Finance Committee wants premium glitch fixed

Members of the Senate Finance Committee are keeping the pressure on the Medicare and Social Security agencies to fix a glitch that caused hundreds of thousands of beneficiaries to pay the wrong premiums.

The heads of both agencies met with the Finance Committee behind closed doors last week to go over their plans to rectify billing discrepancies that led to many Medicare enrollees owing unpaid premiums to the health-insurance companies providing their drug benefits.

Since meeting with Centers for Medicare and Medicaid Services (CMS) Administrator Mark McClellan and Social Security Administration (SSA) Commissioner JoAnne Barnhart last Thursday, several senators have expressed concern that the plans from agencies might be too harsh, especially for poorer beneficiaries.

These billing errors have brought renewed attention to the pitfalls inherent in rolling out the massive new Part D prescription-drug benefit, which has required the coordination of federal agencies and health insurers.

The administration has disclosed two separate billing problems in recent weeks that together affected an estimated 700,000 Medicare beneficiaries.

First, the administration revealed that 230,000 beneficiaries were accidentally sent refund checks that would have to be returned or repaid.

Later, the administration said that the wrong Medicare premiums had been deducted from Social Security checks sent to 400,000 to 500,000 beneficiaries throughout the year, and that in some cases no premiums at all had been paid for months.

The health plans that administer the drug benefit likewise have not been paid the premiums that CMS and the SSA should have been collecting and passing along. These health plans also will ultimately be responsible for recouping unpaid premiums.

The agency already has contacted the beneficiaries who received accidental refunds and is working individually to establish installment plans for those who may have spent the money already.

The second billing problem could prove more complex to fix. CMS and the SSA are developing a plan to establish how beneficiaries can set up installment plans to pay off what is owed to their Part D insurance plans, the CMS spokesman said.

The agencies are relying in large part on beneficiaries to notify CMS that the correct premiums are not being taken out of their Social Security checks.

“They’re calling us. They’re letting us know,” or are calling their Part D health plans, the CMS spokesman said. The insurance plans are also providing information on unpaid premiums.

“CMS and SSA got this wrong. It was a government blunder, and the government should remedy the situation immediately,” Sen. Jay RockefellerJohn (Jay) Davison RockefellerOvernight Tech: Trump nominates Dem to FCC | Facebook pulls suspected baseball gunman's pages | Uber board member resigns after sexist comment Trump nominates former FCC Dem for another term Obama to preserve torture report in presidential papers MORE (D-W.Va.) said in a written statement. “For these agencies to suggest that this issue be kicked over to the plans is merely another irresponsible act on their part. The bottom line is that our seniors have done everything right — they should not have to continue to wait for this bureaucratic nightmare to be over.”

The administration is trying to get fixes for these billing issues in place over the next three months; the sign-up period for 2007 Part D benefits begins in November.

In a letter sent to McClellan and Barnhart on Tuesday by Rockefeller and Sen. Gordon Smith (R-Ore.), the two Finance Committee members seek assurances that the two agencies will protect beneficiaries from being hit with costly bills because of the government’s mistakes.

“We are extremely worried that … seniors in these circumstances will face a premium withholding amount equal to several months’ premiums all in one month,” Rockefeller and Smith wrote. Senate Finance Committee ranking member Max BaucusMax Sieben BaucusSteady American leadership is key to success with China and Korea Orrin Hatch, ‘a tough old bird,’ got a lot done in the Senate Canada crossing fine line between fair and unfair trade MORE (D-Mont.) has suggested that some low-income beneficiaries’ unpaid premiums should be waived.

According to Rockefeller and Smith, Barnhart told the panel that the SSA would seek single, lump-sum repayments, while McClellan said that the first installment would not exceed three months’ worth of premiums, and the balance could be paid to the Part D plan in increments. The plan and the beneficiary would be responsible for setting up a payment plan.

But Rockefeller and Smith observe that “even a three-month withhold in a single check could cause a severe hardship for seniors living on fixed incomes.”

“It really comes down to how much [money] it is,” the CMS spokesman said, noting that the agencies have not made a determination of what that threshold might be.