Last week, Pallone sent a letter to the 19 insurance companies that offer prescription drug plans in New Jersey, requesting specific information on the role they played in the implementation of the new benefit and what went wrong.  (PALLONE'S LETTER FOLLOWS)

Two years ago Pallone opposed the Republican prescription drug law because it did not provide a defined benefit to seniors within the Medicare system. He instead supported legislation that would create a drug plan provided directly by Medicare rather than private insurance companies and allow the Secretary of Health and Human Services to negotiate lower prescription drug prices for Medicare beneficiaries.

(THE FOLLOWING LETTER WAS SENT FROM U.S. REP. FRANK PALLONE, JR. TO THE 19 COMPANIES IN NEW JERSEY THAT ARE CURRENTLY OFFERING A PRESCRIPTION DRUG PLAN TO NEW JERSEY SENIORS.)

January 18, 2006

I am writing to express my concern regarding implementation of the Medicare prescription drug benefit, and the particular impact it has had on low-income seniors and individuals who are disabled in New Jersey.

As you know, since January 1, 2006 there have been numerous reports that Medicare beneficiaries have been unable to access much needed medications.  In many instances, beneficiaries who tried to have their prescriptions filled for the first time under the new system were told that their enrollment could not be verified, their drugs were not covered, or they would be charged larger co-payments or deductibles than they could afford.  As a result, a number of New Jersey beneficiaries - particularly those dually eligible for both Medicare and Medicaid - were faced with major disruptions in service. 

This is particularly troubling considering the vulnerability of this unique population.  Dual-eligible beneficiaries are significantly poorer and tend to have far more extensive health care needs than other Medicare beneficiaries.  Dual eligibles are more likely to suffer from chronic conditions such as heart disease, pulmonary disease, and diabetes. They are also more likely to be disabled, at least 85 years old, and suffer from cognitive impairments.  Accordingly, preserving access to prescription drugs for these individuals is of vital importance. 

Fortunately, many states, including New Jersey, have taken steps to ensure that Medicare beneficiaries - especially dual eligibles - are receiving the medications they were promised under the new Medicare prescription drug benefit.  To date, New Jersey has spent nearly $15 million (approximately $1 million per day since the benefit began) in order to fill this unanticipated gap in coverage.  This responsibility should have never fallen upon New Jersey, or the many other states that were forced to take similar action.  

Since passage of the Medicare Modernization Act of 2003, many people on both the state and federal level worked hard to ensure a seamless transition for dual eligibles into Medicare Part D.  As roll out of the new prescription drug benefit approached, the Centers for Medicare and Medicaid Services (CMS) - whose responsibility it was to implement the new benefit - assured Members of Congress and many state officials that they had taken all the necessary steps "to ensure continuity of prescription drug coverage and care for the dual eligibles." 

Specifically, CMS required each Medicare prescription drug plan to establish an appropriate transition process for all new enrollees, including dual eligibles.  These transition plans were to include at least a one-time fill of a prescription drug excluded from the plan's formulary in order to accommodate situations in which a beneficiary tries to have a previous prescription filled that is not covered by the PDPs formulary.  Furthermore, CMS implemented a process to enroll those dual-eligibles not already auto-enrolled and allow them to still walk away from the pharmacy with their prescriptions. 

In spite of these assurances, it is clear that many dual eligibles still fell through the cracks.  As the primary agency responsible for implementing the new benefit, CMS should bare most of the blame for not adequately ensuring a seamless transition.  However, it also appears clear that the private prescription drug plans which CMS contracted with to provide prescription drug coverage should also shoulder some of the blame.  In order to better understand why this situation occurred and assess what steps are being taken to rectify it, I respectfully request that you provide my office with the following information: 

·         Prescription drug plans were required by CMS to have transition policies in place to ensure dual eligible beneficiaries could access their first prescriptions when transitioning to a PDP. What were the details of the transition policy your organization agreed to establish? Can you provide my office with a copy of this policy? 

·         Did your organization appropriately execute the agreed upon transition policy and uphold the "first-fill commitment"?

·         How many first fill prescription drug claims were covered under your transition policy during the reference period: January 1 - January 17, 2006? 

·         How many dual eligibles in New Jersey has your organization enrolled via the Wellpoint Point of Sale (POS) process since January 1, 2006?

·         What steps did your organization take to adequately prepare for roll out of the new drug benefit?  Did you employ additional customer service representatives to answer questions from pharmacists and beneficiaries?  If so, what kind of training did these representatives receive? 

·         The Centers for Medicare and Medicaid has indicated that PDPs must reimburse states the amount that the plan would have paid, had the plan adjudicated the claim first. What steps are you taking to reimburse New Jersey for the cost it has incurred in providing emergency prescription drug coverage since January 1, 2006?

           I have asked these questions of every organization that offers a stand alone PDP in New Jersey.  If you should have any questions, please do not hesitate to contact me.  I look forward to your timely response.

                                                Sincerely,

                                                Frank Pallone, Jr.

                                                MEMBER OF CONGRESS