There have been a number of articles lately about the negative effects Medicare Part D has had on the retail end of the Pharmacy business. Here is one from USCF Today

Each day, the nation’s pharmacies dispense more than 8 million prescriptions. In return, pharmacies are reimbursed by patient health plans. What used to be so simple has now become a game of chance, thanks to the advent of Medicare Part D.

Health policy expert Helene Levens Lipton, professor of health policy and pharmacy at the UCSF School of Pharmacy, explains what went wrong and what could happen next, particularly to the nation’s 25,000 independent pharmacies, which lack the deep pockets of major chain pharmacies.

Q: Pharmacists from Texas recently descended on the White House to complain that the new Medicare drug plans are not reimbursing pharmacists quickly enough, thereby threatening their livelihoods. Have you heard of such complaints from pharmacists in other states? How big a problem is it?

A: This is a serious problem that has been widely reported nationwide. And when you couple this problem with recent cuts in pharmacists’ reimbursement under Medicaid, it spells trouble for retail pharmacies.

Medicare drug plans now tend to take about six weeks to reimburse a pharmacy for a dispensed drug. It used to take seven to 15 days. Some independent pharmacies have had to take out loans to compensate for the resulting cash-flow problems.

The Centers for Medicare and Medicaid Services (CMS, the government agency administering the new national drug benefit) has issued guidance on this issue, stating that plans should pay pharmacies faster. But this is nonbinding; the health plans do not have to comply.

Overall, this lack of regulatory power is in keeping with the CMS decision not to police the health plans. There is no reason that it had to be this way. Congress has now belatedly recognized that fact, and introduced a bill that would require a shorter reimbursement time.

Q: Has the dollar value of drug reimbursement declined? If so, by how much? And do you believe pharmacists were aware of this possibility when Medicare Part D was being discussed?

A: There are really two issues in play at the moment: slow reimbursement and low reimbursement.

Under the new Medicare drug benefit, prescription drug plans are offering very low dispensing fees. They are on the order of about $2, though the fee varies by state and by generic versus brand-name drug, etc.

Medicaid reimbursement was previously in the $5 to $10 range, and the private payers were about the same. But pharmacies must have been aware of what was coming because they signed on to these contracts, which stipulate dispensing fees and payment schedules.

CMS could, of course, “raise the bar” for health plans by requiring faster payment and creating minimum dispensing fees to pharmacies. And there is some talk that it is considering increases in reimbursements for pharmacists who help patients switch from brand-name drugs to generic medications. But for now, it is just talk.

Q: In the early days of Medicare Part D, one heard anecdotally of many pharmacists donating their time and dispensing a few days’ supply of drugs to keep their patients well. Is there any way to verify and quantify those stories?

A: This is unquestionably true. Community pharmacists have provided access to needed drugs to elderly patients who faced shortages due to problems with the new drug benefit. The extent of pharmacists’ commitment has been documented many times in the press. Pharmacist representatives have reported the phenomenon at recent congressional hearings. Often this has resulted in monetary losses to the pharmacies. The precise monetary value would be difficult to derive, because sometimes the states absorb the loss, although more often the pharmacies take the loss.

Q: Is there a risk that small pharmacies will indeed have to shut down if the cash flow problem for drug reimbursements continues?

A: In my opinion, there is definitely a risk. Of course, the pharmacist shortage is another important factor contributing to this problem. Rural independent pharmacies (and other pharmacies with high Medicare and Medicaid populations) will be at greatest risk for closure. I think that the dissolution of rural independent pharmacies is a very real possibility. But the prescription drug plans under Medicare Part D have pharmacy network requirements that must be met. So, if you’re the last rural pharmacy standing, you would have some decent bargaining power with the health plans. That is a dire scenario, but it could happen!

Mona Skinner, 79, needed help weeding through the insurance plans for her Medicare Part D enrollment forms, so she turned to the experts: two twentysomethings serving in the AmeriCorps service organization.

“I’ve been procrastinating,” said Skinner, a retired homemaker from Junction City. “There’s too many plans. … I just didn’t know which way to jump.”

After a 30-minute consultation inside the Junction City branch of Lane Community College, Skinner had a good idea of the plan she wanted. AmeriCorps members Megan Peters, 24, of Lexington, S.C., and Komal Soin, 23, of Philadelphia, ran the numbers on a computer screen, and sent Skinner on her way with a handful of printouts detailing the pluses and minuses of several insurance plans.
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“It’s very satisfying (work),” Peters said. “It’s awesome to have that satisfaction of knowing that you helped them save money.”

Peters and Soin are part of a 10-member team that will be in Lane County this month providing Medicare enrollment assistance to seniors in outlying communities. The group, which arrived last week, is staying at a summer camp in Veneta. Each day they’ll meet with seniors in different communities, answering questions on everything from eligibility to avoiding the so called “doughnut hole,” which provides no coverage for prescription drugs.

“A lot of seniors are very confused by all of the plans that are there,” Soin said. “It really is a case-by-case (process) of seeing what works better with their incomes.”

“We’re just trying our best to save them money and find a good plan.”

It’s great to hear that young people are stepping up to help our seniors make sense of this complicated program.

I found this in the Concord Monitor:

Meg Heckman’s “Some stranded by Medicare benefit” (Monitor, Feb. 13) was an important story. It is one of the few to counter the hype that Medicare Part D is dramatically cutting the cost of prescription drugs for all seniors.

Heckman describes how this legislation derailed the Medication Bridge Program, which provided about 17,000 New Hampshire residents with free or reduced-price medications. Drug costs suddenly increased for most of this population.

The new Medicare legislation also eliminated prescription drug coverage from Medigap insurance policies that many retirement programs offered to supplement Medicare. Suddenly, retirees found themselves automatically enrolled in Medicare Part D. For some, the costs for the same prescription drugs they had been taking for years increased by more than 200 percent.

There are undoubtedly other sub-populations of Medicare beneficiaries who are seeing the costs of prescription drugs increase as a result of Part D, and enterprising reporters such as Heckman should find them.

But the big story, largely untold, is how the Bush administration and its enablers in Congress set up taxpayers and Medicare beneficiaries alike to pay inflated costs for prescription drugs.

They did this, first, by preventing Medicare from negotiating with pharmaceutical companies to establish discounted drug prices for their 42 million beneficiaries. This flies in the face of a basic purchasing principle: Buy in large quantities and get a lower price.

The federal government is already doing that for other programs. The U.S. Department of Veterans Affairs negotiates bulk discounts with the same pharmaceutical companies for the same drugs that seniors use, but it pays a much lower price.

Take Protonix, a drug for ulcers. According to a Boston Globe article, the VA can buy a year’s supply of this drug for $253. Under Medicare Part D, the cost is $1,080.

If Medicare could negotiate prices like the VA, it might reduce the average costs of drugs by almost 50 percent. The inflated drug costs of Part D are a giveaway to pharmaceutical companies, enabling them to reap windfall profits from this legislation.

The second way the Bush administration increased the cost of prescription drugs was to prevent Medicare from operating its own insurance plan. This was a handout to the insurance industry.

The Bush administration, mired in market fundamentalism, insisted that Medicare beneficiaries could get drug coverage only through a private insurance company. Although most news stories have focused on the mind-numbing complexity seniors encounter in trying to choose among 40 private insurance plans, the increased cost of privatization is seldom mentioned.

For example, the administrative costs of Medicare are in the range of 2-3 percent of total costs; for private insurance companies, they’re 10-15 percent. These additional costs are passed on to taxpayers and beneficiaries. The bottom line is that private insurance costs more.

Medicare Part D passed in the House in the dead of night by one vote. The Bush administration promised doubting Republicans that the legislation would cost no more than $400 billion over 10 years. The estimated cost is now almost twice that - $776 billion.

If this mess is what we get for partially privatizing Medicare, I can’t imagine the disaster that would have happened if Bush had been able to partially privatize Social Security.

I found this on USA Today:

Medicare said Tuesday that it will pay for three forms of an expensive surgery to treat obesity, so long as the patients are treated in “high-volume centers that achieve low mortality rates.”

The move comes after device makers, surgeons and some patient advocates urged the agency to create a uniform national policy on bariatric surgery, which can cost $15,000 to $20,000 per procedure. Previously, coverage decisions varied by region.

The impact will go beyond Medicare: Private insurers, which vary widely on whether they cover the surgery, often follow Medicare’s lead. For example, when Medicare decided to cover organ transplants, insurers began to pay for them.

Previously, Medicare officials said they were considering limiting the surgery to those under age 65, for safety reasons. But after reviewing new data, Medicare officials said experienced surgeons have similar outcomes for patients of all ages and they will pay for the surgery for any age.

At high-volume centers, the mortality rate from the surgery is less than 1%, Medicare says. Overall, the rate is in the 4% to 6% range.

To qualify for the surgery, patients must have unsuccessfully tried other treatments, have a body mass index of more than 35 and also suffer from weight-related problems, such as diabetes, heart disease or sleep apnea, the agency said.

Medicare paid for about 2,000 such surgeries in the over-65 age group in the past seven years and 20,000 cases in those under 65, who qualify for Medicare because they are disabled.

The agency says it does not have dollar-cost estimates on how much the new procedure will add but says it will be far less than what it spends on coronary bypass or heart defibrillators.

Surgery advocates say the ruling could save Medicare money in the long run because patients’ health will improve and some could even come off of disability rolls.

“It will cost less to take care of them,” says Harvey Sugerman, immediate past president of the American Society for Bariatric Surgery.

The three types covered are:

• The Roux-en-Y bypass, the most common bariatric surgery and the only type previously covered by Medicare, uses surgical staples to create a small pouch in the stomach connected to the bowel by a piece of the small intestine, bypassing the majority of the stomach.

• Open and laparoscopic biliopancreatic diversions involve surgically bypassing most of the small intestine and pancreas.

About 65% of American adults are overweight or obese, which increases their risk of heart disease, type 2 diabetes, cancer and many other diseases. And they are increasingly turning to bariatric surgery.

A study published in the December Archives of Surgery found that such operations increased 450% from 1998 to 2002, going from 12,775 to 70,256 cases. That number had increased to 140,640 by 2004, and the 2005 number was estimated at 171,200, according to the American Society for Bariatric Surgery.

I found this in The Washington Times:

Congress’ top accountant yesterday told House Budget Committee members that they should revisit the new Medicare prescription-drug program as one way to help reduce the amount of money that will be spent on health care.
David M. Walker, U.S. comptroller general, and other budget analysts who testified before the panel said the rising cost of health care is one of the main factors driving the growth of federal entitlement spending. They said health care costs must be controlled and that the programs themselves are in need of reform.
After presenting a list of options to save health care dollars, Mr. Walker, who heads the Government Accountability Office (GAO), said: “I would add to that … re-looking at Medicare Part D,” the new prescription-drug program that officially began last month. Mr. Walker said it needs attention because the government would have to invest $8.7 trillion in today’s dollars to pay for the program during the next 70-plus years.
Although he did not list specifics regarding how the Medicare drug program should be changed, he said money would be saved if Medicare could negotiate directly with drug companies for lower prices — something that Democrats and a few Republicans have been advocating. Supporters cite the success of the Department of Veterans Affairs (VA), which has such negotiating authority.
But Douglas Holtz-Eakin, an economist at the Council on Foreign Relations and a former director of the Congressional Budget Office, said the VA population and structure is different from Medicare’s, and that the government would not save much money by allowing Medicare to negotiate.
He urged caution against changing the Medicare drug program, which encountered enrollment glitches and other problems at the outset.
“It’s a couple of months old,” he said. “It’s going to take awhile for this to shake out.”
Mr. Walker suggested focusing more on prevention, developing a core of essential health care services and allowing people to pay for extra services, and mandating a limited growth rate for government-sponsored health care programs.
Both men told the panel that the population of baby boomers who start retiring in a few years will make for tough choices in reforming entitlement programs.
Mr. Holtz-Eakin said Congress likely will have to make annual efforts to forcibly curb entitlement spending. That budget-reconciliation process occurred last year when, for the first time in eight years, Congress gathered $40 billion in savings from entitlement programs.
“This is the future of this committee,” Mr. Holtz-Eakin said.
Democrats are hammering the need to revisit the new Medicare drug program during this election year and have introduced several bills.
Top House and Senate Democrats yesterday demanded action from Republicans, who have said more legislation is not needed.
“Medicare Part D is a reward for drug companies and a disaster for America’s seniors,” said Sen. Richard J. Durbin, Illinois Democrat.

I found this in the Miami Herald:

Recent media coverage has devoted a great deal of attention to the challenges in implementing the new Medicare prescription drug benefit. Unfortunately, little has been said about how this new program might actually help beneficiaries.

A newly released study by the National Health Council shows that Medicare beneficiaries with the nine most prevalent chronic diseases and disabilities can enjoy significant savings by enrolling in the right prescription plan.

Why talk about people with chronic conditions? Findings revealed that 86 percent of beneficiaries in the study had at least one chronic condition. Two thirds had at least two, and 40 percent had three or more.

For the beneficiaries with just one chronic condition, who spent an average of $1,507 each year on prescription drugs, the study calculated an annual savings of $400 by enrolling in Medicare Part D coverage. At the other end of the scale, for people with four or more conditions and average annual spending of $4,226, the savings amounted to about half that expense. The study also found that beneficiaries with catastrophic spending levels — more than $5,100 a year — could enjoy savings in excess of $4,000.

Despite the so-called ”doughnut hole” that some beneficiaries may encounter if their prescription spending falls within a certain range, several private plans under Medicare Part D are voluntarily exceeding federal requirements and eliminating any coverage gap. In addition, beneficiaries who meet certain criteria may be entitled to additional savings.

This is good news for Medicare beneficiaries with chronic conditions — many of whom make quality-of-life sacrifices to afford their medications or deplete their retirement savings. Those who cannot afford the costs of their recommended treatments often skip or split dosages. Others simply do without vital drugs and therapies.

These practices are particularly alarming as they can have very negative consequences, including death. Even when not fatal, ignoring a treatment regime often can further exacerbate a chronic condition, resulting in emergency-room visits and other preventable procedures. Treating a neglected condition after the fact can prove extremely costly for the patient as well as our public-healthcare system. On the other hand, by ensuring continued access to necessary medications, the new Medicare Part D program can have additional benefits in terms of promoting better health and avoiding unnecessary spending.

I found this in the Times-News:

Tennessee Attorney General Paul Summers has issued a warning to seniors who are considering signing up for a Medicare Part D prescription drug plan: Beware of scams.

“Never give out personal identifying information - medical or financial - unless you know who you are talking to and are sure that the company is approved by Medicare,” Summers said.

Various scams have been popping up across the United States since the Part D benefit was introduced in November, according to Sharon Curtis-Flair, communications director for the attorney general’s office.

“You have some who are legitimate companies that want to sell you a plan that’s not approved (by Medicare). Or it could be even worse - they might just be con artists who are trying to get your personal information so that they can tap into your bank account or open credit in your name,” she said. “They’re not supposed to be calling you up or offering cash or pretending that if you don’t sign up with them, you’re going to lose your benefits.

“The main thing to keep in mind is to check and make sure that it’s a Medicare-approved prescription drug plan. You can do that through the medicare.gov Web site or by calling (800) 633-4227.”

Summers offered these tips to help protect yourself or someone you love from falling victim to a scam:

• Check the list of Medicare-approved prescription drug plans.

The list of approved plans and other information is available at www.medicare.gov or by calling (800) 633-4227 (TTY users call 877-486-2048).

There is also a list of plans in the 2006 “Medicare and You” packet.

Medicare prescription drug plans, which are offered by private companies and organizations, must meet specific standards set by the federal government and must be approved by the U.S. Centers for Medicare and Medicaid Services.

• Guard your personal information from identity thieves posing as salesmen.

Legitimate plans may ask for your Social Security number, but only when you are actually enrolling. They may only ask for credit card or bank account information if you are arranging to have payments for your drug plan automatically withdrawn from that account.

• Beware of fear tactics.

If someone tells you that you must join a drug plan or else you will lose your other Medicare benefits, you have probably encountered a scam.

• Know the law on how Medicare prescription drug plans can be marketed.

It is illegal for companies or organizations marketing Medicare drug plans to come to your door uninvited or to send you unsolicited e-mails. Companies and organizations can call to promote their drug plans, but it’s illegal for them to sign people up during those calls.

They also must obey telemarketing laws - it is illegal for them to call people whose numbers are on the national “do not call” registry or people who have asked not to be called again. They are also not allowed to call before 8 a.m. or after 9 p.m.

For more information about your telemarketing rights or to put your phone number on the “do not call” registry, visit www.donotcall.gov or call (888) 382-1222. To put your number on Tennessee’s “do not call” registry, call the Tennessee Regulatory Authority at (800) 342-8359 or visit www.tennessee.gov/tra.

• Beware of plans that come with strings attached.

Companies and organizations are allowed offer modest prizes or gifts (but not cash) to promote their Medicare prescription drug plans, but it is illegal to require anyone to join a drug plan in order to get a prize or gift.

• Do not be fooled by sales materials that look like they are from the government.

Only private companies are authorized to offer the plans, not government agencies.

• Report suspected Medicare drug plan scams.

Call the office of the inspector general in the Department of Health and Human Services at (800) 447-8477 (TTY users call 800-337-4950). You can also report suspected fraud by sending an e-mail to HHSTips@oig.hhs.gov or by writing to Inspector General, HHS; Attention: Hotline; 330 Independence Ave. SW; Washington, DC 20201.

Its sad that medicare scams occur, but sadly they do. Make sure that you read through these tips thoroughly and be wary of all drug plans.

This is from MarketWatch:

Text of President Bush’s radio address for Feb. 11, 2006

THE PRESIDENT: Good morning. Today I want to talk to you about the new Medicare prescription drug coverage that went into effect on January 1st of this year.

When I came into office, I found a Medicare system that was antiquated and not meeting the needs of America’s seniors. The system would pay tens of thousands of dollars for a surgery, but not a few hundred dollars for the prescription drugs that could have prevented the surgery in the first place. So working with Congress, we passed critical legislation that modernizes Medicare, provides seniors with more choices, and gives seniors better access to the prescription drugs they need.

Since the program went into effect six weeks ago, more than 24 million people with Medicare now have prescription drug coverage, and hundreds of thousands more are enrolling each week. The competition in the prescription drug market has been stronger than expected and is lowering costs for taxpayers and seniors alike. This year, the Federal government will spend 20 percent less overall on the Medicare drug benefit than projected just last July. The average premium that seniors pay is a third less than had been expected — just $25 per month, instead of $37 per month. And the typical senior will end up spending about half of what they used to spend on prescription drugs each year.

Despite early challenges, the results so far are clear: The new Medicare prescription drug plan is a good deal for seniors. If you’re a Medicare recipient and have not yet signed up for prescription drug coverage, I encourage you to review your options and choose the plan that is right for you. Americans who have parents on Medicare should encourage and help them to sign up. Citizen groups, faith-based organizations, health professionals, and pharmacies across America are working to help answer questions. Seniors can also get information 24 hours a day by calling 1-800-MEDICARE or by visiting the official Medicare website at Medicare.gov.

Prescription drug coverage under Medicare has been available for just a few weeks, but its benefits will last for decades to come. I was proud to sign this Medicare reform into law. And because we acted, millions of American seniors are now saving money, getting the life-saving drugs they need, and receiving the modern health care they deserve.

Thank you for listening

President Bush’s radio address has answered many of the questions about the new Medicare reforms and hopefully will convince many of the seniors questioning the new system to sign up for the benefits they deserve.

From United Press International:

If a senior enrolls in a prescription drug plan for Medicare Part D before the 15th day of a month, the process is more likely to go smoothly, officials said.

A beneficiary, who enrolls after the 15th of the month may need to spend extra time at the counter working details out, said the Centers for Medicare & Medicaid Services, an arm of the U.S. Department of Health and Human Services.

CMS recommends that Medicare beneficiaries get an acknowledgement letter or confirmation letter from prescription plan they join, after the plan has processed their enrollment applications.

The agency also suggests bringing that letter to a pharmacy when getting a prescription filled — at least until seniors receive their membership cards.

For seniors who have yet to receive a letter, the CMS recommends bringing one of several items to the pharmacy — a welcome letter from the plan; an enrollment confirmation number; or a copy of an enrollment application signed by a plan representative.