Emergency Drug Supply for Dual Eligibles Approved
Gov. Arnold Schwarzenegger (R) on Friday signed legislation (AB 132) that will provide as much as $150 million to provide prescription drug coverage for state residents who have been unable to obtain medications under the Medicare prescription drug benefit, the Contra Costa Times reports (Fuller, Contra Costa Times, 1/20).
The bill is expected to provide drug coverage for an estimated 200,000 residents who are dually eligible for Medicare and Medi-Cal (Kurtzman, San Jose Mercury News, 1/21).
The bill, by Assembly Speaker Fabian Nuñez (D-Los Angeles), authorizes the Department of Health Services to purchase dual eligibles' prescription drugs for 15 days, retroactive to Jan. 12. Schwarzenegger can extend the coverage for an additional 15 days, if necessary.
To be reimbursed by the state, pharmacies must certify that they were unable to submit a Medicare claim for beneficiaries because they lacked necessary information, that the claim was denied or that a beneficiary's copayment cost more than the $1 to $5 established by Medicare (Richman, Oakland Tribune, 1/21).
Jeff Flick, Medicare's regional administrator in San Francisco, in an interview Friday said that some flaws remain in the system used by pharmacists but that officials are working to address the problems (Weaver Teichert, Sacramento Bee, 1/23).
Although the Medicare drug benefit was expected to save the state $120 million this year, officials estimate that California by fiscal year 2008-2009 could pay $918 million more than if the benefit did not exist, the San Diego Union-Tribune reports.
According to the Union-Tribune, the benefit could cost the state an estimated $59 million this fiscal year, and more money in subsequent years, because of "flaws in the federal funding formula" (Ainsworth, San Diego Union-Tribune, 1/21).
Under the "clawback" provision of the 2003 Medicare law, Medicare will assume the prescription drug costs for state residents dually eligible for Medicare and Medicaid, but states will have to pay the federal government as much as 90% of the estimated amount that they would have spent on Medicaid coverage for medications for dual eligibles; the rate will decrease to 75% over time (California Healthline, 11/4/05).
Health and Human Services Agency Secretary Kim Belshé said projected savings from the benefit have turned into a loss because the federal government is asking the state to contribute too much money to the benefit. She added that the funding formula does not take into account rebates and discounts Medi-Cal was able to negotiate with drug makers.
Belshé said the state would consider a lawsuit against the federal government if the contribution formula is not changed.
In addition, Assembly member Dario Frommer (D-Glendale) said he might introduce legislation to withhold state contributions to the benefit until the funding formula is changed.
Medicare spokesperson Gary Karr said the formula is part of the law and cannot be changed without additional legislation (Ainsworth, San Diego Union-Tribune, 1/21).
In related news, a Webcast of a discussion about the Medicare drug benefit with Belshé is available online at Kaisernetwork.org.
Additional information on the Medicare drug benefit also is available online.