Glitchy Systems Worsen Drug-Benefit Snafus

By Deborah Gage  |  Posted 2006-01-11

As the year ended, Bonnie Burns—a training and policy specialist with California Health Advocates, a nonprofit that counsels people on Medicare—was stretched to the limit.

She was swamped with requests for help from senior citizens afraid of losing coverage for their prescription drugs under the new Medicare drug benefit, which took effect on Jan. 1, 2006.

Her own stepfather was having problems, too. In November, she couldn't figure out if the nine drugs he takes for a lung condition would be covered under his new plan.

Under the program, her stepfather and all other recipients of Medicaid—a joint federal-state program—who had been receiving their drug coverage from the states were automatically assigned to insurance companies that are supposed to be covering their drugs on behalf of the federal government.

But the Medicare Web siteand her parents' insurance plan, SecureHorizons from PacifiCare, were giving Burns conflicting information.

Burns is not alone. Across the country, seniors and those caring for them remain uncertain as to what, if any, prescription drug coverage they'll have under the new program.

On Dec. 22, 2005, the Department of Health and Human Services said 21 million people were enrolled in the plan. The program—under which, for the first time, the federal government will offer to subsidize prescription drug costs for everyone enrolled in Medicare, currently 43.1 million people—is complicated.

California, for example, offers 47 different statewide plans that cover drugs, plus 85 local plans that cover medications and other health care. Seniors and their advocates must sort through an array of choices from private insurers, whose plans differ in how much they charge, which drugs they cover and which pharmacies they allow seniors to use.

And the computers powering the program haven't helped the situation. The system has run into a number of problems, which have ranged from Web site crashes that prevented people from signing up online, to the failure to match state and federal files of beneficiaries, to the inability to display online information for beneficiaries to review.

But Peter Ashkenaz, a spokesperson for the federal CMS (Centers for Medicare & Medicaid Services), said that "the systems we have are all working, and millions of people around the country are all getting their drugs."

CMS would not say which systems handle which functions. And it's unclear what systems are at the heart of the problems, or which problems are caused by applications installed for the new program as opposed to older ones that CMS has used to shuttle information between federal and state governments, pharmacies and insurance providers.

But new glitches persist. On Jan. 2, the database used by pharmacists to see whether people are eligible for coverage so they can dispense and bill for medication was overwhelmed with queries.

So many people showed up at pharmacies that day without evidence that they were enrolled in a health plan—either with a letter acknowledging that their application had been received or an enrollment card—that the pharmacists' queries rendered the system at times unusable, according to federal contractor NDCHealth (now part of Per-Se Technologies), which administers the data repository.

In turn, pharmacists' calls to insurers and CMS to verify the customers' eligibility created backlogs on the phone lines.

Adding to the problem: As 2005 wound down, some people had switched plans, and the database didn't always reflect the changes.

Enrollment files pass electronically from the health plans to CMS to NDCHealth. And, according to Robert Borchert, a spokesperson for NDCHealth, some of the data files that the contractor received from CMS were blank except for the name, which slowed processing time.

By Jan. 6, pharmacists said they were no longer having problems accessing the database, but the Minnesota Pharmacists Association says its members are still finding information that is missing or wrong. The database has also been providing incorrect co-payments for some beneficiaries in Minnesota and other states.

Next page: A $2.4B budget and an IT overhaul weren't enough.

Borchert said NDCHealth is doing "continuous updates" to the database as it receives files from CMS. In addition, CMS on Jan. 4 set deadlines for health plans to submit missing billing data and told plans to speed up processing enrollments from the Medicare Web site. It also told plans to improve customer service.

To handle the administration of the plan, CMS, which in fiscal 2005 received an appropriation of $2.4 billion for technology investment, overhauled its information systems beginning in August to handle the rush of seniors evaluating the prescription drug plan. Enrollment began on Nov. 15, 2005.

Specifically, CMS hired Computer Sciences Corp. to update its Medicare Managed Care System, which processes transactions for 5.8 million enrollees from more than 300 health plans, but needs to handle more transactions to accommodate the 28 million to 30 million people that CMS expects will be enrolled by 2007.

Modules for processing drug claims and tracking benefits were being installed by Vips Inc., a health care business intelligence company, now part of Emdeon Corp. CGI-AMS of CGI Group Inc., Fu Associates Ltd. and Northrop Grumman Corp. have systems integration contracts for melding everything from plan enrollment to beneficiary eligibility, appeals and plan payment.

CMS said in December that it had launched eight of nine new modules, not counting the separate eligibility database. But Ashkenaz, the agency's spokesperson, would not say whether problems with the new modules were responsible for the systems problems so far. The contractors either did not respond to requests for interviews or declined to make representatives available.

The programs have been plagued by computer problems and other snafus since early fall. On Nov. 15, when sign-ups began, newspapers and TV stations around the country reported Web site outages as seniors, their relatives, health care workers, pharmacists, and volunteers staffing the 1-800-MEDICARE hot line tried to log on to www.medicare.govto compare insurance plans and determine benefits.

Because the Web site was sometimes inaccessible and had missing and incorrect information, the backlog on the phone lines grew, as it did six weeks later when the pharmacists called. The errors included that the Web site could not display consistently which restrictions—such as quantity limits—applied to which drugs, or which pharmacies offered the lowest-cost drugs, according to the Medicare Rights Center, a New York-based nonprofit.

Another problem was the system's difficulty in matching federal and state databases of beneficiaries. People on low incomes, like Burns' parents, can get extra health care coverage through Medicaid.

Members of this group—about 6.4 million people—have been randomly assigned to a Medicare Part D plan and lost their drug coverage through Medicaid on Jan. 1, 2006. But CMS' Medicaid lists have proved inaccurate. In November, at least 39,000 seniors—30,000 in Illinois and 9,000 in Massachusetts—received letters from CMS saying they'd been automatically assigned to private insurance plans even though they weren't on Medicaid, forcing the states to intervene.

Because of problems like this, the Medicare Rights Center and seven other nonprofits are seeking a preliminary injunction to stop CMS from terminating Medicaid drug coverage. In a suit filed in November against Secretary of Health and Human Services Michael Leavitt in U.S. District Court in New York, the nonprofits argued that "computer system failures" will virtually guarantee that some people whose Medicaid coverage is terminated will end up with no drug coverage.

CMS says beneficiaries will be able to get their drugs even if they don't have an enrollment card, with a third party following up on eligibility afterward.

On Dec. 29, 2005, U.S. District Judge Loretta Preska dismissed the case, a decision the nonprofits are now appealing.

Preska said she had no authority to intervene when problems in getting coverage had not yet occurred. Some states, including Vermont, have now stepped in to temporarily pay for Medicaid drugs.

Some say the confusion and computer problems are inevitable. CHA's Burns said the amount of time Congress allowed to implement the law—18 months—is too short for the government, the insurance companies and advocacy groups to be ready.

And she continues to oversee her parents' drug benefits, she said. In late December, she called her regional Medicare office and got the name of a vice president at SecureHorizons, who faxed applications and moved her parents into a plan that covers generic versions of all but one of her stepfather's drugs. Information about this plan was not on the Web site, Burns said.

She also said she still doesn't know how her parents will afford the copayment for the drugs, which is $12 a month, because their rent consumes two-thirds of their income.

Meanwhile, she is helping clients with problems as complex as her stepfather's: "I don't think a lot of adult children know this well enough to know more than what [they are told] by the plan."