State spending less on Medicare Part D

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The state hasn’t been able to spend all the money it earmarked as a supplement to the federal Medicare Part D drug insurance program – a surplus Democrats worry is a sign some people may not be getting the medications they need.

Republicans say the federal drug benefit may be working better than predicted and question why the state wants to encourage people to take money they don’t need.

Jude Walsh, the head of drug benefits for the Baldacci administration, said money is just sitting in state accounts waiting to be used to help people with their co-pays and deductibles under Medicare Part D.

“We’re sitting on money here that’s not getting out,” Walsh told the Health and Human Services Committee recently.

Legislators approved $11 million to help seniors who originally were in the Drugs for the Elderly (DEL) program and now are enrolled in Medicare Part D. There are an estimated 30,000 seniors, with incomes up to 185 percent of the federal poverty guideline – or $1,475 a month for an individual and $1,980 for a family of two – who made the switch to the federal program with the state’s help.

Maine is paying their $25 to $30-a-month premium and also helping them with co-pays and deductibles, with the goal of having no senior pay more for their drugs under the federal program than they were under the state’s DEL plan.

But for a number of reasons, the plan isn’t working.

Walsh said that up until June, only 37 percent of the claims they expected were being processed by the state. When the benefit was expanded to help pay for generic drugs instead of the more expensive brand names, the percentage went up to 58 percent, but Walsh is still worrying.

“We are really trying to help people,” Walsh said, but the claims aren’t coming in as predicted. She said “millions” were sitting in the drug account, but couldn’t pinpoint how much was surplus because money is owed for premium bills that haven’t yet been sent to the state by the insurance companies offering Medicare Part D coverage. The federal government contracted out the program to private companies.

Part of the problem is not all pharmacies are billing the state for the supplemental payment or so-called wrap around the insurance offered through the federal government.

Walsh blames the federal government, saying their system has been so slow to come up to speed that pharmacists don’t know what the primary Medicare Part D payer is covering and what they should be billing to the state.

And, Walsh fears that without the state supplement, some people are simply not buying their medications.

“There are people out there, based on looking at our claims, who I feel are not getting their drugs at all,” Walsh said, because they’re being frightened off by the high deductibles and co-pays.

Rep. Darlene Curley, R-Scarborough, who heard Walsh’s presentation at an Appropriations Committee meeting in June, countered the lack of claims may prove the federal system is covering the need.

“Could it be that Medicare Part D is working?” Curley asked Walsh. “The reduced claims may be an indicator of something working.”

There was little question the system wasn’t working as intended in the first four months of this year when states found their poorest seniors, who were supposed to be seamlessly transferred from state-run Medicaid plans to federal Medicare Part D on Jan 1, weren’t able to get their drugs at subsidized prices.

In Maine’s case, 42,000 seniors enrolled in Medicaid were supposed to be transferred on Jan. 1 along with the 30,000 in the Drugs for the Elderly plan the state decided to enroll. Maine and other states had to step in and pay for drugs while computer glitches were worked out.

Since then the system has improved, proponents say, and drug coverage is now available to all seniors, including those who weren’t eligible based on their income for government-sponsored insurance before.

“We’re beginning to see it work,” Curley said. “This is a major benefit for our senior citizens,” with more than 120,000 now eligible for a benefit not available until Medicare Part D went into effect.

Pharmacists agree the system is getting better, but are divided on who is to blame for problems with the state’s supplemental wrap.

Doug Carr, a spokesman for Rite Aid in Maine, said Walsh was right to blame the federal government’s system for making the state wrap more difficult to use.

“The (federal) data we were getting was so incomplete and inaccurate,” Carr said, that Rite Aid pharmacists couldn’t bill the state electronically for its supplemental coverage, and instead had to do it by hand. Since Rite Aid is the largest chain in the state, those cumbersome filings could be one reason why the claims being filed with the state are so low.

Carr does not, however, believe as Walsh does that people are going without their medications.

“I don’t know that there are as many people walking around without their medications as she may believe,” Carr said. “I have a feeling some people may have bought their drugs and may have done without something else.”

Joe Bruno, the former minority leader in the House and head of the Community Pharmacy chain of drugstores, said the problem with the state’s supplemental coverage is not the federal government, but the state plan itself.

“The state made it very complicated to do,” Bruno said. “It wasn’t well explained from the very beginning.”

Pharmacists must first bill the Medicare Part D insurance provider and then turn around and bill the state for secondary reimbursements and be charged a five to 10-cent fee for each billing per prescription, on already very slim margins, he said.

While Bruno said his pharmacists are doing the secondary billing, he understands why others are not.

As for blaming the federal government for the problem, Bruno said, “that’s more the political answer.”

“I think it’s going pretty well right now,” he said of Medicare Part D. “The state got involved early on and confused a lot of things. Our experience was through March or April, things started to smooth out.”

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