States Criticize ‘Clawback’ Provision Payments Under Medicare Prescription Drug Benefit
The Bush administration on Monday informed states about the amount that they must pay the federal government under the "clawback" provision in the new Medicare prescription drug benefit, the New York Times reports (Pear, New York Times, 10/18). Under the clawback provision, Medicare will assume the prescription drug costs for state residents dually eligible for Medicare and Medicaid, but states will have to pay the federal government as much as 90% of the estimated amount that they would have spent on Medicaid coverage for medications for dual eligibles; the rate will decrease to 75% over time (California Healthline, 8/17).
The Bush administration used a formula that considers per capita prescription drug costs for dual eligibles to calculate the amount each state must pay. The Congressional Budget Office estimates that state contributions will total $6 billion in the current fiscal year and $124 billion from 2006 to 2015. Some states -- such as Arizona, Arkansas, California, Michigan, Mississippi, New Mexico and South Carolina -- will have to pay an average of less than $220 monthly per dual eligible. Other states -- such as Alaska, Connecticut, Florida, Idaho, New Jersey, Ohio and Pennsylvania -- will have to pay an average of more than $300 monthly per dual eligible.
Many state officials have said they will lose money under the clawback provision. They "immediately took issue with the calculations, saying federal officials had overstated the amounts owed by some states," the Times reports. The Bush administration assumed per capita prescription drug spending would increase by 35% between 2003 and 2006, but some states estimated lower spending levels because of measures implemented to reduce costs.
Paul Reinhart, director of the Michigan Medicaid program, said that he expected prescription drug spending for the program to increase by 15% between 2003 and 2006. Connecticut Medicaid Director David Parella, said, "There's room for disagreement with the calculations. We're not really happy, but we accept the number we've been given." Parella said that Connecticut will have to pay the federal government $10.6 million monthly for about 68,000 dual eligibles.
Some states, such as Texas, "are openly resisting" the amount of payments required under the clawback provision, the Times reports. Federal officials said that they will deduct the funds from payments to the states for other programs in the event states do not comply (New York Times, 10/18).
In related news, CMS on Monday launched two new tools on the Medicare Web site to help beneficiaries select prescription drug plans, the Miami Herald reports (Hatcher, Miami Herald, 10/18). CMS had planned to launch the tools on Oct. 13, but the Bush administration delayed the launch because of the Jewish holiday Yom Kippur, which occurred on the same day (California Healthline, 10/14).
One of the tools is the Medicare Prescription Drug Finder Plan (Miami Herald, 10/18). Currently, the tool allows Medicare beneficiaries to compare deductibles, copayments and monthly premiums available under each prescription drug plan (Campbell, Newark Star-Ledger, 10/18). CMS will add other information, such as data on prescription drug prices available under each plan, "well before" the enrollment period begins on Nov. 15, agency Administrator Mark McClellan said (Lueck, Wall Street Journal, 10/18). The tool also does not include information about the current prescription drug coverage of beneficiaries; CMS officials said that employers and unions have until the end of October to submit the data (Colliver, San Francisco Chronicle, 10/18).
CMS will update the information in the tool over time, agency officials said (CQ HealthBeat , 10/17). McClellan said that the full launch of the tool will occur after the agency completes personal records for all Medicare beneficiaries. He added, "Right now (the Web site's) main use is for training and familiarity purposes for those who work with beneficiaries. It's not yet time to use the tool to make your decision" (Miami Herald, 10/18). McClellan said, "These tools will all be available and complete well before anyone needs to make a decision" (San Francisco Chronicle, 10/18).
The other tool launched on Monday provides information about which Medicare prescription drug plans are offered in different counties. The information includes the names of the plans, monthly premiums, annual deductibles, copays, gaps in coverage and data on mail-order services (Lipman, Atlanta Journal-Constitution, 10/18).
Some consumer advocates who tested the tools said that they were difficult to use. Volunteers at Senior Action Network in San Francisco said that the tools will confuse seniors who are not familiar with the Internet or computers (San Francisco Chronicle, 10/18).
Gail Shearer, a policy analyst at Consumers Union, said, "It's tough to use, even for advocates" (New York Times, 10/18).
Bill Vaughn, also a policy analyst with Consumers Union, said, "All of the different volunteers need to roll up their sleeves and get ready for some massive education" (Miami Herald, 10/18).
In related news, the Wall Street Journal on Tuesday examined how government and "consumer watchdogs are bracing for the marketing scams likely to spring up" during the launch of the Medicare prescription drug benefit. The article examines different forms of potential fraud, the response of law enforcement officials and expectations for beneficiaries. The article also includes advice to help seniors protect themselves from fraud (Greene, Wall Street Journal, 10/18).
In other Medicare news, a group of medical organizations and transplant advocates on Monday hosted an event in Washington, D.C., to lobby for passage of a bill that would expand Medicare coverage for immunosuppressive medications. Currently, Medicare beneficiaries qualify for three years of coverage for immunosuppressive medications, but some transplant recipients must take such treatments for the rest of their lives. Bills introduced by Sen. Mike DeWine (R-Ohio) and Rep. Dave Camp (R-Mich.), S 173 and HR 2051, respectively, would extend Medicare coverage for immunosuppressive medications for kidney transplant patients with end-stage renal disease.
Under the legislation, Medicare beneficiaries would pay the "full Part B premium that would cover their immunosuppressive drugs, but not other Part B services, such physician visits and lab services," CQ HealthBeat reports. Supporters maintain that the legislation could save Medicare $36.5 million annually because kidney transplant patients would remain healthy longer (CQ HealthBeat , 10/17).
Additional information on the Medicare drug benefit is available online.