Published: March 2006
Waxman report critical of Medicare drug plan
Hundreds of thousands of people had problems getting coverage for their drugs after the new Medicare drug benefit took effect on Jan. 1. More than 17 million Americans have signed up for the program. About 43 million people are covered by Medicare. A report prepared at the behest of Rep. Henry Waxman (D-California) assesses the use and disclosure by Medicare drug plans of tactics that limit access to prescription drugs.
Some Medicare recipients are being denied payment for medications under the new Medicare drug benefit, according to a report released by Rep. Henry Waxman (D-California). (To read the full report see "Downloads" below.)
The prescription drug plans have restrictions that are not easy for consumers to learn about, said Waxman. Under the recently implemented Medicare drug benefit for seniors and the disabled, consumers must choose one of dozens of competing drug plans offered by private insurance companies. "Plan restrictions are widespread, but their terms are not disclosed," Waxman said in the report.
Even when a drug is listed as available through a plan formulary, unexpected barriers — such as "prior authorization" requirements, "step therapy" requirements, and "volume limits" — have been used by the sponsors of drug plans to delay or deny access. The use of these restrictive tactics means that even if seniors have carefully researched a Medicare drug plan, they can still encounter obstacles in obtaining medications.
Among the findings of the Waxman report:
- The vast majority of Medicare drug plans restrict access to formulary drugs. The Medicare data show that 97% of plans place either prior authorization or step therapy requirements on at least one of the 100 most popular drugs, with the average plan restricting access to over 10% of the popular drugs listed in its formulary. Some plans restrict access to over 40 of the 100 most popular drugs.
- Medicare drug plans are unable to describe plan restrictions accurately. Over two-thirds of the Medicare drug plans contacted in the phone survey were unable to describe accurately how the prior approval, step therapy, or volume limits worked with their particular plan. In a number of cases, plan representatives had no idea what these terms meant. In other cases, the representatives told callers that they could not obtain information on plan restrictions until after they signed up for the plan.
- Medicare drug plans provide erroneous or conflicting information about restrictions. A number of Medicare drug plans provided information that was erroneous or misleading or conflicted with other information provided by the plan in the phone survey. Several times, plans were called twice consecutively and gave completely different answers to identical questions about whether plans restricted access to drugs and how these restrictions worked. In other cases, plans provided erroneous information about what drugs were and were not on their formularies.
- The Medicare website and the websites of plan sponsors fail to provide adequate information about restrictions. Seniors cannot rely on the Medicare.gov website or the websites of plan sponsors to inform themselves about the details of plan restrictions. Medicare.gov does present limited information about whether Medicare drug plans use restrictive tactics, but the information is buried within the website and provides no details of the terms of the restrictions. The websites of plan sponsors generally have the same limitations.
For More Information
Medicare.Gov: The Official U.S. Government Site for People with Medicare
Download File
Waxman report critical of Medicare drug plan (Waxman_Report.pdf)
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