Medicare Beneficiaries' Prescription Drug Purchasing Simplified Through New Technologies

CMS Awards Contract For New Systems To Coordinate Beneficiary Coverage for Prescription Drug

The Centers for Medicare and Medicaid Services (CMS) has taken another step to make it easier for Medicare beneficiaries to get prescription drugs from their local pharmacies. This action will allow pharmacists to use their existing computer systems to determine which Medicare drug plan to bill and whether the beneficiary has other drug coverage, all while the beneficiary is at the counter. Medicare beneficiaries will begin to receive their prescription drugs under the new benefit starting January 1, 2006.

"This new system will help beneficiaries take advantage of their coverage even if they don't have their benefit card; it will help make sure beneficiaries get charged the right amount; and it will combine drug payments from Medicare with payments from other sources without the need for paper - no matter which pharmacy a beneficiary chooses to use," said CMS Administrator Mark B. McClellan, M.D., Ph.D. "We've worked with pharmacists and other stakeholders to develop an approach that simplifies life for the beneficiary."

The new process includes the coordination of other programs beneficiaries may enroll in, such as state pharmacy or retiree programs., to make it easy to combine the Medicare benefit with these other sources of coverage and to protect beneficiaries from being charged more than they should.

CMS awarded a contract to NDCHealth, based in Atlanta, GA, to provide the electronic services as part of a system for calculating beneficiaries' True Out-Of-Pocket costs. NDCHealth is required to provide routing of claims for benefits paid by entities other than Medicare back to the prescription drug plans to ensure that what seniors pay at pharmacy counters takes into account the proper level of their Medicare coverage. The $416,700, one-year contract with three one-year extensions requires NDCHealth to develop an electronic system similar to systems that pharmacists already use to bill insurance plans for prescription drug claims. The contract also includes up to $3.9 million for processing transactions during a single year.

"We will continue to work with the individuals and organizations that have the expertise with these transaction systems to ensure the successful implementation of the prescription drug benefit," said Dr. McClellan. "Part of that success means that pharmacists will be able to spend more time helping patients and less time resolving insurance matters."

Medicare's drug coverage will provide help with drug costs for all Medicare beneficiaries, regardless of how they pay for their drugs today. The standard drug benefit will pay 75 percent of a beneficiary's drug costs up to $2,250 a year after a $250 deductible is met. If out-of-pocket costs rise above $3600, the Medicare drug benefit pays 95 percent of all further drug costs for the year.

Almost one-third of Medicare beneficiaries with limited means will receive comprehensive benefits with no gaps in coverage and pay little or no premiums for drug plans that submit bids to Medicare, which are no higher than the average plan. The Medicare drug benefit is also designed to work with other coverage: millions of beneficiaries will get additional assistance with drug costs from a former employer, a state, a charity, supplemental coverage that they purchase themselves, and other sources. The new Coordination of Benefits system provides a straightforward way to combine these multiple sources of coverage, making it easier for beneficiaries to get even more help with their drug costs.

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