States Cannot Enroll Medicare Beneficiaries in Specific Prescription Drug Plans, Bush Administration Says
The Bush administration, in a memorandum to state officials, has said that states cannot automatically enroll low-income Medicare beneficiaries in specific prescription drug plans when the new prescription drug benefit takes effect in 2006 because the practice would violate "beneficiaries' freedom of choice and undermin[e] competition among insurers," the New York Times reports.
The administration's position conflicts with a recent federal advisory commission recommendation that states should have the ability to automatically enroll low-income Medicare beneficiaries who participate in state prescription drug assistance programs in "one or more preferred prescription drug plans" to help ensure "continuity of care," provided that beneficiaries could select a different plan.
The memo, signed by CMS Deputy Administrator Leslie Norwalk, said state efforts to direct Medicare beneficiaries to specific prescription drug plans are "contrary to Medicare policy goals" and "may violate federal fraud and abuse laws." In addition, the memo said that rebates or incentives states receive from pharmaceutical companies when they enroll Medicare beneficiaries in specific prescription drug plans could amount to illegal kickbacks.
Norwalk said the administration is "particularly concerned" that states could use such rebates or incentives for purposes other than the reduction of prescription drug prices for low-income Medicare beneficiaries. Norwalk also said that automatic enrollment illegally discriminates against some prescription drug plans and could limit their ability to recruit Medicare beneficiaries and obtain discounts from pharmaceutical companies.
Norwalk said that states can help Medicare beneficiaries evaluate the benefits of specific prescription drug plans but cannot "eliminate choice for the low-income subsidy population by steering them into one preferred prescription drug plan."
The administration also has concerns about legislation proposed by some state lawmakers that would allow states to serve as "authorized representatives" for residents enrolled in state prescription drug assistance programs. Under such legislation, states could have the authority to enroll low-income Medicare beneficiaries in specific prescription drug plans.
Thomas Snedden, director of the Pharmaceutical Assistance for the Elderly in Pennsylvania, said, "It would be extremely difficult for the state to coordinate benefits" with all of the prescription drug plans offered to low-income Medicare beneficiaries, adding, "We want to be able to pick a single plan and enroll our people."
Sen. Jon Corzine (D-N.J.) said that the administration position would increase the likelihood that low-income Medicare beneficiaries in New Jersey enrolled in the state prescription drug assistance program would "see a reduction or disruption of the drug coverage they receive" (Pear, New York Times, 4/8).
In other Medicare news, members of the American Medical Association on Tuesday in a briefing announced plans to launch a campaign to inform patients in physician offices about a 4.3% reduction in Medicare reimbursements for physicians scheduled to take effect in 2006, CongressDaily reports. AMA President-elect Edward Hill said that the group opposes the reduction because "Medicare payments already seriously lag behind the increasing cost of providing medical care."
In addition, Hill said that, based on some surveys, the reduction could prompt physicians not to treat Medicare beneficiaries. Hill also said that AMA might consider a system that would link Medicare reimbursements to the quality of care they provide, but he added that the federal government would have to subsidize the cost of the technology required to report such quality information (Rovner, CongressDaily, 4/8).
The Detroit News on Friday examined the scheduled increase in monthly Medicare Part B premiums for 2006 (Wheeler, Detroit News, 4/8). Earlier this month, CMS announced that monthly premiums will increase by an estimated 14% to $89.20 in 2006, in large part because of an unexpected 15% increase in spending on physician visits and other outpatient services in 2004 (California Healthline, 4/1).
John Rother, AARP policy and strategy director, said, "More and more people are going to be really hard-pressed to keep up with their premium and all the other costs involved in health care" (Detroit News, 4/8).