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Senators Debate Standardizing Medicare Part D Drug Plan

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Members of the Senate Finance Committee debated last week if the Medicare Part D drug plan should be standardized to reduce consumer confusion.

At a hearing to discuss the problems occurring during the program’s startup earlier this year, Sen. Max Baucus, D-Mont., the ranking member of the panel, noted consumers are having difficulties because of the wide spectrum of different plans. Lawmakers, he said, should work to help seniors make an “apples to apples” comparison of different plans and should consider establishing standardized plans similar to those created for Medigap coverage.

“Congress should learn the lesson of Medigap,” Baucus said, recalling the debate over that issue as a “huge battle” in 1980.

“We should standardize the drug plans,” he said, adding that he will introduce legislation that would do so.

Testifying at the hearing, Dr. Mark McClellan, the administrator of the Centers for Medicare and Medicaid Services, said the establishment of plans that go above and beyond the original intent of the Part D drug benefit program actually has been a positive. In gauging which drug plans beneficiaries signed up for, he said, “most people did not want the standard plan.”

Additionally, McClellan noted, the increased number of plans has fostered competition and helped to keep costs for the program down. In fact, he said, the lower than expected costs have reduced the Bush administration’s projected costs of the program in the federal budget by $130 billion.

Baucus said there are still “way, way too many” drug plans. “Doesn’t it make sense to draw the line somewhere?” he asked, suggesting that Congress establish as many as 10 standard plans that could be more easily compared.

Sen. Orrin Hatch, R-Utah, however, defended the wide selection of drug plans.

“We’re all amazed by how many companies want to participate,” in the program, he said. The increased number of choices does make selecting a plan “difficult,” he acknowledged, but has overall been a “wonderful thing” given that members of the Senate at one time questioned whether any insurer would willingly offer a drug plan. Now, he noted, “some have worked better than what we designed in the bill.”

The committee met to discuss the problems that occurred when the program was launched in January. Many seniors who had signed up for the program found their claims being denied or requiring expensive co-payments when they sought to fill their prescription, a problem McClellan attributed to a surge in last-minute signups to the program. In some states the problem was so severe that state authorities were forced to intervene and, in some cases, pick up the tab for prescriptions.

These problems earned CMS strong criticism from Sen. Kent Conrad, D-N.D., who called the startup of the program a “fiasco.”

“People are furious at your agency,” he told McClellan. “This has been botched and bungled every step of the way.”

Conrad further criticized McClellan’s claims that customer service for the program had improved, suggesting that wait times on CMS’ Medicare help phone number were down because fewer consumers were bothering to call.

“People say, ‘calling CMS is worthless.’ That’s what they tell me,” he said.

Additionally, Conrad criticized CMS’ claims regarding the number of people who have signed up for the drug benefit, noting that most were enrolled automatically and that very few actually have opted to sign themselves up.

McClellan noted that CMS is taking several steps to resolve the problems that occurred in January and reimburse the states for prescriptions and administrative costs, and should have completed much of that work by April. He also noted that CMS has had no problems with over 90% of those seniors who gave themselves a significant amount of time, as much as several weeks, when enrolling in the program.

However, he noted, because the legislation creating the program allows for a senior to enroll in the drug program on the last day of one month and be eligible the first day of the next, there always will be technical problems ensuring that these late enrollee prescriptions are filled.

Sen. Rick Santorum, R-Pa., noted that this legislative flaw demonstrated that perhaps all of the blame for the drug program’s problems should not be laid at the feet of CMS.

“Some say this is a botched job by CMS,” he said. “Some might also say that Congress may not have been thinking clearly,” when it wrote the legislation allowing for beneficiaries to expect their coverage just one day after enrolling.

Sen. Jeff Bingaman, D-N.M., suggested that Congress could change the law to establish a cutoff date, after which enrollees would have to wait for more than a month for their benefits to kick in. McClellan responded to this by saying, currently, CMS instead is focusing on fixing the immediate problems and believes it can fix those problems administratively rather than through legislation.


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