The States Step In As Medicare Falters
Seniors Being Turned Away, Overcharged Under New Prescription Drug Program

By Ceci Connolly
Washington Post Staff Writer
Saturday, January 14, 2006

Two weeks into the new Medicare prescription drug program, many of the nation's sickest and poorest elderly and disabled people are being turned away or overcharged at pharmacies, prompting more than a dozen states to declare health emergencies and pay for their life-saving medicines.

Computer glitches, overloaded telephone lines and poorly trained pharmacists are being blamed for mix-ups that have resulted in the worst of unintended consequences: As many as 6.4 million low-income seniors, who until Dec. 31 received their medications free, suddenly find themselves navigating an insurance maze of large deductibles, co-payments and outright denial of coverage.

Yesterday, Ohio and Wisconsin announced that they will cover the drug costs of low-income seniors who would otherwise go without, joining every state in New England as well as California, Illinois, Pennsylvania, Arkansas, New Jersey, North Dakota, South Dakota and New Jersey.

"This new prescription drug plan was supposed to be a voluntary program to help people who didn't have coverage," said Jeanne Finberg, a lawyer for the National Senior Citizens Law Center. "All this is doing is harming the people who had coverage -- America's most vulnerable citizens."

Hailed as President Bush's signature domestic achievement, the program, which began Jan. 1, offers drug coverage for the first time to 43 million elderly and disabled Americans eligible for Medicare. At the same time, 6.4 million low-income beneficiaries who were receiving their medications through state Medicaid plans were switched into Medicare for their drug benefits and told they would not be charged the standard $250 deductible or co-payments.

But interviews with two dozen people -- state officials, pharmacists, advocates for seniors, and Medicare clients -- revealed a host of problems. Many poor seniors were never enrolled or were enrolled in plans that do not cover their medications. Others received multiple insurance cards, creating confusion at the pharmacies. Some were charged the deductible and unaffordable co-payments. And some, such as Laurine League, left empty-handed.

"For years I've had no problems, going to the same pharmacy," said League, 49, a Queens, N.Y., woman with severe mental illness. "The pharmacist told me one drug was going to cost $198. I don't have that kind of money."

The states that have stepped in to help have already incurred several million dollars in unexpected drug bills, but Mark B. McClellan, administrator of the federal Centers for Medicare and Medicaid Services (CMS), said he did not have the authority to reimburse them. He urged states, pharmacists and providers to work with his agency to collect reimbursements from insurance companies administering the prescription program.

Acknowledging that some of the 6.4 million low-income beneficiaries known as "dual-eligibles" have been overcharged or denied medication, McClellan said: "That is simply not acceptable. We have been working around the clock and around the country to make sure those beneficiaries get the prescriptions they need."

California Gov. Arnold Schwarzenegger (R), announcing his intention to spend as much as $70 million to provide two weeks' worth of medicine, said he expects a reimbursement. "While I am confident the federal government will resolve the problems with this transition, these people need our help now," he said, "and we're going to be there for them."

Politicians in both parties were quick to rise to the defense of a particularly vulnerable population. As a group, dual-eligibles have incomes below the poverty rate of $9,570 a year and take an average of 15 medications a day. More than half are women, 40 percent have cognitive impairments such as Alzheimer's and 20 percent do not speak English, according to Finberg.

"The dual-eligibles should have been the last group enrolled because they are the hardest to get going," said Thanh Lu, who focuses on Medicare issues at the Progress Center for Independent Living in Illinois. Clients who are in nursing homes, who have schizophrenia, or who are deaf or blind are ill equipped to tackle the complex new system. Medicare compounded the problem by sending out a handbook that incorrectly told low-income seniors they could enroll in any plan at virtually no cost, he said.

The first state to act was Maine, after its hotline recorded 18,000 calls on Jan. 3, said Jude Walsh, a special assistant to the governor.

"We had dialysis patients who were not getting medicines, pharmacies on hold for 60-plus minutes, some plans closed for the holiday," she said, describing some of the frantic calls. "One man called me -- he and his wife were on 15 medications. They had no co-payments on Medicaid. He went in for 15, and he left with one" medicine because of the cost, she said.

Yesterday the hotline uncovered a new problem, she said. Some beneficiaries have received letters from private health plans warning that the monthly premiums for their drug coverage will be deducted from their Social Security checks, even though they are poor enough to qualify for free coverage. So far, Maine has paid for 68,000 prescriptions at a cost of $3.6 million, Walsh said.

Some supporters of the Medicare expansion blamed pharmacists for not learning the new system. But many pharmacists said they attended classes and purchased new computer software in anticipation of the Jan. 1 launch.

"The first week was pure hell," said Mike Souders, owner of Metropolis Drugs in southern Illinois. Computer systems crashed, phone lines were jammed, and there was no way for him to confirm that patients were covered. He called in extra employees who worked the phones late at night, and he asked doctors to provide regular customers with drug samples until the confusion could be resolved.

"In 2000, for Y2K, we were practicing running systems for a year," he said, referring to computer preparations for the coming of the new millennium. "They started this up cold turkey."

Social workers and advocates have warned for months that moving the most vulnerable patients to a new program would require a slower, phased-in approach.

"All of the worst predictions came true," said Robert M. Hayes, president of the Medicare Rights Center. Many of the thousands of callers contacting the center said they were being told that the insurance plan they were assigned by the federal government does not cover their medications, he said.

If that occurs, pharmacists have been instructed to provide a one-month "transitional" supply until a doctor can prescribe a similar drug that is covered by the plan, McClellan said. In addition, CMS has devised a 14-step enrollment process for pharmacists, he said.

Baltimore Health Commissioner Joshua M. Sharfstein and his staff have personally been assisting pharmacies with that effort. "I don't think we have yet successfully counseled a pharmacist through that," he said.

"We've been doing enrollments and they have not taken less than an hour and a half" each, said MaryAnn Griffin, director of Alexandria's Office of Aging and Adult Services. She recently joined a CMS teleconference briefing but found that it was a "listen-only, completely scripted" event that did not address the myriad problems her staff is confronting.

From the outset, administration officials have said they would rely on states, doctors, family members and volunteers to help seniors negotiate the new system. But Anne Marie Murphy, Illinois's Medicaid director, said the CMS should be resolving the current problems.

"It's a little ironic that Congress and the administration are talking about cutting Medicaid administrative costs, and here we are rolling up our sleeves and doing all we can to make sure a federal program is working," she said.

View all comments that have been posted about this article.

© 2006 The Washington Post Company