Settlement Aims To Ensure Low-Cost Rx Drugs for Dual Eligibles

On Thursday, CMS officials announced a settlement in a class-action lawsuit that will ensure Medicaid beneficiaries can continue purchasing prescription drugs at minimal cost when they become eligible for Medicare, the New York Times reports (Pear, New York Times, 6/20).

The lawsuit was filed by the National Senior Citizens Law Center and the Center for Medicare Advocacy in the U.S. District Court in San Francisco on behalf of 6.2 million Medicaid beneficiaries who say they were overcharged for drugs or turned away from pharmacies because they had not been immediately enrolled for subsidized Medicare prescription drug coverage due to processing delays. The suit was certified as class-action in January 2007 (Young, The Hill, 6/19).

The 2003 Medicare law states that people enrolled in both Medicare and Medicaid are to receive additional assistance purchasing prescription drugs.

For beneficiaries eligible for Medicare and Medicaid, the copayment for a generic drug is as low as $1.05 and $3.10 for a brand-name drug, but beneficiaries were charged as must as $35 to $75 or more because evidence of their low-income status was not properly shared by government agencies, insurers and pharmacies, according to the Times (New York Times, 6/20).

Kevin Prindiville, an attorney for the plaintiffs, said that the delays have shortened since the Medicare prescription drug benefit took effect in 2006. However, Prindiville said that the average wait time currently is five to six weeks before the tens of thousands of Medicaid beneficiaries who transfer to Medicare each month can begin receiving prescription drug benefits.

Under the settlement, approved by Judge Thelton Henderson of the Federal District Court in California, the government will change its computer system and allow states to submit names of new low-income Medicare beneficiaries more than once a month. Federal officials will be required to process these submissions within one day (Egelko, San Francisco Chronicle, 6/20).

Private insurers that offer Medicare drug plans also must provide drugs at minimal costs for any low-income Medicare beneficiaries who prove they qualify for additional assistance. In addition, if a beneficiary claims eligibility but does not have proper documentation, or is about to run out of a medication, federal officials would immediately contact the state Medicaid agency to confirm his or her eligibility.

Prindiville said, "This settlement agreement is a victory for many of the nation's most vulnerable citizens, who have faced life-threatening delays in obtaining vital medications."

CMS spokesperson Jeff Nelligan said agency officials have "worked tirelessly" to ensure all Medicare beneficiaries can fill prescriptions, but he refused to comment on the settlement (New York Times, 6/20).

Gil Deford, the director of litigation for the Center for Medicare Advocacy, said, "As a result of the settlement, it will now be easier for the poorest beneficiaries to navigate Medicare Part D" (The Hill, 6/19).