Part D: Rx for Disaster

by Terri Emerick
12 May 2006

In June, 2003, President Bush stated:

Seniors have waited too long for more choices and better benefits, including prescription drug coverage, similar to the kind now enjoyed by federal employees and members of the Congress. I will continue working closely with Congress during conference to make improvements and pass meaningful Medicare reform.

That did not happen. That same year, Congress enacted the Medicare Prescription Drug, Improvement, and Modernization Act, Pub. L. 108-173 (hereafter referred to as Part D). President Bush signed it into law on December 8, 2003. Although it was not to take effect until January 1, 2006, Part D was implemented without any of the “meaningful” reforms or adequate information technology.

The following is partial documentation of the aftermath.

Technical Problems

During the enrollment period for Part D, there was confusion about which prescriptions would be covered by the enormous number of plans from which an enrollee could choose. Variations in implementation from state to state exacerbated the confusion. In addition, some claimed that both the intricacies of choosing a plan and the transition of medical information “overwhelmed the government computers.”

One of the reasons given for this was the fact that there was no beta testing of the actual computer application/system prior to the transition from Medicaid to Part D. A New York City-based expert in logistical management of large collections of information, Leslie Smolan, contends that the problems that resulted are due to:

... the fact that patient information remains split among the agency, doctors, pharmacies and insurance plans -- each with its own computer system and "language."

Better, centralized design that allowed every player in the process to share the same codes, programming and language would have prevented a lot of pain for the public, Smolan said.

Another factor that was not considered was the fact that, as a 2004 study from the Medicare Payment Advisory Commission discovered — transferring large numbers of patient files from one large insurer to another can take approximately six months [.pdf]. However, the enrollment period for Part D began on November 15, 2005, and the program was to be implemented and operational by January 1, 2006, roughly six weeks. The required file transfer window was inexplicably dismissed.

Additionally, enrollment was made extremely difficult for the populations that were thought to benefit the most by Part D, that is, senior citizens and people with disabilities. Those who did call (800) MEDICARE were told to go online to determine which of the plans offered covered all of their prescriptions:

A poll released...[in November]...by the Kaiser Family Foundation showed that only 6 percent of responding seniors have ever looked at www.medicare.gov.

That same Kaiser survey further discovered that senior citizens did not perceive computer use and internet access as being a necessary part of their lifestyle, as only 24% had ever gone on-line. For some, this was due to physical limitations. For others, the costs of a computer, necessary software, internet connection, and, lack of exposure to regular home computer use contributed to this perception.

Another complication of enrollment for those who received Social Security Supplemental Security Income was the classification as being “dual-eligible.” Prior to January 1, 2006, their prescription costs were paid by Medicaid. After January 1, 2006, Part D replaced the Medicaid prescription coverage. These people were automatically assigned to a Part D plan without any evaluation of their necessary prescriptions.

Enrollment problems were compounded by the difficulties in the design and use of the Medicare.gov website.

Timothy O'Brien of O'Reilly Network noted on the On Java blog:

...when Leslie Norwalk, Deputy Administrator, Centers for Medicare
and Medicaid Services spoke to CSPAN on November 29th on Washington Journal, the segment included a live web demonstration of the web site enrollment process. ...the site errored out after the third or fourth step, and the CSPAN host quickly had to move on to other topics. ...the screen switched to a view of a web browser, the host then set up the segment as an attempt to demonstrate how easy it was to sign up for the Part D drug plan online. Ms. Norwalk proceeded to describe the first step of the process of typing in a zipcode and selecting a prescription drug plan from the list of plans available in your specific area.

When she clicked to continue to the next step, the browser (presumably IE) displayed an error message one frequently encounters when an application server returns an internal server error or a HTTP 500 code. She continued to fumble with the system for a few seconds, and the host chose to quickly move on to another topic. In other words, they set up a segment about the ease of signing up through the web site, the web site failed, and they moved on to other important topics.

Apparently, the assumption was made that an internet-dependent social program would be the way to reach a large segment of the population. Yet, it appears from the personal reports below, this assumption led to actual hospitalizations as some were surprised by the higher costs for their prescriptions too late to find relief elsewhere.

Falling Through The Cracks

There have been numerous news reports from around the country of patients falling through the cracks. San Francisco Chronicle reported:

Sacramento resident Randi Sanford, 50, who has cystic fibrosis, had to go without the antibiotic infusions she needed to fight an infection because the new Part D prescription drug benefit would not cover the procedure when administered at home.

And

Patricia Franks, 69, of Gerber in Tehama County had to borrow blood pressure medication from a brother-in-law after her pharmacist refused to fill her prescriptions.

And

San Francisco’s Johnny Wilson, 49, who is HIV-positive, had his medication only because he had laid in a three-month supply before the new program started. By the time he got his Medicare drug card, he was down to his last pills.

Confusion still permeates the interpretations of the regulations and the application of them to people who have had organ transplants. Transplant patients are now in life-threatening situations, as they cannot afford medicine under Part D.

Crystal Bell received a kidney transplant in 2003. Her costs were supposed to be paid by Part D. However, her costs have now doubled, as Part D doesn’t cover 50-percent of the cost for the drugs she is taking after her kidney transplant:

Ms. Bell stated during an interview on WTSP - Tampa Bay’s 10 News - Tampa / St. Petersburg “...its either rent or medicine...and I choose medicine...I could have been the person next door to you, or your daughter’s friend in high school, and now look at me, I’m just trying to get by...I’m not going to give up, you can’t kill me.”

After calling Medicare, Ms. Bell was told that the problem should be fixed in 30-60 days. Her response? “I don’t have thirty to sixty days.”

Another incident reported in the San Francisco Chronicle story tells us:

John Slack, 66, went to Kaiser Permanente’s hospital in San Rafael earlier this month to pick up nine prescriptions, including medications to fight rejection from a liver transplant. But the pharmacist told him he couldn’t get his drugs because he had been switched to a different health plan.

Confusion Abounds

As written in the Chicago Tribune,

Frank Cartalino, a transplant patient, was distraught. No one could tell him why his pharmacy had suddenly billed him $500 for the drugs he needs to stay alive.

...Cartalino had a letter saying the program had changed and he needed to get the medications through a Medicare drug plan. But the plan was refusing to pay the bill.

Cartalino called Medicare’s national hot line repeatedly. He called an insurance company working with the Illinois program. He called Humana Inc., his Medicare drug plan. He called drug companies, begging to get on their financial assistance programs. No one, it seemed, was able to help.

Tired of getting the runaround, and in need of his life-saving medications, Frank Cartalino called the Chicago Tribune. It took the Tribune a few days and repeated phone calls to determine what the problem was. Both Medicare B and Part D cover prescriptions—Medicare B, in limited instances, specifically covers prescriptions administered in doctors' offices and nursing homes. However, if Medicare B covers a prescription, Part D coverage is not allowed, as a means of preventing double billing.

Patients, customer service representatives and pharmacies are unsure of which plan pays for what prescription. In fact, the Illinois Comprehensive Health Insurance Plan (ICHIP) sent out misleading/incorrect information to Medicare recipients last year. ICHIP informed members that it would stop paying for all prescription drugs. People were encouraged to sign up with a Part D plan to obtain prescription coverage. The ICHIP letters did not state that it would still pay for a limited set of drugs under Medicare Part B.

After receiving the letter from ICHIP, Cartalino researched Part D plans and decided on a Humana plan that was supposed to pay for his prescriptions (Prograf and Rapamune) that cost approximately $2,500 a month.

When refilling the anti-rejection prescriptions, Humana plan wouldn’t authorize payment because the drugs were deemed a Part B, not a Part D, benefit. So, Cartalino worked the phones and discovered that no one could answer his questions. (The Chicago Tribune had the same difficulties with attempting to assist Cartalino).

Cartalino will get his prescriptions, but only as a result of involving the Tribune. According to Robert Herskovitz, a Chicago Medicare official, ICHIP would cover his transplant drugs after all. (That information was buried in the policy.) Similar problems are occurring in other states as well. Many of these issues have been brought to the attention of Congress.

Congressional Reports and Conclusions

There has been Congressional testimony from others who were unable to get their medication under Part D.

“…Senate Democrats told stories of weeping older people who were unable to get their medicine as Congress opened hearings into Medicare’s new drug benefit.”

“Senators Hillary Rodham Clinton, D-N.Y., and Bill Nelson, D-Fla., said they met older people who were in tears when they talked about problems filling prescriptions.”

“‘I for one believe we should scrap this and start over,’ Clinton said."

Other congressman addressed different aspects of Part D. Representative Waxman (D-CA) has been concentrating on the restrictions in the differing policies. Waxman has also stated, in a recent radio address,

The program was turned over to hundreds of private insurers who can charge what they want, cover what drugs they want, and change what they cover at will. Instead of the certainty of Medicare coverage, seniors are now faced with a confusing array of choices, inaccurate information, and sometimes even higher costs.

Henry Waxman initiated an investigation of Part D only to discover that the pharmaceutical companies were expecting “windfall profits” as a result of Part D.

In the letter to the GAO (Government Accountability Office), he wrote,

The end result is that the new Medicare benefit will cause a massive transfer of revenues from the taxpayer to the drug industry for no discernable benefit to anyone but the drug companies.

Waxman initiated another report which detailed the existence of hidden restrictions, such as the Part D plan’s insistence on the use of generic drugs, as opposed to prescriptions written DAW (Dispense As Written) and “step therapies.” The latter require that, in many instances, a patient try a potentially less effective medication, before an insurance carrier "authorizes” payment for the drug a doctor originally determined to be the best solution to the patient’s problem.

In addition to the testimony of those unable to get their prescriptions, there were also concerns by small businessmen/independent pharmacists that were addressed.

Pharmacists’ Experiences

Sen. Blanche Lincoln, D-Ark., said pharmacists in her state have had to take out loans because they could not get reimbursed quickly enough for drugs dispensed to customers who had no means to pay for them.

The reimbursement problem is not unique to Arkansas. Ohio pharmacist John Coler is concerned that his business may go bankrupt, as his expenses are, in addition to overhead, a bank payment, a loan payment, and a wholesaler bill every 2 weeks. Coler’s opinion of Part D is that it:

has created an environment where you can’t practice pharmacy. We spend so much time being insurance representatives that it’s taking away from patient counseling.

...

I have had patients tell me to keep [the medication] because they can’t afford it.

...

The questions we’re asked are not 5- to 10-second responses. We can spend 10 to 20 minutes per patient.

This sentiment has been echoed by the National Community Pharmacist Association (NCPA) as it was reported in In-Forum:

Implementation of Medicare Part D has been beset with serious problems, including incomplete or unavailable eligibility information and significant challenges with claims processing. Although the source of these problems comes from many elements of this complex new benefit program, it is the nation’s community pharmacists who are bearing the brunt, along with their patients.

In addition, a later survey completed by pharmacists discovered the existence of a:

... troubling trend for consumers: A high percentage of Medicare customers find out their list of covered drugs has changed.

Sixty-one percent of pharmacists said customers’ “formularies” had changed after they signed up. In two-thirds of cases, the changes were not beneficial to consumers.

The Questionable Role of the AARP

The AARP “was instrumental in passing the Medicare bill, continues to defend it and vigorously sells the United plan, from which it earns commissions.” By its sale of the UnitedHealth MedicareRx plan, the AARP can generate tens of millions of dollars. However, AARP continues to have non-profit status as it represents 35 million subscribed seniors and is considered to be one of the most recognized and powerful lobbying groups in the country.

According to the Baltimore Sun, with at least 1.8 million members, AARP's MedicareRx plan makes up more than half of the total enrollment of 3.2 million (currently 3.8 million according to a recently published article in the New York Times) in all the Medicare-related plans offered by UnitedHealth.

This conflict of interest was recognized first by Rep. Pete Stark and Larry Noble, executive director of the Center for Responsive Politics.

Congressman Stark recognized the conflict of interest and claimed,

They can’t have it both ways... It would be like Consumer Reports investing trust fund money in Chrysler and then promoting Chrysler cars. You can’t claim to be a disinterested advocate if you’re peddling insurance to make a profit and pay your overhead.

Noble stated that, in his opinion, AARP should make a full financial disclosure of any and all revenue received from UnitedHealth.

Non-Compliance With Federal Standards

Due to the impending deadline for enrollment in a Part D policy, even more glitches are to be expected. The phone wait is beginning to increase, and concerns about compliance with the federal call-handling regulations are rising.

Callers to Humana, one of the largest Medicare carriers, often had to wait 30 minutes to reach a customer service representative last week. Federal standards say that 80 percent of calls must be answered in 30 seconds. Test calls to several large insurers suggest that they frequently miss that goal, though the waiting times are much longer for Humana.

In response to this concern, Commissioner of the Food and Drug Administration, Mark McClellan stated that, if it was determined that the Part D plan in question was non-compliant, enforcement/civil fines could be taken against the insurer offering it.

Payment Confusion, Blame All Around

Another concern regarding the UnitedHealth Part D policies offered by AARP has been raised. Some who enrolled in this plan have been receiving a letter that reads similar to this excerpt:

“We have not received payment for your AARP MedicareRx Plan premium.”

...

“If we do not receive payment by 5-31-2006, we will have to disenroll you.”

The letter demands four months worth of payment in advance, which can constitute an extreme financial hardship and undue stress for those on a fixed income. In fact, in some instances, the recipient of such a letter may have received previous approval to have the premium deductions withheld from a Social Security check and assumed that was being done.

In response to this type of complaint, according to a New York Times article, Steven E. Hahn, of the AARP, blamed United Health who blamed Medicare who blamed Social Security. The Social Security Administration states that all claims have been processed. Medicare claims there has been a “higher-than-expected rejections of withhold transactions by Social Security.”

Conclusions

One can only conclude that a complete overhaul of Part D is necessary, so those who are affected by this program will receive the prescriptions that are necessary to their health and well being.

About

Terri Emerick is a writer and citizen journalist. She holds a BA in Public Administration from Wayne State University. In addition, she is a member of the Medicare Rights Consumer Advisory Board.

Additional Resources:

Medicare Rights Consumer Advisory Board: www.MedicareRights.org

Center for Medicare Advocacy: www.medicareadvocacy.org/PartD_PartDAppeals.htm

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Contributors to this article: Kfred, Susie Dow, standingup, stoy

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