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Final Medicare Drug Rules Issued; Advocates Still Troubled

  • January 27th, 2005

The Department of Health and Human Services has released the final rules that will govern the new Medicare prescription drug benefit.

A little-known fact about the new Medicare law is that some 6.4 million low-income Medicare beneficiaries -- including most nursing home residents -- will lose their Medicaid prescription drug coverage when the new Medicare drug program begins January 1, 2006. Although their coverage is supposed to be picked up by Medicare, millions could have life-threatening lapses in coverage because of bureaucratic requirements and differences in the specific drugs the two programs cover.

The final rules address several concerns that were raised by groups during a public comment period. Among these are how the program will handle the transition for beneficiaries living in nursing homes and other Medicare beneficiaries who currently receive their drug coverage under Medicaid.

Long-term care experts have expressed grave concern that the new Medicare drug program will be unworkable for most of the 1.5 million Americans who live in nursing homes, most of whom receive drug coverage through Medicaid. (See "Medicare Drug Law Could Create Havoc in Nursing Homes." ElderLawAnswers, Dec. 6, 2004.)

A chief worry was that the new program provided no role for the specialized long-term-care pharmacies that now supply nursing homes with drugs and that know the special needs of nursing home residents, many of whom receive medications through feeding tubes. Under the final rules, all prescription drug plan providers will contract with long-term care pharmacies, enabling residents and the nursing homes that care for them to continue doing business with the same pharmacies. The Department of Health and Human Services says that nursing home residents enrolled in a Medicare drug plan "will continue to get the drugs their doctors say they need" -- presumably even those not listed on Medicare's roster of approved drugs, called a formulary.

But beneficiary advocates are not reassured about the final rules for handling the bureaucratic hand-off of the 6.4 million low-income Medicare beneficiaries (including nursing home residents) who now receive their drug coverage through Medicaid.

According to the newly issued final rules, Medicare will automatically enroll those who qualify for both Medicare and Medicaid '“ known as "dual eligibles" -- in selected drug plans during the first half of 2005, and give them the option of changing plans before the full drug benefit becomes available in 2006.

But the Medicare Rights Center, a beneficiary advocacy group, calls this plan "a train wreck waiting to happen." In a recent study, the Center concluded that millions of dual eligibles are at risk of not being able to get their medications because they will not know that their coverage has changed or understand the new benefits. The Center warns that the final rules do not adequately address the prospect that millions of dual eligibles will fall through the cracks.

"The systems are not, and will not be in place to maintain consistent drug coverage for the most vulnerable Americans," said the Center's president, Robert M. Hayes. Unless the rules are improved, he said, "millions of Americans in great need will face needless illness, suffering and a greater risk of premature death."

The Center recommends that dual eligibles who need their Medicaid coverage or drugs not included in Medicare's formulary after January 1, 2006, be allowed to continue them for six months to a year.

For a summary of the final rules prepared by the Kaiser Family Foundation, click here.

For Medicare Fact Sheets on the new rules, including "Principal Changes in New Medicare From Proposed Rules to Final Rules," click here.

For the final rule itself, click here.

For the Medicare Rights Center study, The Medicare Low-Income Drug Subsidy: Strategies to Maximize Participation, click here.

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Needham Mitnick & Pollack, PLC
Falls Church, VA

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Hale Ball Carlson Baumgartner Murphy PLC
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Daniel N. Steven, LLC
Rockville, MD


Last Modified: 01/27/2005

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