Governor Expresses Continued Concern with Federal Medicare Part D Implementation

Governor Expresses Continued Concern with Federal Medicare Part D Implementation

Governor John Baldacci has written to President George W. Bush to express his continued concerns with implementation of the federal Medicare Part D prescription drug program. The Governor noted that problems with the program still exist, costing the State more money and leaving vulnerable seniors at risk. He asked that the President share with the State a plan of correction for problems currently being experienced and assurances that Maine and other states will be fully reimbursed by the federal government for the costs incurred in ensuring citizens retain critical benefits to which they are entitled.

The text of the letter the Governor sent to the President follows.

President George W. Bush

The White House

1600 Pennsylvania Avenue N.W.

Washington, D.C., 20500

Dear Mr. President:

I am writing to you to express serious concerns regarding the operations of the Medicare Drug Benefit. More than four months after the start-up of this benefit, many low-income Maine residents remain unable to obtain their drugs through Medicare Part D. This problem, which arises from difficulties in the Medicare Part D system, is imposing a growing financial and administrative burden on Maine and other states which have found that they must step into the breach to meet the needs of low-income residents who require prescription medications.

I met with Secretary Leavitt earlier this year about some of these difficulties and felt that we had a productive meeting. While I appreciated our meeting, many systems issues remain unresolved. I have included some examples below of the types of problems that persist:

Enrollment of members by the Centers for Medicare and Medicaid Services (CMS) is not timely. In many cases, full enrollment can take from 6 to 8 weeks. Although Medicare may deem these members eligible within 2 weeks, their eligibility for the Low Income Subsidy typically is not recognized until weeks later. The result is that low-income members are charged deductibles and high co-pays that they cannot afford.

Maine has stepped in to provide a safety net for this situation by covering the costs of drugs during these periods. However, CMS has refused to reimburse for these costs incurred after March 31, 2006, despite the fact that these costs should be borne by Medicare Part D.

Lack of LIS information is a basic system problem that needs to be corrected by CMS, and the states need to continue to be reimbursed until this problem is resolved.

Additional problems result when a member becomes disenrolled from one plan and enrolled in a new plan. In such cases, enrollment does not occur as readily as disenrollment, and the result is a significant gap in coverage. Maine has needed to pay for Medicare Part D members' drugs when this happens. This problem occurs frequently, particularly for dual eligible members who are permitted to switch plans monthly. The cost to Maine is significant. Again, CMS has refused reimbursement for costs incurred after March 31, 2006.

When members switch among plans, Medicare Part D is not properly tracking the true out of pocket costs of members. As you are aware, a significant benefit of Medicare Part D is to cover 95 % of the cost of members' prescription drug needs once the member has paid $3,600 out of pocket. Because of poor tracking when members switch plans, the payments made by the State or the member for prescription drugs are not being counted toward accessing this catastrophic coverage. This also means that the State or the member may be charged two annual deductibles instead of one.

Enrollment problems also loom because of the May 15, 2006, enrollment deadline. Maine has tried since February to enroll 6,000 residents who are members of Maine's Pharmacy Assistance Program (SPAP). As of this date, Maine still has not received confirmation from CMS that it has validated these enrollments with the relevant Part D plans.

If confirmation does not occur by May 15, it will be too late to enroll these residents in Part D for this year, and they will be without Medicare Part D coverage until January 2007. Maine also will be charged a 1% premium penalty per month, despite our attempts for months to enroll these members. In addition, providing prescription drugs to this population until the 2007 enrollment in Medicare Part D will be a cost incurred by Maine, which Maine could not have anticipated.

Since eligibility for reimbursement from CMS to Maine ended on March 31, Maine has continued to spend more than $100,000 per week for Maine residents who cannot access their Medicare Part D benefits. Effective May 1, CMS actually disenrolled from plans more than one million people nationally who were enrolled in more than one Medicare Part D plan. Unfortunately, some members were disenrolled from the plan that provided the better benefits. Maine had approximately 20,000 residents enrolled in more than one plan, and we have witnessed a significantly increased need for State assistance since these disenrollments and have received numerous calls from members about this problem as well.

On a positive note, Maine appreciates the commitment of CMS, under a granted waiver, to reimburse the State for its administrative costs incurred from these problems through June 30, 2006. However, Maine has not received any indication when it may expect to receive that reimbursement.

I appreciate the hard work of Secretary Leavitt and the staff at CMS. We have been working collaboratively to assist them with identifying and resolving problems. However, a plan of correction for these problems with specific timelines urgently needs to be developed and shared, and implemented within the next 30 to 60 days.

Indeed, Maine and other states deserve continued full reimbursement from CMS for meeting the needs of Medicare Part D members that the program itself should be providing. The State of Maine cannot continue to absorb a financial burden due to continued federal system glitches within Medicare Part D.

I look forward to hearing from you on this important matter. Thank you.

Sincerely,

John E. Baldacci, Governor

State of Maine

Cc: Michael O. Leavitt, Secretary, U.S. Department of Health and Human Services

Steven Rowe, Attorney General, State of Maine

Mark McClellan, M.D., Director, Centers for Medicare and Medicaid Services

Dennis Smith

Charlotte Yeh, M.D.

U.S. Senator Olympia Snowe

U.S. Senator Susan Collins

U.S. Representative Thomas Allen

U.S. Representative Michael Michaud

Trish Riley, Director, Governor's Office of Health Policy and Finance

Jude Walsh, Special Assistant, Governor's Office of Health Policy and Finance

Brenda Harvey, Commissioner, Maine Department of Health and Human Services

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