030-2006 Governor Extends Emergency Drug Coverage

CDCAN
CALIFORNIA DISABILITY COMMUNITY ACTION NETWORK
DISABILITY RIGHTS NEWS REPORT
#0030-2006 March 19, 2006 - Sunday
Advocacy Without Borders:
Connecting people with disabilities & seniors to rights and unified action
1225 8th Street Suite 480 - Sacramento, CA 95814 916/446-0013 Fax: 916/446-0026
Marty Omoto - director email: martyomoto@rcip.com    website: www.cdcan.us

Medicare Part D Drug Program Crisis
* GOV. EXTENDS EMERGENCY DRUG PROGRAM TO APRIL 16
* URGES FEDERAL GOVERNMENT TO PROVIDE NEEDED DATA
* REQUESTS FEDERAL FUNDING FOR EMERGENCY COSTS
* CRISIS LIKELY IN APRIL DUE TO DRUG PLAN CHANGES
* THOUSANDS OF PEOPLE WITH DISABILITIES/SENIORS IMPACTED

SACRAMENTO - Citing concerns of another likely crisis largely resulting from changes to the Medicare Part D Prescription Drug Plan due to occur in early April, Gov. Arnold Schwarzenegger extended the State's emergency drug coverage until April 16, 2006 and also urged the federal government for help in resolving problems caused by the new federal drug program. State officials and advocates advise that persons with disabilities or seniors in need of medications and who are eligible for both Medi-Cal and Medicare should bring their Medi-Cal card and Medicare drug card or Medicare acknowledgment letter to the pharmacy or direct the pharmacy to review the latest (March 17) Medi-Cal Provider Bulletin. Advocates across the State praised the Governor's action.

The Governor's action, authorized under SB 1233 and announced on Friday, March 17, ensures that over 1 million persons with disabilities (including persons with developmental disabilities) and seniors who are dually eligible for Medi-Cal and Medicare will still be able to obtain needed medications under the new federal Medicare Part D Drug Program that began January 1, when the federal government took responsibility for prescription drug coverage for that population in California and across the nation. The transition of these individuals to federal Medicare drug plans in just one day resulted in an error rate of 20% impacting over 200,000 persons with disabilities and seniors in January.

SB 1233 Gives Governor Authority To Extend Emergency Drug Program
SB 1233 provides temporary relief to tens of thousands of persons with disabilities and seniors by extending the emergency program originally established by the Governor through an executive order he issued on January 12, and later extended in January by the passage of AB 132, which expired on February 11. SB 1233 does the following:
* Continues the emergency drug coverage program the state originally established on January 12 through February 15. Provides the Governor with the authority to extend it further with additional 30 day extensions each, but not beyond May 16, 2006 (unless new legislation extends it beyond that date), which has done twice so far, including his action on March 17.
* Authorizes the Governor and the California Department of Health Services to be the "payer of last resort" for persons who are dually eligible for Medicare and Medi-Cal and unable to get their medications through the Medicare program to ensure no person who is dual eligible leave the pharmacy without their needed prescription drugs.
* This means that pharmacies who are participating in the Medi-Cal or Medicare drug programs are required to fill prescriptions, and will be paid for medications under the emergency drug coverage program. This means that people who are dually eligible for both Medi-Cal and Medicare who need the medications can receive it, even if there names do not show up on the Medicare computer program, or their plan or the price of the medications is not correct.
* Continues authorization for the Department of Health Services to spend up to the $150 million cap in state funds, originally authorized in AB 132, for the purpose of the emergency drug coverage program and to seek reimbursement from the federal government..

A new Medi-Cal provider bulletin was issued on Friday, March 17 by the California Department of Health Services and is available at the official Medi-Cal website at http://www.medi-cal.ca.gov OR visit the CDCAN website at www.cdcan.us for a copy of the latest Medi-Cal bulletins, or see the special CDCAN Bulletin issued Sunday (March 19).

Hundreds of Thousands of People With Disabilities & Seniors Impacted
* In mid-January, the California Department of Health Services, which oversees the state's Medicaid program (called Medi-Cal) estimated that over 200,000 of the State's 1 million persons with developmental or other disabilities and seniors who are dually eligible for both Medi-Cal and Medicare, were unable to obtain their needed medications or had significant problems - an error rate by the federal government of over 20%.
* The State says that most of these people have received their medications through the emergency drug coverage program.
Adding to that number, at the beginning of each month (February 1, March 1, April 1, etc), the number of Californians who could be impacted by the Medicare Part D Drug Program crisis increases by 10,000 persons with disabilities and seniors who are newly eligible for both Medicare and Medi-Cal. These newly eligible persons are likely to experience problems due to backlog by the federal government and/or by the eight designated drug plans in California.
* As of January 19, 2006, the State had filled 77,514 prescriptions under the emergency drug plan.
* As of January 25, 2006, the State had filled 141,211 prescriptions at a cost of $11.4 million
* As of February 8, 2006, the State had filled 278,929 prescriptions at a cost of $20.3 million in state general fund dollars.
* As of March 16, 2006, the State had filled 585,864 prescriptions for 190,846 people who are eligible for both Medi-Cal and Medicare with at a cost of nearly $39.7 million under the emergency drug coverage plan (the cost being reimbursed by the federal government).

Important Note: people and organizations impacted by this emergency drug coverage extension, including people with disabilities and seniors, their families, pharmacies, regional centers, community based organizations and others should pass on the information of the extension and print out or tell the pharmacy to print out the latest official Medi-Cal provider bulletin that will explain the details of the extension. A new provider bulletin was issued March 17 and can be found at the official Medi-Cal website:
http://www.medi-cal.ca.gov OR visit the CDCAN website at www.cdcan.us for a copy of the latest Medi-Cal bulletins.

GOV RAISES MAJOR CONCERNS OF NEW CRISIS IN APRIL IF EMERGENCY DRUG COVERAGE ENDS
The Governor in his letter, dated March 17, to US Department of Health and Human Services Secretary Michael Leavitt requested extension to at least April 16, of federal funding to reimburse California for the cost of the emergency drug coverage program, warning of several factors - including new changes to the Medicare Drug Program scheduled to occur on April 1, that will have major impact to tens of thousands of people with disabilities and seniors who are eligible for both Medicare and Medi-Cal.

The Governor said he was concerned about the "convergence of these factors may cause an increase in problems in April.
"The normal problems that occur on the first of the month would be combined with problems caused by the end of the transition period, the shifting of people out of multiple plans and the end of the Medi-Cal 100 day drug supply," said the Governor in his letter to Leavitt adding that "For these reasons, I believe April 1, 2006, is the wrong time for California to end its emergency program and I am requesting the federal government continue reimbursing California for its emergency program beyond that date."

The Governor also complained of the lack of information coming to the states - and California specifically, from the federal Centers on Medicare and Medicaid Services (CMS), that the US Department of Health and Human Services oversees and urged Secretary Leavitt to work to provide the needed data to help resolve the current crisis - and to avoid new problems in April.

The problems and concerns that could have major impact to people with disabilities and seniors who are dually eligible for both Medi-Cal and Medicare (including thousands of people with developmental disabilities, mental health needs, persons with traumatic brain and other injuries) at the end of March and early April are:

100 DAY SUPPLY & TRANSITION PERIOD FOR "NON-FORMULARY" DRUGS ENDING
* In December 2005, at the recommendation of the federal Centers on Medicare and Medicaid Services, the California Department of Health Services allowed persons with disabilities and seniors who were eligible for both Medicare and Medi-Cal to get a 100-day supply of drugs to cover them during the transition, which will begin to run out by the end of March.
* In addition to that, on April 1, the Medicare Part D Drug Program plans will end their transition period for existing dual eligibles. This transition period has allowed persons with disabilities and seniors (who are eligible for both Medi-Cal and Medicare) to continue to receive their current non-formulary (or approved list) medications while the new Medicare Drug plans were able to assess the need for their current medications or transition them to new medications.
Problem By April 1 for Persons Eligible for Both Medi-Cal and Medicare:
* The 100-day supplies will begin to run out at the end of March - impacting thousands of people with disabilities and seniors (they will be able to obtain medications under the State's emergency drug coverage however, though the State has no commitment yet from the federal government to cover those costs. .
* With the transition period ending on April 1, persons who are eligible for both Medi-Cal and Medicare and who have not completed the process with their doctor of either switching to a formulary-covered drug or getting approval of a non-formulary drug, will have problems accessing their medications. The California Department of Health Services says that no data has been provided by the federal government (Centers on Medicare and Medicaid) to any state on how well this process has worked or how many people have used it - information that the Governor has requested in his letter to the US Health and Human Services Secretary on Friday (March 17).

TRANSITION PERIOD FOR PERSONS MISTAKENLY ENROLLED IN MULTIPLE DRUG PLANS
* Reportedly, April 1, 2006, is the date when the federal Centers on Medicare and Medicaid Services (CMS) intends to correct the problem of people who are enrolled in multiple drug plans.
* Beginning on this date people will only be able to get their prescriptions from "their plan of record" though it is not clear, according to State officials, how this will done
Problem By April 1 for Persons Eligible for Both Medi-Cal and Medicare:
* Many people are likely getting their critically needed prescription drugs from the wrong plan and many may have gone through the exception process with the wrong plan.
* Advocates and State officials fear that people could temporarily lose their coverage - which is another reason cited for continuing the state's emergency drug coverage.
* The Governor and California Department of Health Services officials have asked the federal Centers on Medicare and Medicaid for information on how this problem is going to be corrected. As of March 17, State officials report that the federal government has not provided the State with any information regarding this problem, how a transition will be implemented or even how many people in California will actually be impacted.

CAPACITY OF FEDERAL GOVERNMENT TO HANDLE CASELOAD AND PROBLEMS
* State officials say they have "insufficient information" from the federal government on the capacity of the federal Centers on Medicare and Medicaid staff to handle increased caseloads that is likely to result if California terminates its emergency drug coverage program and shifts up to 10,000 prescription problems a day for resolution by the federal government.
* State officials (and advocates) say that the long time lag and problems for persons who are dually eligible for both Medi-Cal and Medicare and are new enrollees and those people who are dual eligibles who change plans will continue.
Problem By April 1 for Persons Eligible for Both Medi-Cal and Medicare:
* Both advocates and State officials say that persons who are enrolling for the first time, or are changing drug plans have been told - and will likely to be continue to be told that they must pay high co-pays or deductibles because their low income subsidy information is not accessible by the pharmacist trying to fill their prescription.   Also, due to these problems, at the beginning of each month, according to the California Department of Health Services, the State sees a significant increase in the numbers of people with disabilities and seniors who need the emergency drug coverage program.
* The Governor in his letter to the US Department of Health and Human Services complained that California has asked for "more detail" on the federal Centers on Medicare and Medicaid Services' capacity to handle increased caseloads on "numerous occasions" without result.
* State officials - and advocates have raised major concerns about the ability of the federal government (and the 8 drug plans that cover persons dually eligible for Medi-Cal and Medicare in California) to effectively respond to the likely dramatic increase in problems in April if California ends its emergency drug coverage program.
* Ending the emergency drug coverage program would have a significant impact on the eight drug plans in California that over 1 million persons dually eligible for Medi-Cal and Medicare are enrolled in.

LETTER FROM GOVERNOR SCHWARZENEGGER
TO FEDERAL GOVERNMENT (SECRETARY MICHAEL LEAVITT)

March 16, 2006

The Honorable Michael O. Leavitt
Secretary of Health and Human Services
U.S. Department of Health and Human Services
200 Independence Avenue, S.W.
Washington, DC   20201

Dear Mr. Secretary,
I write today to request an extension of California's Section 402 waiver related to the new Medicare Part D Prescription Drug Benefit through at least April 16, 2006. Prior to that point, I would request that we jointly assess whether the State's waiver needs to continue beyond that date.

The Medicare drug program is working well for most people and I appreciate the Centers for Medicare and Medicaid Services (CMS) extension of California's Section 402 waiver through March 31, 2006. However, I am deeply concerned that on April 1, 2006, several events will take place that may result in significant access problems to needed medications for people who are eligible for Medicare and Medicaid. These problems may be very acute in California, where we have almost 1 million people dually eligible for Medicare and Medi-Cal, with more than 10,000 new dual eligibles coming onto the rolls each month.

As you know, on January 20, 2006, I signed legislation that established an emergency program intended to serve as the payer of last resort for individuals who are unable to receive their prescription drugs from Part D due to problems in the Medicare system. The program can be extended, at my request, through May 16, 2006. Today, I have extended the program through April 16, 2006.

Between January 12 and March 14, 2006, California's emergency program has provided 567,682 prescriptions for 188,000 different beneficiaries at a cost of $38.5 million. And while the trend in the number of prescriptions covered each day has decreased slightly from the first days of the program, the average remains around 10,000 prescriptions provided each weekday. Large numbers of these prescriptions are provided by pharmacies who specialize in services to people in nursing facilities, people with AIDS/HIV, people with mental diseases and people who require home infusion therapy.

I am not able to end our emergency program on April 1, because of the following concerns regarding disruptions in dual eligibles' access to needed medications.

1. On April 1, the Part D plans will end their transition programs for existing dual eligibles. This transition period has allowed these patients to continue to receive their current non-formulary medications while the plans were able to assess their need for there medications or transition them to new medications. Without this transition period, any one who has not completed the process with their physician of either switching to a formulary-covered drug or getting approval of coverage of a non-formulary drug will have problems accessing their current medications. No data has been provided to states on how well this process has worked or how many people have used it.

2. We understand from staff at CMS that April 1, 2006, is also the date when the federal government intends to correct the problem of people mistakenly enrolled in multiple plans. Beginning on this date people will only be able to get their prescriptions from their plan of record. While I agree that people should only be in one plan, I am concerned about the transition issues associated with this change. It is likely that many people are getting their critical medications from the wrong plan and many may have gone through the exception process with the wrong plan. California has asked for information on how this problem is going to be corrected and the plans for moving people's drug coverage from enrollment in multiple drug plans to enrollment in only their plan of record. CMS has not provided the State with any information on what is occurring in this area, how this transition will occur or even how many people are affected.

3. The enrollment lag issues related to new enrollees and people who change plans will continue, resulting in dual eligibles being told that they must pay high co-pays or deductibles because their low income subsidy information is not accessible by the pharmacist trying to fill their prescription. Due to these problems, early every month California sees an increase in its emergency drug coverage.

4. During December 2005, at CMS's urging, Medi-Cal allowed dual eligibles to get a 100-day supply of drugs to cover them during the transition. These 100-day supplies will begin to run out at the end of March.

5. The State has insufficient information on the capacity of CMS staff to handle casework that is likely to result if California terminates its program and shifts up to 10,000 prescription problems a day to CMS staff for resolution. We have asked for more detail on CMS' capacity on numerous occasions.

6. We are also concerned about the ability of drug plans to handle an increased volume of problems in April if California ends its emergency program. As compared to other states, California has a relatively small number of drug plans (eight) which cover dual eligibles. This means that nearly 1 million dual eligibles are concentrated in a handful of plans and ending our program would have a significant affect on these plans.

I am concerned the convergence of these factors may cause an increase in problems in April. The normal problems that occur on the first of the month would be combined with problems caused by the end of the transition period, the shifting of people out of multiple plans and the end of the Medi-Cal 100 day drug supply. For these reasons, I believe April 1, 2006, is the wrong time for California to end its emergency program and I am requesting the federal government continue reimbursing California for its emergency program beyond that date. The problems in the Medicare Part D implementation have been reduced, in part because of state programs like California's and our commitment to work together to provide this federal benefit. We have to ensure that we do not end the State's program at a time when a confluence of difficult transitions will occur and likely result in significant prescription access and data system problems.

In addition, I am requesting once more data that would allow California to end its emergency drug program. In response to requests for data from many states including California, CMS has provided the National Association of State Medicaid Directors (NASMD) with a draft set of selected metrics to review Medicare Part D performance.    For my State to be confident that our residents are protected, we need data from CMS that proves the systemic problems in the program have been reduced to a level where CMS staff and the Medicare plans have the phone and staff capability to quickly resolve any remaining problems. At this point we have not been provided with sufficient data to assess program and plan performance in critical areas. Without this data, it will be nearly impossible for California or your Department to make an informed decision as to when the State should discontinue its emergency program.

I believe that our drug program should be used only as the payer of last resort. To assist both CMS and the State in assessing the need for the State's program, we have jointly agreed to review program usage by pharmacies in California.

I appreciate your willingness to work with me to assure that California is fully reimbursed for our efforts to protect our most vulnerable beneficiaries. I encourage you to extend the deadline through at least April 16, 2006, or longer as needed to ensure the problems I have identified are resolved. I intend to continue to work cooperatively with you to ensure the nearly one million Californians who are dually eligible for Medicare and Medi-Cal have access to the prescription drugs that are essential to maintaining their health.

Sincerely,
Arnold Schwarzenegger

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