The Bush administration will have to work harder to protect the poorest Medicare beneficiaries from falling through the cracks of the Part D drug benefit enrollment process, under a settlement of a class action lawsuit announced Thursday.
In sum, the settlement shifts more of the burden to rectify mix-ups on the Centers for Medicare and Medicaid Services (CMS), private Part D benefit plans and states and away from low-income elderly and disabled beneficiaries who are enrolled in both Medicare and Medicaid.
These beneficiaries have always been entitled to their benefits, but the implementation of Part D failed some of them, maintained Jerad Kopel, the partner at the law firm Wilson Sonsini Goodrich and Rosati , which worked with the plaintiffs on the case.
“The Medicare statute passed in 2003 was being violated,” Kopel said.
Jeff Nelligan, a CMS spokesman, said the agency has worked “tirelessly” to ensure that all enrollees of Part D have “full and timely access to the prescription drugs they need.”
He said CMS would await “final court approval” of the settlement before commenting further.
The settlement primarily requires CMS, Part D plans and states to act more quickly to get Medicare-Medicaid enrollees into the Part D system and to address problems that arise. These three partners also will have to share information with each other more quickly to ensure that beneficiaries’ records are up to date.
Beneficiaries’ paperwork burden also will be reduced under the agreement. From now on, when a beneficiary asserts he or she is eligible for the Part D low-income subsidy but lacks the documentation, CMS, the plan and the state have the responsibility to clarify the problem, not the beneficiary.
“As a result of the settlement, it will now be easier for the poorest beneficiaries to navigate Medicare Part D,” said Gil Deford, the director of litigation for the Center for Medicare Advocacy.
There are an estimated 6.2 million people who received both Medicare and Medicaid benefits. All of them are eligible for the Medicare Part D low-income subsidy, which covers most of their costs for prescription drugs.
When Medicare Part D rolled out in January 2006, these so-called dual-eligible beneficiaries encountered widespread problems getting enrolled in Part D plans. Pharmacies often did not have these beneficiaries’ information in their computer systems and could not dispense their medication.
Dual-eligible beneficiaries, who had been receiving their drug coverage from Medicaid, had more problems than others because they were automatically assigned to Part D plans.
To resolve these problems, beneficiaries have had to deal with CMS, state Medicaid offices, private Part D plans and their pharmacies. These delays put them at risk of not getting needed medicine.
Dual-eligible beneficiaries use more medication on average than other people on Medicare and lack the money to pay out-of-pocket for their drugs when they encounter a bureaucratic obstacle, which makes them particularly vulnerable to failures in the Part D enrollment system, the plaintiffs argued.
Beneficiaries are most likely to run into trouble when they first sign up for Medicare Part D or change plans.
In April 2006, the National Senior Citizens Law Center and the Center for Medicare Advocacy sued Health and Human Services Secretary Mike Leavitt, contending that CMS was not doing enough to make sure that dual-eligible beneficiaries were properly enrolled in the Part D system. The lawsuit, filed in federal district court in San Francisco, was certified as a nationwide class action in January 2007.
The solutions to the problems alleged by the lawsuit will be made mostly behind the scenes.
“These are technical solutions to what are technical problems, but they have real-life consequences,” Prindi-
States will be able to provide CMS with information on which of their residents are on Medicare and Medicaid and/or qualify for the low-income subsidy. CMS will then be required to process that information within one business day, after which the Part D plan and pharmacies will have accurate information. CMS also has to update its systems immediately when a beneficiary’s eligibility for the low-income subsidy is established. Currently, these processes can take more than a month, according to Prindiville.
CMS also must explain these changes to pharmacies so they are aware of the new policies and can help beneficiaries experiencing enrollment problems.
The settlement gives the plaintiffs the right and responsibility to oversee CMS’s actions to meet the terms of the deal. The agency also must make information available to the plaintiffs to allow them to monitor those actions.
In addition to agreeing to make changes in how it handles Part D enrollment problems, CMS also agreed to pay the plaintiffs $700,000 for their legal expenses and up to $110,000 for the cost of monitoring the agency’s implementation of the agreed-upon processes.
Although the settlement closes the door on the class-action lawsuit, individual beneficiaries could still sue CMS on the same grounds, the plaintiffs noted.