$2.4B Budget and IT Overhaul Weren't Enough

By Deborah Gage Print this article Print

Computer snafus and general confusion over a new drug benefit plan are causing major headaches for senior citizens.

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."

This article was originally published on 2006-01-11
Senior Writer
Based in Silicon Valley, Debbie was a founding member of Ziff Davis Media's Sm@rt Partner, where she developed investigative projects and wrote a column on start-ups. She has covered the high-tech industry since 1994 and has also worked for Minnesota Public Radio, covering state politics. She has written freelance op-ed pieces on public education for the San Jose Mercury News, and has also won several national awards for her work co-producing a documentary. She has a B.A. from Minnesota State University.

eWeek eWeek

Have the latest technology news and resources emailed to you everyday.