Fwd: Issue 17, August 21, 2007

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Welcome to MEDICARE WATCH, a biweekly electronic newsletter of the

Medicare Rights Center

Vol. 10, No. 17: August 21, 2007

Contents:

FAST FACT INSURANCE COMPANIES REAP PROFITS FROM MEDICARE PART D FAILS TO COVER OFF-LABEL PRESCRIPTIONS BUSH RENEWS VETO THREAT FOR CHILDREN’S HEALTH BILL CASE FLASH: DISENROLLMENT FOR DUAL ELIGIBLES

1. FAST FACT

In the first year of the Medicare Part D drug benefit (2006), 7.4 million

people with Medicare chose not to enroll, accounting for more than half

of those who did not already have drug coverage. Those who choose to

delay enrollment in Part D and have no other comparable drug coverage

will be forced to pay a premium penalty if they enroll later

(“

Many Elderly Waive Part D,†Newsday/Bloomberg, August 2,

2007).

2. INSURANCE COMPANIES REAP PROFITS FROM MEDICARE

UnitedHealth amended its filing with the Securities and Exchange

Commission on August 6, adding $30 million to its second-quarter profits

due to unexpected increases in government payments to its plans.

UnitedHealth, which is the largest provider of Medicare private health

plan coverage, saw its profits rise 25 percent in the past year.

While government payments increased, “enrollment in employer-sponsored

health plans has been eroding industry-wide,†Mullkin, a

financial analyst with Piper Jaffray & Co., told Bloomberg News.

Mullkin explained that “insurance providers are becoming more dependent

on Medicare and other public programs for profits.â€

Just a month ago, Humana, the second largest Medicare private health plan

provider, disclosed a second-quarter net income of $216.8 million, up

from $89.5 million during the same quarter last year. The increase was

attributed to a 2.4 percent rise in enrollment in all Humana plans, for a

total of 11.3 million members. Over the last year, the company’s

Medicare private health plan membership has increased by 18

percent.

Like UnitedHealth, Humana’s membership in employer-sponsored health

plans declined 10.7 percent to 1.53 million, while sales of health plans

to individuals jumped 21 percent to 205,000. Nersessian, a

financial analyst with Credit Suisse, emphasized the contribution of the

government sector to Humana’s bottom line. According to a July 30

Bloomberg News update, Nersessian claimed that “Humana reported its

strongest quarterly result in recent memory on the back of

stronger-than-expected performance in the government segment.†He

added, however, that “the commercial business missed

expectations.â€

Of the 45 million people with Medicare, 20 percent, or 9 million, are

enrolled in private health plans. In 2007, it is projected that Medicare

will pay individual plans $76.3 billion, $9.2 billion more than it would

cost to care for plan members under Original Medicare, according to

Bloomberg News.

The Children’s Health and Medicare Protection (CHAMP) Act, recently

passed in the U.S. House of Representatives, would eliminate overpayments

to private health plans, gradually leveling the payment rates between the

insurance companies and Original Medicare. This may fall hard on the

surging profits of companies like Humana, which “derive[d] more than

half of its 2007 earnings per share from Medicare Advantage alone,â€

according to a note by Lake of UBS Investment Research provided to

Bloomberg News. About 59 percent of Humana revenue in the second quarter

of 2007 came from Medicare programs, a 44 percent increase from the first

quarter.

3. PART D FAILS TO COVER OFF-LABEL PRESCRIPTIONS

According to a recent report released by the Medicare Rights Center

(MRC), there has been an upsurge in consumer complaints over the lack of

Medicare Part D coverage for off-label prescriptions, which are drugs

prescribed for uses other than their Food and Drug Administration

(FDA)-approved indications.

The MRC report, entitled

Off-Base: The Exclusion of Off-Label Prescriptions from Medicare Part

D Coverage, explains that rules issued by the Bush administration

dictate that Part D plans can cover doctor-prescribed off-label drugs

only if their use is for a condition found in one of three major drug

reference guides, called compendia.

An August 2 article by USA Today, which covered the MRC report,

quoted Dr. Kelman, chief medical officer at the Center for

Beneficiary Choices of the Centers for Medicare & Medicaid Services

(CMS), as describing the three compendia as “very, very broad,â€

adding that providers should take care in prescribing off-label drugs

because FDA directives “ensure safety.â€

However, off-label prescribing is a very common medical practice.

According to a study published in the Archives of Internal

Medicine, more than 20 percent of the 725 million prescriptions

written for the 500 most commonly used prescription drugs in the United

States are for off-label use, prescribed to treat such conditions as

cancer, pain, HIV/AIDS, psychiatric conditions, and rare

diseases.

“An off-label medication may be the only treatment that relieves a

person’s debilitating pain, keeps someone out of the hospital or keeps

someone alive,†said , president of the Medicare Rights

Center, which became aware of the problem as a result of consumer calls

to its hotline.

Some of the drugs commonly left uncovered for off-label indications by

Part D plans include the pain medications Actiq and Fentora, which are

FDA approved for cancer-related pain but not covered for managing other

types of pain; Zofran, which is covered for nausea in chemotherapy

patients but not for others; and Lotronex, which treats irritable bowel

syndrome in women, but is not covered for use by men.

According to the MRC report, patients who need off-label drugs for

conditions not covered in the compendia have few choices to pay for drugs

that can cost up to thousands of dollars per month.

MRC’s report contends that the Part D drug benefit should cover all

“medically necessary†drugs as the Medicare statute already requires

coverage of all medically necessary treatment under Medicare Parts A and

B. added, “For the first time in more than 40 years, we have a

Medicare statute interpreted as not covering medically necessary

care.â€

Off-Base urges CMS to adjust Part D regulations to abide by the

Medicare statute or asks that Congress make appropriate clarifications in

the Medicare law to broaden the meaning of a covered Part D drug.

Coverage for drugs intended for noncompendia conditions should be based

on “other evidence of medical necessity,†such as support in peer

medical-reviewed journals.

“Congress never intended to bar Americans with Medicare from getting

the medically necessary drugs they need. The Bush administration needs to

revise off-label regulations quickly, so that no one is harmed any

further,†said .

4. BUSH RENEWS VETO THREAT FOR CHILDREN’S HEALTH BILL

Following the passage in the House and Senate of legislation increasing

funding for State Children’s Health Insurance Programs (SCHIP),

President Bush promised to veto both bills, charging they were steps

toward national health insurance. One week after its passage, President

Bush renewed his intention to veto both versions, declaring at a press

conference, “If SCHIP is used to expand the nationalization of health

care, I will veto it.†Allyson Schwartz, Democrat of Pennsylvania,

countered in the Philadelphia Daily News that this is a “callous

threat... compromising the health care of millions of

children.â€

On August 9, the advocacy group Cover the Uninsured released a report

confirming SCHIP’s influence on access to health care in the United

States. In Protecting America’s Future: A State-by-State Look at

SCHIP and Uninsured Kids, Cover the Uninsured found that in SCHIP’s

first year, 1997-1998, the uninsured rate for Americans under 18 was 14.5

percent, amounting to 10,977,892 children. However, seven years after the

program began, in 2004-2005, only 11 percent were uninsured, or 8,587,948

children. Currently, 6.6 million children are covered by SCHIP.

The House version of the bill would eliminate overpayments to private

Medicare plans, expand programs for low-income people with Medicare and

make other improvements to Medicare coverage for preventive services,

mental health treatment and prescription drugs.

5. CASE FLASH: DISENROLLMENT FOR DUAL ELIGIBLES

Mr. L is enrolled in a Medicare private health plan with prescription

drug coverage. He also has Medicaid. Mr. L’s bladder and prostate

cancer had been in remission for 20 years, but the cancer recently

recurred. Mr. L’s doctor ordered a whole body bone scan to diagnose Mr.

L and begin treatment, but Mr. L’s plan would not authorize payments

because the diagnostic testing center where the doctor sent him is out of

network.

Most people can only change their Medicare health plan during the Open

Enrollment Period (January 1-March 15 of every year) or the Annual

Coordinated Election Period (November 15-December 31 of every year).

However, if you have both Medicare and Medicaid, you can change your

Medicare private health plan and drug plan once a month all year long.

Since Mr. L has both Medicare and Medicaid, he wrote a letter to his plan

to disenroll. Once disenrolled from his private plan, Mr. L was

automatically enrolled into Original Medicare. Mr. L then selected a

stand-alone private drug plan. He was able to go to the diagnostic

testing center, which was covered by Original Medicare, and was able to

have the drugs he needed covered by his new drug plan.

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Medicare Watch is MRC’s fortnightly newsletter,

established to strengthen communication with national and community-based

organizations and professional agencies about current Medicare policy and

consumer issues. Each edition contains news of recent policy developments

affecting Medicare and health care generally and a case story from our

hotline that illustrates steps professionals can take to get older adults

and people with disabilities the health care they need.

The Medicare Rights Center (MRC) is the largest independent source of

Medicare information and assistance in the United States. Founded in

1989, MRC helps older adults and people with disabilities get good,

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