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Extra Charges In Medicare Drug Benefit Criticized

Ruzanna Harutyunyan's picture

The National Senior Citizens Law Center and 11 other advocacy groups in a letter to CMS last week asked Medicare to stop marketing private Medicare prescription drug benefit plans that require extra fees above a standard copayment for hundreds of brand-name drugs, USA Today reports.

According to USA Today, more than one million beneficiaries in the Medicare Part D drug program are required -- when opting for certain brand-name drugs over the generic version -- to pay the difference between the brand-name treatment and the generic version, along with their typical copay. The extra fees do not apply to patients eligible for the program's low-income subsidy.

In addition, physicians can seek an exception to the extra fee for beneficiaries who are unable to take generics for medical reasons, according to USA Today. About 1.3 million beneficiaries who will be required to pay the extra fees are covered by two insurers: Health Net and SilverScript. Medicare officials said about 10% of insurers will require the extra fees in 2009. Other insurers that offer Part D plans, including Humana, Aetna and UnitedHealth Group, do not use additional fees.

USA Today reports that the additional fees, along with the standard copay, could cause some beneficiaries to pay "almost the full price" for some brand-name drugs. Eva Shiffrin, a program attorney for Disability Rights Wisconsin, said the charges add between $22 and $100 monthly for common brand-name drugs to treat allergies and sleeping problems. According to Shiffrin, the extra fees for an expensive rheumatoid arthritis drug increase beneficiaries' cost by nearly $500 monthly.

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Amy Sheyer, spokesperson for Health Net, said the extra charges help to control costs while letting patients choose brand-name drugs. Officials from Health Net and SilverScript said the additional fees are not new. However, NSCLC representatives said they have not seen the charges before.

CMS Web Site Changes Requested

In the letter, NSCLC and the other advocacy groups said that, if CMS does not halt the marketing of the plans, the agency should revamp its Web site to correctly reflect what beneficiaries will pay for prescriptions. According to USA Today, the site currently does not include the extra fees when calculating annual costs. Instead, a footnote says that prices "may be subject" to additional charges and directs beneficiaries to contact insurers for more information. "What we're concerned about is the lack of transparency up front," Kevin Prindiville of NSCLC said.

According to Jeffrey Kelman, a chief medical officer for Medicare, beneficiaries have not complained about extra charges. Kelman says Medicare is working to "fix" the Web site information (Appleby, USA Today, 12/3).

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/email . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2007 Advisory Board Company and Kaiser Family Foundation. All rights reserved.