Medicare Drug Plans Should Simplify Choices
CQ HealthBeat on Tuesday examined CMS's new bidding instructions for private health insurers sponsoring Medicare prescription drug plans. CMS issued the "call letters" on Tuesday to instruct insurers on how to develop plans that will be available to beneficiaries in 2007.
In the call letters, which went out to both stand-alone prescription drug plans and managed care plans, CMS said drug plan sponsors should present "clearly understandable" coverage options that beneficiaries can "reasonably" comprehend and use to make comparisons between plans. In addition, CMS said beneficiaries are expressing "distinct preferences" for certain coverage options and that plans should offer alternatives in those coverage areas for beneficiaries to consider.
The agency said sponsors should offer plans that allow beneficiaries to choose between having a deductible or no deductible; coinsurance or copayments; inclusive or limited formularies; a range of premium levels; and coverage or no coverage in the "doughnut hole" coverage gap, under which beneficiaries are responsible for 100% of prescription drug costs if they do not have supplemental coverage.
CMS also said it wants insurers sponsoring stand-alone PDPs to offer no more than two plans.
"In general, we expect that more than two bids from a sponsoring organization would not provide meaningful variation, unless one of the bids is an enhanced alternative plan that provides coverage in the coverage gap," the letter to PDP sponsors said. In the letter to Medicare Advantage Plans, CMS said MA plan sponsors should eliminate plans "that are substantially duplicative in terms of cost sharing, provider networks and benefit design," including prescription drug coverage.
According to the letter, some beneficiaries "are unable to make meaningful distinctions between the various plans offered by a sponsor." CMS also said MA plan sponsors should not market plans as having a "zero premium" for Medicare Part B, which covers physician services and outpatient care.
Plans will be permitted to say in marketing materials that a plan offers a premium rebate for Part B, the agency says. CMS noted that beneficiaries with higher incomes will begin paying higher premiums for MA plans in 2007 but that plans still will be required to offer uniform benefits, so the zero premium claim will not be permitted.
The call letters also address other issues, such as long waits for drug plans' toll-free phone lines. CMS said drug plans' call centers must answer 80% of calls within 30 seconds, and they must limit calls in which a caller on hold hangs up to 5% or less of total calls.
Call centers also must be open whenever pharmacies participating in the PDP's plans are open, even if it is 24 hours a day, CMS said. The agency will issue weekly reports on call center performance.
The call letters also said plans should create a "one-stop" area on their Web sites with information on how beneficiaries can appeal coverage decisions. The letter said CMS also "expects sponsors to develop and maintain information systems that accurately process updated enrollment information at least weekly" (Reichard, CQ HealthBeat, 4/4).
In related news, the Philadelphia Inquirer on Wednesday examined
Independence Blue Cross's plans to change its formulary for Medicare drug plans. The coverage changes, which will take effect June 1, "mark the beginning of a shift that could alter drug plans across the country," the Inquirer reports.
Under the 2003 Medicare law, insurers can add or remove medications from their formularies monthly, while beneficiaries can change plans once annually. Critics of the provision say formulary changes are "potentially troubling" because beneficiaries might lose access to medications they thought were covered under their Medicare plan, according to the Inquirer.
However, Daniel Lyons, senior vice president for government programs at IBC, said the changes -- which will be made to about 22 medications -- will not affect the insurer's existing customers until next year.
"The industry is aware of the concerns raised and we're being sensible and thoughtful," Lyons said, adding, "I think you will find the same type of soft-landing approach with most plans" (Sullivan, Philadelphia Inquirer, 4/5).
In other Medicare news, CMS Administrator Mark McClellan met with church leaders in Detroit last week to promote the drug benefit and urge more preventive care in Medicare, the Detroit News reports. McClellan, who visited Detroit as part of an ongoing nationwide tour that began last June, said changes to Medicare should focus on incentives for physicians to promote preventative care.
"There's $300 billion in Medicare, and most of that money goes to treating complications," McClellan said, adding, "We could be doing so much more if we put just as much emphasis on keeping people well as we do on treating them."
McClellan said Medicare should offer higher reimbursements for lower hospitalization rates and home care that replaces office visits for healthy patients (Terlep, Detroit News, 4/5).
Two newspapers on Wednesday examined also how some independent pharmacists say slow reimbursements from Medicare drug plans are threatening their businesses. Headlines appear below.
- "Anguish at the Drug Counter" (Girion, Los Angeles Times, 4/5).
- "Battling a Middleman: Pharmacy Owner Says the Benefit Management Firms Take Too Big a Cut" (Colliver, San Francisco Chronicle, 4/5).