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GAO Issues Medicare Part D Report and Statement


Email Alert

May 10, 2007

Report on Challenges in Enrolling Dual Eligibles

On May 9, 2007, the Government Accountability Office (GAO) issued a Report on the results of its study of the challenges in identifying and enrolling new dual eligible beneficiaries in Medicare Part D prescription drug plans (PDPs). Among other findings, the GAO found that a majority of new dual eligible beneficiaries may be unable to "smoothly" access their benefits for at least five weeks after becoming enrolled in a PDP.

The GAO also found that the delay in enrollment of new dual eligibles adversely impacts pharmacies which must dispense prescription drugs without adequate information to determine accurate co-payments and which must, after the fact, interact with PDPs on coverage and claim submission issues. Additionally, the GAO found that many beneficiaries did not know they were entitled to reimbursement of their drug costs during these interval periods. Also the GAO found that Medicare had paid millions of dollars to PDPs in 2006 for coverage during periods for which dual eligible beneficiaries were not seeking reimbursement.

The GAO made six recommendations to the Centers for Medicare & Medicaid Services (CMS) to address the issues it identified in its Report. Among the recommendations, the GAO said that CMS should track the number of new dual-eligibles it enrolls each month and the number of months of retroactive coverage CMS provides to them, as well as monitor the PDP's reimbursements to them for the costs they incurred during the retroactive coverage period.

The GAO noted that CMS has taken steps to implement some of its recommendations, such as notifying beneficiaries of their right to reimbursement and monitoring the number of individuals provided retroactive coverage.

However, CMS disagreed with the GAO's other recommendations regarding the following:
  • Monitoring PDP reimbursements to beneficiaries;
  • Mitigating risks of information system changes; and
  • Facilitating states' access to certain drug-related information that could facilitate state efforts to reassign dual-eligibles to PDPs with formularies that more closely match beneficiaries' medication needs.

For additional details on the GAO's findings and recommendations, access the Report. The six recommendations are detailed on page 50 of the Report.

In addition, Kathleen M. King, GAO Director, Health Care, provided supporting testimony for the Report. Access her statement.

Statement on Medicare Part D Low-Income Subsidy

On May 8, 2007, the GAO issued a statement about the Social Security Administration's (SSA) progress in approving individuals for the Medicare Part D low-income subsidy. This is part of an ongoing study that the GAO is conducting for the Senate Finance Committee. The GAO evaluated the progress SSA has made in identifying and soliciting applications from individuals who might be eligible for the Part D low-income subsidy and how the SSA tracks its progress in administering the subsidy.

Although the SSA approved approximately 2.2 million individuals for the low-income subsidy as of March 2007, the GAO concluded that the success of the SSA's outreach efforts was difficult to measure due to the lack of reliable data. The SSA did not have access to data that would have helped it to target the eligible population. As a result, the SSA used income records and other government data to identify individuals who might be eligible for the low income subsidy, which resulted in an overestimate of the eligible population. The SSA mailed information and applications to the 18.6 million beneficiaries who it identified as potentially qualifying for the subsidy. In addition, the SSA conducted an outreach campaign at 76,000 events. The GAO also found that SSA's efforts were hindered because many individuals did not understand that the Part D prescription drug benefit and that the subsidy required separate application processes.

Although the SSA has collected data and established some goals to monitor its progress, the GAO noted that the SSA continues to lack data and measurable goals in some key areas. For example, the SSA does not track the processing time for redetermination decisions, nor does it have a performance time target for processing these decisions.

The GAO is considering recommendations for the SSA to remove barriers to implementation of the Medicare Part D low-income subsidy and to measure the success of its efforts.

Access the GAO statement.

We would like to thank Kathie McDonald-McClure (Wyatt Tarrant & Combs LLP, Louisville, KY) and Jennifer Forsyth (White and Steele PC, Denver, CO) for providing this email alert.

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