already had the computer system that Medicare needed. Medicare officials say the contract was awarded without a bidding process because of timing; the new Medicare law was signed in December, and the drug discount card program is scheduled to launch in June. The Times reports that the contract was awarded also in December "during a management gap" at CMS -- after the departure of former CMS administrator Tom Scully and before McClellan's arrival. Drugstore.com says it plans to publish its own comparisons of the Medicare cards and will offer lower discounts. Gregg James, a vice president at PillBot, said his company also will offer prices lower than those available through the Medicare discount program. He questioned "how much money" the government spent to create a drug comparison Web site that "already exists" in the marketplace (Freudenheim, New York Times, 4/29).