Medicare Compliance & Reimbursement

The in's and out's of the complicated new addition to Medicare.  With so much discussion about which provider groups will benefit the most from the new legislation, the most overlooked part of the bill may be its central feature: the prescription-drug benefit itself. Here's how the Rx benefit will work: Between the idea and the reality falls ... the discount card. As in previous versions of the legislation, to tide beneficiaries over until drug plans launch in 2006, the bill will offer Medicare-endorsed prescription drug discount cards for all. Sponsors say that the cards would yield between 15 percent and 25 percent discounts. In addition, low-income beneficiaries will get an additional up-front boost in the form of $600 federal subsidies to use with their cards in 2004 and again in 2005. A little assistance, please. The basic drug benefit partly splits the difference between the House and Senate versions, leaning toward the House strategy of offering as generous a benefit as possible to people who spend little for drugs in a given year. The highly political argument in favor of this approach is that, particularly when it comes to prescription drugs, Americans are long accustomed to receiving assistance - not true insurance - from their employer-sponsored health plans. That being the case, lawmakers expect that people who don't spend much money on drugs in a given year would resent a plan that didn't offer them close-to-first-dollar assistance, essentially repaying some of what they spend in premiums even in years when their health needs are low. This, of course, runs counter to the insurance principle that paying premiums in lucky, healthy years is the price for secure knowledge that catastrophic aid will be there when luck runs out. Medicare will pay 75 percent of beneficiaries' costs between $250 and $2,250, in hopes that fairly hefty assistance for those who are healthy enough to go out and vote will forestall a replay of senior anger over 1988's sensibly constructed but ill-received Medicare catastrophic-coverage bill, which Congress repealed only a year after passing it. If you don't have a hole, you don't have a doughnut. Those who describe the drug benefit often gripe about its complications. Exhibit A in such discussions is the so-called doughnut hole of no-coverage between assistance offered to low spenders and catastrophic coverage for the most seriously ill. At least one early House version of the current legislation - developed in the mid 1990s - did not have this much-bemoaned feature. That bill, which offered a fairly hefty pot of popular drug assistance for low spenders, was quickly revised, however, when critics pointed out what it didn't offer: catastrophic assistance for the sickest beneficiaries, the very people that lawmakers [...]