Medicare Compliance & Reimbursement

Senate keeps reimbursement legislation on 'simmer.'

At least 26 states have stepped up to the plate to provide emergency stopgap prescription drug coverage to dual eligibles facing Part D enrollment problems, with no clear decision whether Medicare would reimburse their efforts--until now.

Health plans, with support from the Centers for Medicare & Medicaid Services agreed Jan. 24 on ways they will work together to reimburse states for emergency coverage. Health plans will reimburse states for incorrect beneficiary copayment billing based on benes' plan contracts.

CMS stated Jan. 17 that it would not reimburse states for filling benes' prescriptions. But after facing industry criticism and increasing pressure from the Senate, the agency announced Jan. 24 that it will reimburse states for the amounts they paid to fill benes' prescriptions and fund administrative costs for emergency coverage. "This can start right away; we don't need legislation," says CMS Administrator Mark McClellan.

Part D transition problems may continue to crop up until every dual eligible uses the benefit at least once, warns McClellan. Nevertheless, CMS' plan to reimburse states is a temporary demonstration that ends Feb. 15. Health and Human Services secretary Mike Leavitt is considering extending the program to select states on an as-needed basis.

Misinformation Ignites Reaction From Health Plans, Senate Groups

After Medicare Part D went into effect Jan. 1, many Medicaid enrollees transitioning to the new plan experienced coverage denials when they attempted to fill their prescriptions. The problem does not stem from health plans, but from last-minute plan switching and inaccuracies in the initial enrollee data file that a private CMS contractor provided to pharmacies, claims America's Health Insurance Plans president Karen Ignagni. Once plans receive and verify the correct enrollee data from CMS, reimbursements to states won't take very long, Ignagni says.

Despite commitments from CMS and HHS to address states' stopgap payments, senator groups may continue to move forward with legislative backup plans. Senators Norm Coleman (R-MN), Dianne Feinstein (D-CA), Frank Lautenberg (D-NJ), Charles Schumer (D-NY) and Olympia Snowe (R-ME) submitted a bill that would require the federal government to directly reimburse states for drug costs, plus interest, by reducing "clawback" payments to the federal government. "States should not have to wait to be compensated by insurance companies for expenses incurred as a direct result of CMS' errors," asserts Snowe. "The federal government should live up to its new responsibility and reimburse states for these costs."

Senators John Rockefeller (D-WV) and Hillary Rodham Clinton (D-NY) sponsored a separate bill that would reimburse the costs that pharmacies incurred and require plans to supply at least one-month's medications to benes. Clinton calls the Part D fiasco an "absolute first-class piece of evidence of how the Republicans are doing their business and not the business of [...]