Medicare Prescription Nightmare: Overview January 28, 2006
February 2, 2006
Many thousands of people could not continue filling even their current prescriptions after the new Medicare Part D (prescription drug coverage) started January 1, 2006. Many thousands are wrongly being told to pay hundreds of dollars, when they are on Medicaid or otherwise approved for Extra Help -- or wrongly told they need prior authorization for antiretrovirals, psychiatric drugs, or certain other medications, when Medicare does not allow the insurance plans to require it. Here is a quick overview of some of the biggest problems.
See the greatly simplified "help is here" pages on the official Medicare site1 (in the "Resources for Help on Medicare Part D" section below). If these work, it suggests that streamlined emergency procedures are being introduced to help people get their medications quickly.
For detailed written information, see the Resources section below, especially.2
If you have trouble reaching a person to answer a question, see note 8 for a list of telephone numbers in all states.
Note: If you are not eligible for Medicare, then none of this article applies to you.
Note: About half of the U.S. states have started paying for emergency coverage (often through people's Medicaid cards -- often called Medical Assistance), hopefully until the federal system gets straightened out.
Note: Save all official paperwork and keep it together. Do not throw anything away -- even if you do not understand it, or have decided not to use it.
Note -- February surprise: "Dual eligible" patients (on both Medicare and Medicaid) who voluntarily chose a Medicare Part D plan were often assigned to a different plan due to the automatic assignment of most dual eligibles. On February 1 Medicare cleaned its database, and many of these people were switched to the plan they had originally chosen. This is good -- except that patients may not have received notification, and their pharmacy may try to charge the wrong plan. Such patients will probably need their card (or at least their number) in the plan they chose. If Medicare Part D prescriptions stop going through at the beginning of February, this possibility should be considered.
The information about the new Medicare Part D program and its problems is changing daily, so note the date of this article above. Check the Web sites in References, below, and check elsewhere, to get the most recent information.
We regret the length and complexity of this article, but the complexity of the system chosen to deliver the new drug benefit is insane. It will live as a monument to madness that millions of people must go to such trouble just to deal with the process of paying for prescription drugs -- and that millions still cannot get the drugs they need and are legally entitled to. So many patients will need expert assistance that there will not be enough experts to go around. We expect to publish shorter, updated articles that will focus on resources and help for getting proper medical care.
OverviewMany of the Medicare part D (drug benefit) problems result from errors in computer databases that will have to be corrected case by case -- at the federal government, maybe at state governments, and at the private Medicare Part D plans, so that the pharmacies will get the right eligibility information. Most patients will need help getting the errors in their records fixed, if necessary.
But the improper prior-authorization demands could and should be fixed for everybody at once, in each health plan, without needing case-by-case attention. Some progress has been made, as AIDS and other service and legal organizations repeatedly show the insurance companies running the Part D plans that requiring prior authorization for certain drugs including all antiretrovirals (except Fuzeon when patients start it) is against the federal Medicare policy the companies accepted when they offered their plans, and is probably illegal. But companies have incentive to find excuses to refuse to pay, both to save the cost of the medicines, and more importantly to change their patient mix by driving expensive patients away.
The situation is different in each state and area. For example, each Medicare Part D plan works in particular regions, and with only certain pharmacies in its region. This makes it hard to provide national information, advice, or advocacy.
Many patients are getting their prescriptions filled correctly under the new Medicare program. But many others are not.
California did keep figures, and found that 200,000 out of one million Medicaid recipients (who were automatically enrolled in a Medicare Part D plan starting January 1, 2006) have had problems getting prescriptions filled so far. The true problem could be even greater, as presumably many of the one million had not tried to fill a prescription in early January, and some will not be on prescriptions at all; these must be excluded from the denominator to get a correct error rate.
The failures in starting the new Medicare Part D program could kill more people than Hurricane Katrina, if patients cannot get essential medicines and stop taking them arbitrarily.
Three Main Problems So Far (in January)The following seem to be the worst problems, because they affect the most people. But there are many others.
What Is "Extra Help"?The biggest single problem is that patients who have been federally approved for Extra Help due to their low income and assets (or should automatically get Extra Help due to being in Medicaid or certain other programs), who should only pay $5 or less per prescription (or 15% of the retail price, at the highest eligible income level), do not show up as approved for Extra Help in the computer of their Medicare Part D plan, which is a separate, private company. Therefore they get charged like richer Medicare Part D recipients: the first $250 per year for prescription drugs (the "deductible"), and 25% of the additional prescription-drug expenses until they reach the "donut hole," when they pay full price for prescription drugs until their out-of-pocket expenses for the year reach $3,600 (and not all expenses for prescription drugs count) -- an impossible barrier for poor people, which is the reason for the Extra Help program in the first place. Also, those without Extra Help must pay a monthly premium to stay on the plan, while those on Extra Help pay less, or none at the lowest income level.
Extra Help comes in three different amounts, depending on income and assets -- and everyone on Medicaid, SSI, or a Medicare Savings Program is automatically eligible. Others who meet income and asset requirements, but are not on Medicaid (which often has much lower income and asset requirements) or the other programs, must apply in order to get the Extra Help.
Persons on Extra Help pay the same copays for a 30-day or 90-day supply of drugs -- so it helps to get the doctor to write prescriptions for 90-day supplies when appropriate. This doesn't help the people in the highest-income Extra Help category, who are paying 15% of the sale price, as the 90-day supply is usually three times as expensive as the 30-day. But many low-income patients are burdened by the copays -- for example, 15 prescriptions at $5 each is an extra $75 a month if the doctor writes 30-day prescriptions -- but two-thirds less ($75 for three months) with 90-day prescriptions.
If you have been approved for Extra Help (or are on Medicaid, SSI, or an MSP, which should make Extra Help automatic) and are being charged more than $5 per prescription -- or 15% of the drug price -- see "help is here".1 In case that does not work, the basic strategy is to make sure that your approval is recorded in the federal Medicare database, and then make sure that your part D plan records this information. If you are not on Medicaid but may be eligible for Extra Help, and applied for it but have not heard back, you need to follow up where you applied. You should receive a letter in any case, whether you are approved for Extra Help or not.
And if you did not apply yet for Extra Help, or if you do not qualify, you should read "Does it make a difference if I apply through Social Security or the Medicaid office?" -- currently question #22 of "Resources for Help on Medicare Part D."2 Bizarrely, even if you do not qualify for Extra Help directly, you may still be able to get it indirectly, by qualifying through your state Medicaid office for the Medicare Savings Program. Some states count income and assets differently for this program, or do not count assets at all. So if you do not directly qualify for Extra Help, apply with a Medicaid counselor at your local welfare office for MSP. If you are enrolled in an MSP you automatically qualify for Extra Help.
Extra Help -- and Federal Poverty GuidelinesFor information on what the (adjusted) income levels are for the three benefit classes, see www.familiesusa.org/assets/pdfs/ New_drug_bill_benefits_costs_Nov_25_20033e0c.pdf
Note: Always make sure that any documentation is using the new 2006 federal poverty guidelines.
Note: Not all income and assets are counted; see note 2 in "Resources for Help on Medicare Part D" below -- especially section IV, "Can I Get Extra Help Paying the Medicare Drug Benefit if My Income is Low?"
On January 23, 2006 the U.S. Department of Health and Human Services announced the 2006 federal poverty guidelines: in the 48 states and Washington D.C., $9800 yearly ($817 monthly) for one person; add $3400 yearly ($283 monthly) for each additional family member, much more for Alaska and Hawaii. Some people who were not qualified for Extra Help in 2005 due to too much income will be qualified now. Not all income is counted for the Medicare program, so do not give up just because your income looks a little too large. For more information about the Federal poverty guidelines, see http://aspe.hhs.gov/poverty/06poverty.shtml
The federal poverty guidelines are scandalously low, in part because they are based ultimately on prices of cheap food -- while housing, healthcare, and education have become disproportionately more expensive, and are not adequately counted or not counted at all. Therefore the federal poverty guidelines become less realistic each year. For a technical discussion of poverty measurements, see www.census.gov/hhes/poverty/povmeas/papers/orshansky.html
Good News: Many States Temporarily Continued Medicaid Prescriptions for Dual EligiblesAs an emergency response to the Medicare Part D crisis that started January 1, 2006, about half of all U.S. states so far have taken action to pay for prescriptions as a last resort. For people in those states, this can work for the more than seven million "dual eligibles" who are not only on Medicare but were also on Medicaid (sometimes known by another name, such as Medical Assistance in many states, or Medi-Cal in California) -- because pharmacies can bill the states through people's Medicaid cards. Many of these cards (of patients also on Medicare) stopped covering prescriptions on January 1 -- but states that are willing to pay can quickly turn the prescription coverage back on. And since pharmacies have continued to bill through Medicaid for patients on other programs (including children, and welfare mothers), whose Medicaid prescription coverage was never turned off, the Medicaid billing infrastructure still exists in the drugstores.
In practice, this emergency program may only work for patients who already have a Medicaid card -- otherwise it is likely to be logistically impossible, given all the difficulties in the current program. So those eligible for Extra Help but not in Medicaid will need to straighten out the Extra Help enrollment and get in the Medicare Part D plan the patient chooses, as quickly as possible.
These state payments may last only for a short time -- and in half the states so far they are not available at all. So even where the revived Medicaid cards may work for now, the Medicare Part D errors will still need to be fixed, and the patient enrolled in a regular Part D plan.
This good news showed the unexpectedly great political clout for emergency management of the transition problems. About half the states have already taken emergency action to pay a lot of money for a problem they did not know about two weeks before, rather than leave thousands of people without their medicines; the states knew they might or might not be reimbursed, either by the federal government or by suing the health plans. Recently the federal government changed its position and said it would reimburse the states.
Most observers would have predicted that the more likely outcome would be to let people die -- especially since officials could so easily have covered up that choice, by using high-sounding principles and words that accomplish nothing.
No one knows what this unexpected political strength for patients will mean for the future.
Prior Authorization ProblemsHealth insurance companies use prior authorization to control the cost of expensive drugs, by making sure they are prescribed for medically recognized uses. For drugs like Viagra, or narcotics, that patients may strongly want for non-medical uses, prior authorization can make sense, because it relieves the doctor of having to be the one who says no when patients want drugs for recreational or financial instead of medical reasons. Companies usually require prior authorization for only a handful of drugs (although hundreds of others may be off the formulary and require a cumbersome appeals process for that reason).
The federal Medicare program is requiring that all the new Part D prescription plans cover "'all or substantially all' of the drugs in the antidepressant, antipsychotic, anticonvulsant, anticancer, immunosuppressant and HIV/AIDS categories." "For HIV/AIDS drugs, utilization management tools such as prior authorization and step therapy are generally not employed in widely used, best practice formulary models (except as noted in Attachment I [which allows prior authorization for patients starting Fuzeon]) ... This policy is in place for 2006, the first year of the Medicare drug benefit and a unique year in terms of a large number of beneficiaries transitioning to new formularies. We will reevaluate the formulary guidance for these categories for 2007..."5
Despite this clear rule, there have been widespread complaints that Medicare health plans have demanded prior authorization for antiretrovirals. One major company told AIDS Treatment News it "lifted" this requirement, after questions from media and service organizations -- but later we heard that this company had a stack of paperwork for 4,000 patients waiting for prior authorization for antiretrovirals. Finally the change did get in the computers, so people on that plan can continue getting their antiretrovirals as Federal policy requires. We do not know if those waiting have been notified. And this fix was for one company; there are about a hundred Medicare Part D plans around the country.
Prior authorization for antiretrovirals makes no sense. Nobody takes these drugs for fun. And unless a doctor is grossly incompetent, insurance companies will not be able to improve on the doctor's decisions, due to the complexity of HIV medicine. (Prior authorization for patients starting Fuzeon is less of a concern, since the consensus on when to use it has become fairly clear. And patients do not want Fuzeon anyway unless clearly necessary, since it is harder to use as it must be prepared and injected twice a day.)
It is unconscionable to use prior authorization to create paperwork obstacles in order to avoid paying for people's medicines -- or to drive expensive patients out of the plan. We do not know how widely this is happening, but it may be extensive.
Patients are being hospitalized today due to Medicare Part D problems. Other patients are going off psychiatric drugs and having relapses. No one knows how many have stopped taking some or all of their medicines because they cannot get them.
Why So Many Errors in Databases?Aside from the bad incentives, simple mistakes entered the system in many ways:
Wrong Doses for Psychiatric Drugs?Medicare Part D plans (which are run by private insurance companies) are required to cover "all or substantially all" drugs in six categories: antidepressant, antipsychotic, anticonvulsive, anticancer, immunosuppressant, and HIV/AIDS." But the same statement also says that it does not require all doses to be covered5 -- apparently an afterthought, but one creating the proverbial loophole you can drive a truck through. We are hearing of Plan D companies not covering the doses of mental-health drugs that people are using -- which makes sense if the goal is to remove expensive patients from the plan. Physicians should be aware of this problem, or their patients may not be able to fill the prescriptions they write. They might not be able to fill an appropriate prescription in any case.
Comment: Why Did This Happen?How was the Medicare Part D mess allowed to happen, and why is it so severe. There are several reasons.
As has been clear for years in AIDS, health insurance in the U.S. is primarily a cherry-picking business. Companies make their money by one way or another getting rid of expensive patients and keeping only healthy ones that need little medical care. The law may not let them reject patients for prior conditions -- anyone eligible for the federal program, sick or well, can join their plan. But the companies have many other strategies, from driving out the medical specialists expensive patients need, to creating obstacles to getting their medicines. Such ugly tactics, which companies use but do not talk about, will continue to cause serious problems. Yet, as leading economist Paul Krugman points out recently when writing on the success of the U.S. Veterans Administration health system, in Medicare Part D the insurance companies "serve no real function" (Paul Krugman, "Health Care Confidential," New York Times, January 27, 2006). The whole insurance mess was unnecessary.
The larger problem is that corporations, government, and other institutions are too corrupt today to fix themselves. A widespread public consensus might stop the abusive mismanagement of the dominant institutions, but that has not happened yet.
People have not found the right alternatives in which to place and organize their energies. If they did, the whole picture could change.
Resources for Help on Medicare Part DHere are some starting points for getting help. This list is far from complete, and we expect to publish updated versions.
Note: Several people including Tom McCormack, Public Benefits Policy Consultant to the Title II Community AIDS National Network (TIICANN), helped AIDS Treatment News research this article. TIICANN, a national nonprofit that advocates for better HIV care and benefits, can be reached at www.tiicann.org.
Copyright 2006 by John S. James. See "Permission to Copy" at: www.aidsnews.org/canhelp/.
Copyright 2006 by John S. James. See "Permission to Copy" at: www.aidsnews.org/canhelp/.
This article was provided by AIDS Treatment News. It is a part of the publication AIDS Treatment News.