Medicare Drug Coverage Has Growing Pains in California

The new prescription drug benefit under Medicare is off to a rocky start in California, particularly for the one million state residents who are dually eligible for Medi-Cal and Medicare.

Dual eligibles on Jan. 1 were automatically enrolled in a Medicare prescription drug plan, and mass confusion erupted when coverage shifted from Medi-Cal to Medicare. Records were missing, people didn’t know to which plans they had been assigned, the plans didn’t have proper records of who had been enrolled, people who should have been charged only small copayments were told they had to spend hundreds of dollars for medications, and other problems emerged as the benefit was launched.

The new benefit, the biggest expansion of Medicare since its creation in 1965, is expected to cost taxpayers about $700 billion over the next 10 years and will pay for about 25% of the total spending on prescription drugs for Medicare beneficiaries.

In December 2005, the 24 Health Insurance Counseling and Advocacy Programs that provide free information to Medicare beneficiaries in California were receiving about 5,000 calls a day. Then the volume of telephone traffic exploded. After Jan. 1, some agencies had a 1,000% increase in their calls from dual eligibles and their family members who were unable to get the medicines they needed.

In Orange County, calls were running at 200 a day when the new benefit began on Jan. 1 and had leveled off at about 100 a day by the first week in February, according to Cheryl Meronk, HICAP program manager at the county’s Council on Aging.

Many people “still do not know what drug plan they have been assigned to,” she said, or are being charged incorrect copays. Or they have enrolled in one plan on their own, but are getting mailings from another plan where the federal government’s computers had assigned them automatically. Many people with cognitive impairment “are just now realizing what is happening, as they have just made their first trip of the year to their pharmacy or doctor,” Meronk said.

State Intervention, Federal Response

Gov. Arnold Schwarzenegger (R) and the Legislature last month intervened with emergency help, providing as much as $150 million in state funding to fill the prescriptions while federal officials worked to solve problems with the system. The governor earlier this month signed a second bill giving him the authority to extend the emergency coverage in 30-day increments until May 16. The current extension runs through March 17.

Under the law, the state will pay for drugs for dual eligibles if a pharmacy has been unable to get payment from a Part D plan. The state becomes the payer if:

  • The pharmacy has submitted a claim to the drug plan where the beneficiary was automatically assigned and has been denied payments;
  • The pharmacy cannot submit a claim because it doesn’t have accurate information about the plan where the Medicare beneficiary was assigned; or
  • The individual’s drug plan is asking for a deductible, or for a copay higher than $1 for a generic drug or $5 for a brand-name prescription.

By Feb. 8, the state had paid for almost 279,000 prescriptions.

Meanwhile, CMS has added hundreds of operators to its telephone system to answer questions from confused beneficiaries, their family members and pharmacists.

Jack Cheevers, spokesman for CMS western region, said, “The turbulence of the early part of year has seemed to smooth out,” and the program is filling about 40,000 prescriptions an hour, nationally.

Language, Formulary Problems

On top of the complexity of the new system, the situation has offered special obstacles for people who are not fluent in English.

Marta Erismann — community outreach coordinator for California Health Advocates, the umbrella organization for the Medicare counseling agencies around the state — told a state legislative hearing that she personally had handled 300 calls from Spanish-speaking people. “Many said their plans did not have bilingual telephone representatives, or if they did, the number of bilingual staff was limited and unable to respond to the demand. Many told me that they were put on hold for many hours waiting for the Spanish-speaking counselor, only to be disconnected after waiting for an hour or more.”

Another problem facing Medicare beneficiaries is that the Part D plans’ use of formularies — lists of approved drugs — that can be more restrictive than Medi-Cal. The new drug plans have different levels of copays for different drugs, and some medications may be excluded entirely.

In Washington, D.C., HHS Secretary Mike Leavitt has ordered plans to provide 90 days worth of medications to dual eligibles at no cost. The move is intended to “provide more time for beneficiaries to find out if they can save by using other drugs that work in a very similar way and cost significantly less,” according to an HHS statement.

But the HICAP advocates in California say the calls they are getting from dual eligibles demonstrate that the message from Levitt hasn’t yet filtered down to the health insurers and the drugstores.

According to Aileen Harper, executive director of the Center for HealthCare Rights in Los Angeles, patients trying to fill a prescription often are “told that it is not on the drug plan formulary and that they must pay full price if they want the drug.” She added, “They are not being offered any transition coverage or given any information about the need to file an exception request.”

“Unfortunately though, very few pharmacists or health care providers either know about or are able to use the transition plans to obtain medications,” said Jeanne Finberg, directing attorney at the National Senior Citizens Law Center in Oakland. “Rather, pharmacists are using the state back-up system and billing Medi-Cal, or are providing temporary refills, hoping to be reimbursed later.”

Patient advocates in California report they still face a heavy work load because dual eligibles are among the most vulnerable of all Medicare beneficiaries because they have low incomes and are more likely to have serious physical or mental conditions.

According to Finberg, “[D]espite a huge increase in phone lines and in people answering phones, a myriad of problems exists for the dual eligibles. System-wide resolution of all of the issues does not appear to be close at hand.”

More Info on the Web:

California HealthCare Foundation’s Online Resource Center

California Health Advocates

CalMedicare.org

Medicare.gov

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