Medicare Rx Errors to Be Refunded

Mechanisms for Reimbursements Still Unclear

Medically Reviewed by Louise Chang, MD on January 26, 2006
From the WebMD Archives

Jan. 26, 2006 -- Low-income seniors who have been forced to pay for medication covered by the new Medicare Part D plan will be reimbursed, government officials and representatives of the insurance industry said Thursday.

Coverage problems have affected an estimated 10% of 6.2 million seniors whose drug coverage switched from the Medicaid health program for the poor to Medicare on Jan. 1. In thousands of cases, those seniors were unable to obtain promised subsidized drug benefits when they went to pharmacies to get medications this month.

Bush administration officials have been working feverishly to solve the problems, most of which arose when health plan computer systems failed to include the records of new beneficiaries. But they have also warned that similar problems are likely to continue as seniors switch plans and records are updated each month.

About 3.5 million seniors previously without drug coverage have signed up for the new benefit this month, according to the federal Centers for Medicare and Medicaid Services (CMS).

The government has already announced a plan to reimburse 22 states and the District of Columbia for emergency costs they paid to cover seniors' drugs amid the confusion.

Now officials also say they'll move to reimburse individual consumers as well, though how the payments will be delivered remains unclear.

Health Plans to Pay

Private health plans carrying the Medicare benefit will start a "paydown" of co-payments that poor seniors were forced to pay when benefits were denied, Karen Ignagni, president of America's Health Insurance Plans, an industry lobbying group, says. Ignagni spoke at a forum on the drug plan sponsored by the Henry J. Kaiser Family Foundation.

Plans could also be held responsible for higher costs, including payments toward deductibles that were supposed to be covered by Medicare but seniors may have paid themselves.

It is not known how much money seniors have paid out of their own pockets for drugs that were supposed to be included in their Medicare plans. In some cases, seniors may have paid for prescriptions, while in other cases, pharmacists may have temporarily provided drugs in the hopes of being reimbursed later.

It remains unclear how insurers will track down all of the payments to pharmacists and individual patients.

Mohit Ghose, spokesman for America's Health Insurance Plans, says insurers were "working with CMS to set up mechanisms" to coordinate the payments.

A Medicare spokesman urged seniors to keep receipts for all costs and to call their drug plan to get reimbursed. "That has to be taken up with the plan," the spokesman says.

Warnings for Future

Poor seniors who once had their drugs covered by Medicaid were automatically switched to Medicare plans starting in January. Vicki Gottlich, an attorney with the Center for Medicare Advocacy, warned that 60% of those seniors are now in plans that don't cover all of their drugs, meaning that most are likely to switch to other available plans in the near future.

"Will they be covered under the new plan? We don't know," Gottlich says. "These are systemic problems that will be ongoing."

Leslie V. Norwalk, the deputy administrator of the CMS, says officials have been working "morning, noon, and night" to iron out the program's early problems.

Barbara Coulter Edwards, the former director of the Ohio Medicaid program, criticized the federal government's planning of the program's launch. She said state officials pleaded with the Bush administration to phase in low-income benefits gradually instead of launching the program on Jan. 1, 2006, a national holiday and a Sunday.

"I hope we've learned some bigger lessons from it as well that we don't want to repeat," she says.

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SOURCES: Karen Ignagni, president, America's Health Insurance Plans. Mohit Ghose, spokesman, AHIP. Centers for Medicare and Medicaid Services. Leslie Norwalk, deputy administrator, CMS. Vicki Gottlich, senior policy attorney, Center for Medicare Advocacy. Barbara Coulter Edwards, former director, Ohio Medicaid.
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