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Seniors May Have Lost Out on Drug Subsidies
Some Eligible for Both Medicaid, Medicare Unaware of Reimbursements, Study Finds

By Christopher Lee
Washington Post Staff Writer
Tuesday, May 8, 2007

Some low-income seniors may have missed out on millions of dollars in federal subsidies because the government did not notify them that they could be reimbursed for past prescription drug purchases when they enrolled in Medicare's drug benefit, a Government Accountability Office study has found.

The problem is one of several that has complicated the enrollment of nearly 7 million "dual eligible" people who qualify for both Medicare and Medicaid, according to the study being released today.

It can take more than one month for a senior who newly qualifies for Medicaid, which provides health care to the poor, to be enrolled in a heavily subsidized prescription drug plan (PDP) offered by Medicare. But by law, the person must get coverage retroactive to when they became eligible, sometimes up to several months before.

Medicare paid insurers $100 million last year to provide that coverage. However, until March of this year, the federal Centers for Medicare and Medicaid Services (CMS) did not inform the beneficiaries that they could seek reimbursement for drugs bought during the retroactive period, the GAO found. More than 400,000 beneficiaries could have been affected, according to congressional staffers.

"Given the vulnerability of the dual-eligible beneficiary population, it seems unlikely that the majority of these beneficiaries would have contacted their [plan] for reimbursement if they were not notified of their right to do so," GAO investigators wrote.

In a written response to the GAO, Leslie V. Norwalk, acting CMS administrator, objected to the "overwhelmingly negative tone" of the findings. It is difficult to deliver "real-time" benefits to beneficiaries who become eligible retroactively, she wrote, but CMS has taken steps to ensure that low-income seniors understand their right to reimbursement for retroactive costs.

"[W]e consider any implication that CMS is somehow overpaying PDP sponsors to be inappropriate," Norwalk wrote.

The Senate Finance Committee will examine this and other problems at a hearing today. It can take at least five weeks for some low-income beneficiaries to receive the drug benefit, because of delays in the enrollment process and in communicating information to beneficiaries and pharmacies, the GAO found.

"We need to make sure the best of this hard-won drug benefit is reaching the seniors and disabled Americans who are most in need," said Sen. Max Baucus (D-Mont.), the committee chairman.

Sen. Charles E. Grassley (Iowa), the panel's top Republican, said that Congress needs to make sure such problems do not recur. "I'm very disturbed that CMS paid out about $100 million to plans to pay claims for dual eligibles, yet CMS can't say if the plans lived up to their obligations," he said. "Apparently, both the beneficiaries and the government were short-changed."

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