Catherine Wilson, Bureau Chief
Dealing in Drugs
In a few weeks, local recipients of Medicare will start to receive numerous solicitations in the mail from prescription drug insurance companies, all vying for their business. These recipients, most of them seniors, have until November 15 to decide which of those companies will provide coverage for their medications for the upcoming year. is annual dance is all part of Congress’ voluntary “Part D” prescription program for Medicare
recipients which went into effect in 2006.
The purpose of this plan was to make medications more affordable for the elderly. Before Part D was approved, many United States residents
resorted to importing their medicines from Canada where the drugs often cost up to 80% less. Medicare Part D was established to cover approximately 50% of the recipient’s prescription drug costs. But according to Medicare analysts, the ten largest pharmaceutical companies increased their profits by over eight billion dollars, to approximately $40 billion in total, in the first six months after the implementation
of this program alone, January – June 2006.
And the program has not been a panacea for its recipients – massive confusion and price discrepancies and programs exist. According to Medicare, in 2008 there were 1,824 different insurance companies competing for customers: “The number of available plans varied by region. The lowest was 27, in Alaska, and the highest was 63, in Pennsylvania & West Virginia.” But Medicare claims that “this allows participants to choose a plan that best meets their individual needs. Plans can choose to cover different drugs, or classes of drugs, at various co-pays, or choose not to cover some drugs at all.” at last part does not meet a patient’s needs!
Such a maze of programs has led to confusion among local seniors. The Guardian recently spoke with one such senior, Lucille, about issues and concerns she had over her prescription costs and changes in her insurance coverage. One of Lucille’s concerns was the varying prices she paid for the same medications. For 11 months in 2006, Lucille paid a modest amount for each of her prescriptions. But in late November and throughout December, her costs skyrocketed – a drug that once cost her $28 was now $166, one that was $66 was now $141, despite the fact that she was receiving the exact same prescriptions in the exact same dosages from the exact same pharmacist.
The source of Lucille’s problem in late 2006? She had fallen into Part D’s famous “donut hole” – the part of the program where the recipient
must cover 100% of the total cost of their medications. Part D was designed to help most seniors with average medications, and those seniors with catastrophic needs. But for those who fall into the middle, enough drugs to rack up significant expenses, but not enough to be considered catastrophic, they end up paying $1,540 annually in addition to the initial deductible and the monthly premiums for this insurance. Medicare
describes this gap in the Part D insurance program, as follows: “The standard program allows for payment of a $275 deductible. e beneficiary then pays 25% of the cost of a covered Part D prescription drug up to an initial coverage limit of $2,510.
Once the initial coverage limit is reached, the beneficiary is subject to another deductible, known officially as the Coverage Gap but referred
to more commonly as the “Donut Hole,” in which they must pay the full cost of medicine.
When total out-of-pocket expenses on formulary drugs for the year, including the deductible and initial coinsurance, reach $4050, the
beneficiary then reaches catastrophic coverage, in which he or she pays $2.25 for a generic or preferred drug and $5.65 for other drugs, or 5% coinsurance, whichever is greater.”
The confusion surrounding this “donut hole” is not the only problem seniors face with Part D insurance programs. The Guardian spoke
with Dan Molino, of Trotta’s Pharmacy in Harrison, about how the Part D program affects his customers. “All of these plans restrict certain
drugs and require prior authorizations from a doctor before those medications can be covered,” Molino said. “The biggest problem is when seniors change their plans each year looking for the lowest cost plan. They don’t realize they need to get their medications reauthorized
with the new insurance company before they will be covered.” Many seniors end up paying for necessary medications out-of-pocket while
waiting for authorization. Those seniors then have to personally file claims with the insurance company for reimbursement, if any, of their
out-of-pocket costs. One unapproved medication can easily eliminate all the ‘savings’ of the lower cost program. Molino recommends
that seniors find the plan best suited to their needs and stick with it to avoid such headaches.
The current economy is also affecting the use of prescriptions for the elderly. “Many are cutting their tablets in half, or they are skipping
days to save costs,” Molino noted. The insurance companies are also cutting back. “There are certain contracts that we are not allowed to fill,” Molino acknowledged, “because the insurance company has reached the maximum number of patients that they will accept in the area. It’s rare, but sometimes we have to turn people away because their insurance carrier will not allow us to accept them.” Reimbursement rates also affect not only how much a patient will pay but also which pharmacist will fill their prescription. “There is a huge range in reimbursements for each medication among the insurance companies. Some have reimbursement rates so low that I cannot afford to accept the insurance – it won’t cover my overhead,” Molino noted.
Large pharmacy chains have an advantage that Trotta’s does not in this area. “Bigger stores can use ‘front-of-store’ sales to offset what they lose on prescriptions,” Molino admitted. “Those stores make you walk through their entire store to get to the pharmacy, hoping you’ll spend money along the way”. Westchester’s local, independent pharmacies do have one advantage over the large chains and stores –
personal service. “We deliver medications to your door,” Molino noted. “Many Part D plans encourage their enrollees to participate in a mail-order prescription service. But when that service misses a delivery or sends the wrong medication, that’s when we get those patients in our pharmacy, crying. And there’s very little we can do for them since we don’t have the original prescription.”
One elderly local woman, “Mary” (named changed), was in severe pain after shattering her kneecap in a fall. The mail order service lost the renewal order for her medications. When Mary realized she never received the renewal, she was down to a few pills – at the beginning
of a holiday weekend with no one available at the mail order’s customer service department until the following Monday morning.
She spent the next two nights crying in agony in her daughter’s arms, trying to get relief from useless over the- counter medications. “We see
a lot of those cases,” Molino admitted. “A senior might save $10 on a three-month supply of a mail order medication, but is it worth it when a supply goes missing?” The distribution channels of a mail order service are also a concern. “Image anyone ordering from a company down
south lately?” Molino asked. “Did their diabetes medication get delayed because of hurricanes?
Was it left sitting in extreme heat or humidity in the back of a truck jeopardizing the viability of the drug? If a patient has their prescriptions
delivered from us, they don’t have those worries”. Unlike mail-order drug companies, local pharmacies have pharmacists on staff to speak with patients and advise them. According to Jeffrey Hammond, of the New York State Department of Health, “All prescriptions are entered by the pharmacist into a database. All of the patient’s other prescriptions will appear, along with warnings of conflicts and side-effects. The main purpose of the Health Department is to make sure that we keep unsafe medications out of your home. That means not only checking for illegal prescription drugs, but also for medications that can harm an individual patient – drugs that would not react well with each other, for example.”
Illegal prescription drugs are becoming a growing cause for concern nationwide. The New York State Department of Health has fought back by mandating an official physician pad program where each doctor in the state is assigned a specific sequentially numbered set of prescription pads. According to Hammond, these new prescription pads have the following security devices to protect the patient:
• Each prescription is uniform with standard guidelines – i.e., information is found in the same place on each prescription, eliminating
• Each prescription sheet has a unique, sequential number identifying that prescription;
• Each prescription sheet has an anti-fraud device – a small area that will change color when pressed with a thumbprint. If a pharmacist is
concerned that a prescription may be fraudulent, he/she can test this area;
• Each physician is assigned uniquely numbered pads – if a pad or individual prescription sheet is stolen, a warning for those prescription
numbers will appear in the pharmacist’s database;
• Each prescription has a water mark making them difficult to counterfeit;
• Each prescription sheet has anti-copying protection – the sheet will copy completely black so duplicates of the physician’s signature and
information cannot be obtained.
New York State is incorporating these measures not only to eliminate the black market for illegal prescriptions, but also to control costs and curb duplicate prescriptions issued. “Some patients will ‘doctor shop,’” Hammond noted. “They will get one pain medication from one doctor then go to another doctor across town with the same symptoms to get the same pain medication”. The taxpayer and insurance companies foot the bill while the patient sells the prescriptions in black market. The new prescription pad program, along with the national databases pharmacists use, quickly alerts the pharmacist when a patient is attempting to fill multiple prescriptions for the same medication.
While keeping the costs of prescriptions under control still remains a priority for most Medicare recipients, the Part D program is “better than where we were five years ago,” Molino noted. “Then we had nothing to help patients alleviate the high costs of their medications”.
However, seniors still continue to face another huge nightmare – the insurance maze. “Medicare and Medicaid claims are so complicated
that only the most experienced medical billers can handle them,” ‘Claire’, a local medical biller, told The Guardian.
Insurance claims go through a series of steps. “Each doctor’s office will set up a billing system with the codes for the insurance company,”
Claire said. “After a doctor has seen a patient, he/she will circle the code for that patient. Those codes are then entered into a computer and
finally, they are grouped and sent to the insurance company. The doctor then receives a check back from the insurance company, which is less than the cost of the service, so he/ she has to write off the balance.”
Since most doctors cannot afford to operate as sole practitioners any more, they are joining forces and handing over their billing to outside medical billing companies. “That poses another problem for the doctors,” Claire noted. “The services have a lot of work so they don’t
pay complete attention to claims.
They don’t have time to reconcile accounts or to review claims to see if a wrong code was entered. If a claim is rejected by the insurance
company, there is a narrow window of time to appeal. If the appeal is late, the money is lost and the entire amount has to be written off the
doctor’s account. The billing companies charge 8% of the claims they handle so some doctors opt to enter codes themselves to save money. To try to avoid lost money on claims, doctors try to have patients pay up front, but a doctor cannot refuse a patient who cannot pay without going through a lengthy process.”The result of this insurance nightmare? “Some doctors are now refusing to take insurance at all and will only accept cash patients,” Claire admitted. “A patient who needs surgery has to work out a payment plan with those doctors to get the treatment they need.”
The same potential insurance nightmare is looming for pharmacists. Trotta’s Pharmacy admitted that there are already some insurance
programs that they simply cannot afford to accept because their reimbursement rates are too low. According to the New York State
Department of Health’s Hammond, “Pharmacists typically negotiate their own rates with each insurance company.”That gives larger pharmacy chains an advantage over local pharmacies since they are ordering in larger quantities and can dedicate manpower to the negotiations and spend time haggling over denied reimbursements and claims. In addition, the insurance companies profit from the time and energy spent by the local pharmacists in processing prescriptions.
“I enter all of a patient’s personal information, such as name and address, as well as their prescriptions and medical information into the
database,” Molino said. “Then the insurance company will take that information and turn around and try to take my customer away by
offering them a small discount for using their mail order service instead!”
According to Molino, many of the prescription mail order forms are owned by the drug companies themselves. “So they are profiting
off of both ends,” Molino noted. Fortunately there is some help for local residents like Lucille in all this mess. The Westchester County
Department of Seniors manages a state program called EPIC (Elderly Pharmaceutical Insurance Coverage). According to Hammond, “This
program covers many drugs not covered by Medicare. It also helps pay for the deductible on the Part D plans. If EPIC and Part D plan have
different costs for a particular drug, the pharmacist will give the patient the greater discount.” For seniors on very low incomes, New York
State will offset the monthly premiums of this program. To be eligible for EPIC a senior must have an income of less than $35,000 (single)
or $50,000 (married). Local seniors can contact the County Office at 914-813-6300 to apply for EPIC.
The biggest concern for both our local and state health departments is the safety of our residents. “We don’t want people self-prescribing,”
Hammond admitted. Molino also was concerned about seniors looking to save money by obtaining their medications from unsafe sources
– such as counterfeit prescription drugs from third world countries being sold on the internet. “New York State’s Bureau of Narcotics is actively investigating any suspicious prescription drugs,” Hammond noted.
The best bets for seniors when facing this winter’s annual rush of Part D insurance renewals? Know what medications you need and see
which plans cover them. Medicare’s offices and website can assist with this. Try not to change plans to avoid reauthorizations of medications. Find a local pharmacist you like and trust and ask what insurance plans they accept and recommend.
Order all medications through one pharmacy or chain to have all of your personal information in one database for comparisons with new drugs, and less margin for error. Know what your medications should look like and check them before leaving the pharmacy. Do not
order critical prescriptions from mail order companies if possible. And, most importantly according to Molino: “Do not be afraid to ask
questions. It’s your health and our job to help you.”