Report Finds ‘Serious’ Problems in Medicare Drug Discount Card Program
There were "serious, widespread problems" in the Medicare prescription drug discount card program launched last year, including "inaccurate and incomplete information ... and improper use of the discount cards" to purchase drugs not covered under the program, a Government Accountability Office report released in October says, the New York Times reports.
The drug discount card program, intended to provide temporary drug coverage to Medicare beneficiaries until the Medicare drug benefit begins Jan. 1, 2006, enrolled 6.4 million beneficiaries, including 1.9 million low-income beneficiaries, who qualified for additional financial help. The Bush administration projected the cards would reduce prescription drug costs for beneficiaries by 10% to 25%. However, the GAO report finds that officials could not document the savings because of a "lack of reliable data" on the price reductions obtained from pharmaceutical companies and pharmacies.
The GAO report also found:
- Information about the cards that CMS posted online often was inaccurate, and many pharmacies listed as participating in the program did not.
- Insurers and pharmacy benefit managers often violated federal rules by disseminating "incomplete, inaccurate information about their own Medicare-approved discount cards," the Times reports.
- Enrollment in the program was lower than expected because of "confusion and misperceptions about the drug cards," the report says.
- Sponsors of 15 cards subjected to financial audits improperly used Medicare funding to pay for barbiturates and other medications they were not allowed to cover. Total incorrect payments reached $1.3 million.
- Sponsors of five drug cards allowed beneficiaries to obtain subsidies that were higher than the maximum of $600 per year.
- Operators of a telephone help line demonstrated "confusion about the enrollment fees" charged by different cards, according to the report (Pear, New York Times, 12/1).
- CMS provided inadequate guidance to drug card sponsors because of the six-month time constraint in which the program was implemented, and although the agency addressed some of the problems, the overall quality of guidance "remained questionable" as of August 2005, the report says.
- Some beneficiaries complained of delays in receiving drug cards.
- CMS took 23 actions for noncompliance against 15 drug card sponsors in warning letters or corrective action plans.
A second GAO report issued Nov. 18 says that CMS effectively raised awareness among the public about the drug card program but failed to provide "clear, accurate and accessible" information to educate beneficiaries, CQ HealthBeat reports. The report also finds that beneficiaries were confused about the new drug cards, which might have resulted in lower-than-expected enrollment, and did not have clear access to information about their options.
CMS faced challenges in addressing the needs of low-income beneficiaries and those who did not speak English, the report says, according to CQ HealthBeat.
Rep. Henry Waxman (D-Calif.), who requested the GAO research, said the reports indicate "serious flaws" in the implementation of the drug card program. In a letter to CMS Administrator Mark McClellan, Waxman said the errors "have important implications for the new Medicare drug benefit" (CQ HealthBeat, 11/30). "Continued lax oversight and enforcement will serve neither seniors nor the taxpayers," Waxman said, adding that there are "fundamental similarities" between the drug card program and the full drug benefit. Like the drug card program, the full benefit "requires seniors to choose a private plan from among dozens of choices, relies on private entities to negotiate drug savings and uses a complicated Web site to help seniors make their choices," he said.
According to the Times, McClellan defended the drug card program and said it had produced significant savings for beneficiaries. He said, "[W]e have learned many valuable lessons" that CMS will apply to the new drug benefit.
McClellan also said CMS will try to recover the funding that was improperly spent on drugs not approved under the program but noted that the "inappropriate payments represent only a tiny fraction" of total spending under the program (New York Times, 12/1). McClellan also noted that the November report "did not create the full picture of the depth and breadth of the actual activities undertaken" by CMS to educate beneficiaries about the drug card program (CQ HealthBeat, 11/30).
The October report is available online.
The November report also is available online. Note: You must have Adobe Acrobat Reader to view the reports.
Additional information about the Medicare drug benefit also is available online.