Judge Bars Recovery of Erroneous Reimbursements
U.S. District Court Judge Henry Kennedy on Thursday issued a preliminary injunction under which CMS cannot collect a total of $50 million from about 230,000 Medicare beneficiaries who received erroneous reimbursements of their prescription drug benefit premiums last month as a result of a computer error, the New York Times reports. The affected Medicare beneficiaries received erroneous reimbursements of $215 on average, although some beneficiaries received as much $800.
CMS had sent a letter to the affected Medicare beneficiaries that instructed them to return the erroneous reimbursements to the federal government by Sept. 30.
Last week, the Gray Panthers and the Action Alliance of Senior Citizens filed a lawsuit that seeks to block the required return of the erroneous reimbursements (Pear, New York Times, 9/29). According to the Center for Medicare Advocacy, which filed the lawsuit on behalf of the Gray Panthers and AASC, federal law allows for waiver of recovery of funds when beneficiaries are not at fault for overpayments (California Healthline, 9/19).
Kennedy ordered CMS Administrator Mark McClellan to send letters immediately to the affected beneficiaries to inform them of their right to request a waiver under federal law. Kennedy said that many of the affected Medicare beneficiaries might qualify for a waiver because repayment of the erroneous reimbursements might cause financial hardship. He added that any erroneous reimbursements returned to the federal government "must be immediately returned to the beneficiaries so that they may decide whether to request waiver."
At the hearing, CMA attorney Gill Deford said that some of the affected Medicare beneficiaries likely have spent the erroneous reimbursements and that the refusal of the Bush administration to inform them of their right to request a waiver violates the Fifth Amendment, as well as federal law. Attorneys for McClellan and HHS Secretary Mike Leavitt said that the affected Medicare beneficiaries do not have a right to request a waiver. HHS attorney Marcus Christ said, "Nothing in the Medicare program allows them to keep that money" (New York Times, 9/29).
After Kennedy issued the injunction, Deford said in a statement, "The judge did the right thing. The courts said 20 years ago that beneficiaries have to be informed of their right to a waiver when they receive an incorrect payment."
CMS spokesperson Peter Ashkenaz said, "Our main goal remains making sure that these beneficiaries continue their drug coverage with the least inconvenience possible, and we intend to continue to do everything possible to achieve that goal" (CQ HealthBeat, 9/28).
The American Medical Association's political action committee on Thursday reported expenditures of $307,125 to the re-election campaign of House Ways and Means Health Subcommittee Chair Nancy Johnson (R-Conn.), who helped draft the 2003 Medicare law, the Washington Post reports. The independent expenditures, made on Wednesday, included $16,000 for polling and $291,000 for media (Pincus, Washington Post, 9/29).
USA Today on Friday examined Medicare prescription drug plan premium levels and coverage options expected for 2007. Average monthly premiums for Medicare prescription drug plans likely will remain at about $24 for 2007.
CMS officials on Friday plan to announce details about Medicare prescription drug plan coverage for 2007.
According to USA Today, more Medicare prescription drug plans will offer coverage during the so-called "doughnut hole," and some plans will offer partial coverage -- such as coverage for generics or some brand-name medication -- during the gap. In addition, some Medicare prescription drug plans might expand their formularies to include certain antihistamines, insomnia medications and other treatments.
Health insurers will begin to market Medicare prescription drug plans next week, and enrollment will begin on Nov. 15. "Despite pleas from Congress to make the program simpler," Medicare beneficiaries "still will face dozens of plans in most states," USA Today reports (Wolf, USA Today, 9/29).