CHA Blog

• 13Jan

  CVS Caremark Corp. Charged with Dececptive Pricing Practices on Part D Drugs

  Prescription drugs No Comments

  CVS Caremark Corporation will pay $5 million to settle Federal Trade Commission charges that it misrepresented the prices of certain Medicare Part D prescription drugs – including drugs used to treat breast cancer symptoms and epilepsy – at CVS and Walgreens pharmacies. The allegedly deceptive claims caused many seniors and disabled consumers to pay significantly more for their drugs than they expected and pushed them into the “donut hole” – known as the coverage gap where none of their drug costs are reimbursed – sooner than they anticipated or planned. The settlement will bar deceptive claims related to Medicare Part D drug prices and require CVS Caremark to pay $5 million to reimburse affected Medicare Part D consumers for the price discrepancy.

  According to the FTC complaint, CVS Caremark offers Medicare Part D prescription drug plans through subsidiaries like RxAmerica, which CVS Caremark acquired in October 2008. Many consumers choose their Medicare Part D drug plans by looking up plan benefits and drug prices on RxAmerica’s website, by going to the Centers for Medicare & Medicaid Services website and using the web-based tool Plan Finder, or by visiting other third-party websites where such information is posted.

  The FTC charged that from 2007 through at least November 2008, RxAmerica posted on its website and supplied for posting to Plan Finder and third-party websites incorrect prices for Medicare Part D prescription drugs at two pharmacy chains, CVS and Walgreens. In some instances, the actual prices for these drugs were as much as 10 times more than the posted prices. As a consequence of the deceptive price claims, many elderly and disabled consumers chose RxAmerica plans and paid significantly more than they expected for their drugs at CVS and Walgreens.

  The proposed settlement order bars CVS Caremark from misrepresenting the price or cost of Medicare Part D prescription drugs or other prices or costs associated with Medicare Part D prescription drug plans. It requires that CVS Caremark pay $5 million in consumer refunds. The FTC will be mailing checks to eligible consumers who were harmed by these misrepresentations after the order becomes final. The settlement also contains standard record-keeping provisions to allow the FTC to monitor compliance with its order.

  After a thorough and comprehensive review of other consumer protection and competition issues in this matter, the FTC issued a letter closing the investigation. The FTC will publish a description of the consent agreement package in the Federal Register soon. The agreement will be subject to public comment for 30 days, that 30-day period began January 12 and continues through February 13, 2012, after which the Commission will decide whether to make the proposed consent order final. You are welcome to submit written comments electronically or in paper form by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section. Comments can be submitted on an electronic form, or in paper form if mailed or delivered to: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.

  This article is edited from the 1/12/12 FTC press release. For more information, visit the FTC website.

• 07Nov

  Beneficiaries Gain a New Right to Switch to a 5-Star Health Plan Starting 12/8/11

  Medicare Advantage, Prescription drugs No Comments

  As a way to reward Medicare Advantage (MA) and Part D plans that receive high performance ratings by the Centers for Medicare and Medicaid Services (CMS), and to guide beneficiaries toward such plans, there will be a new Special Election Period (SEP) allowing Medicare beneficiaries to enroll in MA and Part D plans that receive an overall 5-star rating by CMS’s Plan Performance Rating system. This right will start on December 8, 2011 and ends November 30, 2012.  The 5-Star SEP can only be exercised once per year.  Plan ratings for 2012 are available now on Medicare.gov’s Plan Finder Tool.

  Very few plans in 2011 achieved 5-star status. In California, no stand-alone Part D plans achieved this status. Kaiser’s Senior Advantage HMO plan in several counties is the only MA plan that received a 5-star rating.

  Note that using the 5-Star SEP does not guarantee Part D coverage. If a beneficiary in either an MA-PD plan or a PDP chooses to enroll in an MA-only plan with a 5-star overall rating, that beneficiary would lose Part D coverage and must wait for a subsequent enrollment period to obtain Part D coverage (such as the Annual Election Period from Oct 15 – Dec 7 each year). Late enrollment penalties might also apply.

  Here’s a summary of the star ratings for the PDPs in California:

  Star rating	How many PDPs?	Comments
  4	5	Dominated by Medco and Blue Shield.  Two of the Blue Shield PDPs are new – please note that the ratings are based on the sponsor and not the individual plan.
  3.5	2	Both WellCare.
  3	12
  2.5	14	Two of them are benchmark plans (Envision Rx Plus Silver and Aetna CVS/pharmacy).

• 17Oct

  Medicare’s Fall Open Enrollment Has Begun ~ Oct 15 – Dec 7

  Medicare Advantage, Prescription drugs No Comments

  Medicare’s Fall Open Enrollment, officially known as the Annual Enrollment Period (AEP) starts and ends earlier now. From October 15 – December 7, beneficiaries can change their Medicare health plan and Part D coverage and/or return to Original Medicare. Coverage changes become effective January 1, 2012.

  Learn more about the AEP and other enrollment periods. Beneficiaries can also contact their local Health Insurance Counseling and Advocacy Program (HICAP) for free counseling and information on their health care options in their area.

• 19May

  Reviewing LI NET Part D Coverage & the Best Available Evidence Policy

  Low-income help, Prescription drugs No Comments

  It’s been a while since we’ve talked about the Limited Income Newly Eligible Transition (LI NET) program for Part D coverage and the Best Available Evidence (BAE) policy, and sometimes people get these confused.

  To clarify, LI NET is a  ”safety net” Part D prescription drug coverage for low-income subsidy (LIS) eligible beneficiaries who are NOT currently enrolled in a Part D plan. The Best Available Evidence policy, however, is for people who ARE enrolled in a Part D plan, and is used when a person’s plan does not know s/he is LIS eligible. In these situations, instead of putting the burden of providing “official” proof of LIS eligibility on the beneficiary, the BAE policy allows for the beneficiary to show minimal evidence and therefore receive their prescriptions at the lower subsidized cost.

  For more information on LI NET, see the Centers for Mediare and Medicaid Services’ (CMS) recent LI NET update (PDF).

  For more information on the Best Available Evidence policy, see our BAE article.

• 05Apr

  Turn in Unused or Expired Rx Drugs on Sat. 4/30

  Prescription drugs, Resources 2 Comments

  Saturday, April 30 is the 2nd National Prescription Drug Take Back Day from 10 a.m. – 2 p.m.  Sponsored by the Drug Enforcement Administration (DEA), this event gives people the opportunity to turn in unused or expired medications for safe disposal. People can find a disposal site near them on the National Take Back Initiative website.

  The first event on September 25, 2010 was a huge success, with people across the nation turning in more than 121 tons of pills, and over 3,000 state and local law enforcement agencies nationwide participating in the event.

  Safe disposal of unused or expired drugs addresses both an important environmental and public health concern. According to the 2009 Substance Abuse and Mental Health Administration’s National Survey on Drug Use and Health, more than 7 million Americans (adults, teens and kids) abuse prescription drugs, and a majority of these are obtained through family and friends, including the family medicine cabinet.

  See the event website for more details, and please pass on the information.

• 01Apr

  48,000 Beneficiaries Have Used Medicare’s Drug Discounts in 2011

  Health Care Reform, Prescription drugs No Comments

  The health care law’s discount on brand-name drugs for some Medicare beneficiaries has been used by 48,000 people who saved a combined $38 million (an average of $800 per person) through the first 2 months of this year, according to the Department of Health and Human Services (HHS).

  New HHS figures released in March also show that the 11,000 Medicare enrollees who have already hit the Medicare prescription drug benefit’s annual out-of-pocket maximum this year have saved $1,175 on average as a result of the health law. The number of Medicare beneficiaries who buy discounted drugs is expected to increase throughout the year.

  People who opt for the Medicare Part D drug insurance program pay a portion of their prescription bills until they’ve spent a total of $2,840 in drug costs and deductibles. That’s when they hit the coverage gap, also known as the donut hole. At that point, they must pay all the drug costs until they have spent a total of $4,550 out-of-pocket for the year. Then they reach catastrophic coverage, where they pay the greater of 5% of their drug costs or a copayment of $2.50 for generics, $6.30 for brand name drugs. See our Prescription Drugs section for more info.

  Starting in January of this year, Medicare beneficiaries hitting the donut hole receive a 50% discount on brand-name drugs and 7% discount on generic drugs to help offset the cost of prescriptions. Even when getting the 50% discount, the full price of the drug counts toward reaching the $4,550 limit to get out of the donut hole and into catastrophic coverage.

  The law closes the doughnut hole by 2020. For more information on the changes in Part D prescription drug coverage prompted by the health reform law, see our article, “50% Discount on Part D Brand Name Drugs Starts Jan 1st.”

  This article is edited in part from a Kaiser Health News article, 3/22/11.

• 18Jan

  2011 Brings Significant Savings on Part D Drug Costs

  Prescription drugs No Comments

  While prescription drugs are expensive, this year Medicare beneficiaries will receive more help with their prescription drug costs, thanks to health care reform. Starting now in 2011, once a beneficiary and his/her drug plan have spent a combined $2,840 on covered drugs, s/he will reach a coverage gap also known as the “donut hole.” At that point, the beneficiary pays only 50% out-of-pocket on covered brand-name drugs and 93% on covered generics until their out-of-pocket costs reach $4,550 for the year. (Note that the entire cost of the drug is counted towards this $4,550 threshold, not just the 50% the beneficiary pays). This is different than previous years where beneficiaries paid 100% of their drug costs during the donut hole.

  After reaching the out-of-pocket maximum of $4,550, a beneficiary pays 5% or a small copayment for covered drugs, whichever is greater.

  The donut hole will gradually decrease over the next 10 years until it is completely eliminated in 2020 and beneficiaries pay just 25% of their drug costs.

  See our recent newsletter article and our Prescription Drugs section for more information on the the Part D and 50% discount on brand name drugs while in the donut hole.

• 17Aug

  Health Reform Gives Some Immediate Benefits for Californians

  Health Care Reform, Medicare and other health insurance, Prescription drugs, Resources 3 Comments

  Health care reform changes are vast and include many changes that will affect Americans now and in the future. While we’ve focused several articles on the changes affecting Medicare and Medicare beneficiaries, this article below, focuses on those affecting Californians old and young. Excerpted from the Passages HICAP Recap July-August 2010 newsletter (PDF), this article lists some of these changes and explains some of the immediate benefits impacting Californians.

  Small business tax credits

  503,000 small businesses in California could be helped by a new small business tax credit that makes it easier for businesses to provide coverage to their workers and makes premiums more affordable. Small businesses pay, on average, 18% more than large businesses for the same coverage, and health insurance premiums have gone up three 3 faster than wages in the past 10 years. This tax credit is just the first step towards bringing those costs down and making coverage affordable for small businesses.

  Closing the Medicare Part D donut hole

  Last year, roughly 382,000 Medicare beneficiaries in California hit the donut hole, or gap in Medicare Part D drug coverage, and received no extra help to defray the cost of their prescription drugs. Medicare beneficiaries in California who hit the gap this year will automatically be mailed a one-time $250 rebate check. These checks began being sent to beneficiaries in mid-June and will be mailed monthly throughout the year as new beneficiaries hit the donut hole. The new law continues to provide additional discounts for seniors on Medicare in the years ahead and completely closes the donut hole by 2020. (See our past blog article, Are You Eligible for the Part D Rebate: Q & A for more info.)

  Support for health coverage for early retirees

  An estimated 430,000 people from California retired before they were eligible for Medicare and have health coverage through their former employers. Unfortunately, the number of firms that provide health coverage to their retirees has decreased over time. On June 1, 2010, a $5 billion temporary early retiree reinsurance program started to help stabilize early retiree coverage and help ensure that firms continue to provide health coverage to their early retirees. Companies, unions, and state and local governments are eligible for these benefits.

  New consumer protections in the insurance market beginning on or after September 23, 2010

  • Insurance companies will no longer be able to place lifetime limits on the coverage they provide, ensuring that the 19 million California residents with private insurance coverage never have to worry about their coverage running out and facing catastrophic out-of-pocket costs.

  • Insurance companies will be banned from dropping people from coverage when they get sick, protecting the 2.7 million individuals who purchase insurance in the individual market from dishonest insurance practices.

  • Insurance companies will not be able to exclude children from coverage because of a preexisting condition, giving parents across California peace of mind.

  • Insurance plans’ use of annual limits will be tightly regulated to ensure access to needed care. This will protect the 16.2 million residents of California with health insurance from their employer, along with anyone who signs up with a new insurance plan in California.

  Health insurers offering new plans will have to develop an appeals process to make it easy for enrollees to dispute the denial of a medical claim. Patients’ choice of doctors will be protected by allowing plan members in new plans to pick any participating primary care provider, prohibiting insurers from requiring prior authorization before a woman sees an ob-gyn, and ensuring access to emergency care.

  Extended coverage to young adults

  Beginning on or after September 23, 2010, plans and issuers that offer coverage to children on their parents’ policy must allow children to remain on their parents’ policy until they turn 26, unless the adult child has another offer of job-based coverage in some cases. This provision will bring relief to roughly 196,000 individuals in California who could now have quality affordable coverage through their parents. Some employers and the vast majority of insurers have agreed to cover adult children immediately.

  Affordable insurance for uninsured with preexisting conditions

  $761 million federal dollars are available to California starting July 1 to provide coverage for uninsured residents with pre-existing medical conditions through a new transitional high-risk pool program, funded entirely by the Federal government. The program is a bridge to 2014, when Americans will have access to affordable coverage options in the new health insurance exchanges and insurance companies will be prohibited from denying coverage to Americans with pre-existing conditions. If states choose not to run the program, the Federal government will administer the program for those residents.

  Strengthening community health centers

  Beginning on October 1, 2010, increased funding for Community Health Centers will help nearly double the number of patients seen over the next 5 years. The funding could not only help the 1,049 Community Health Centers in California but also support the construction of the new centers.

  More doctors where people need them

  Beginning October 1, 2010, the Act will provide funding for the National Health Service Corps ($1.5 billion over 5 years) for scholarships to help the 1,049 Community Health Centers in California but also support the construction of new centers and loan repayments for doctors, nurses and other health care providers who work in areas with a shortage of health professionals. This will help the 9% of California’s population who live in an underserved area.

  New Medicaid options for states

  For the first time, California has the option of Federal Medicaid funding for coverage for all low-income populations, irrespective of age, disability, or family status. For more information on health care reform issues visit: www.healthcare.gov.

  Also see our article, What Does Health Care Reform Mean for Beneficiaries? Summary of Key Provisions.

• 03Aug

  CMS Sends Drug Manufacturer Agreements for Coverage Gap 50% Discount Program

  Health Care Reform, Prescription drugs 1 Comment

  The Centers for Medicare and Medicaid Services (CMS) sent agreements to drug manufacturers yesterday about the 50% brand name drug discounts they’ll be offering next year to beneficiaries in the coverage gap, as part of the Affordable Care Act signed by the President in March. Drug manufacturers must sign the agreement by Sept. 1 in order to continue offering drugs through the Medicare Part D program. The agreement also outlines a dispute resolution and appeals process to be used for payment discrepancies or conflicts raised by the manufacturers. In addition, CMS will be conducting extensive editing on payment data to make sure beneficiaries receive their entitled discounts.

  See CMS’ press release for more information.

  For more information on health care reform and Medicare, see our article, What Does Health Care Reform Mean for Medicare Beneficiaries? Summary of Key Provisions.

  For more information on Part D, see our section Prescription Drugs.

• 30Jul

  Senate Prohibits Payment to Delay Generics

  Prescription drugs No Comments

  A Senate panel approved legislation to prohibit drug companies from paying generic drug makers to delay bringing less costly products to market. This marks a major defeat for the powerful drug lobby.

  The Senate Appropriations Committee approved the measure, which was inserted into a spending bill that funds the Federal Trade Commission’s budget. The measure would ban a “pay-to-delay” practice — opposed by the FTC in a series of lawsuits brought since 2001 — in which brand-name drug companies and generic drug makers both profit. Brand-name drug makers get higher prices while the generic companies are paid to stay out of the market.

  The provision was authored by Sen. Herb Kohl, D-Wis., with support from Dick Durbin, D-Ill., the No. 2 Democrat in the Senate and the chief author of the underlying spending bill.

  The vote was tight, first deadlocking 15-15 on an amendment by Sen. Arlen Specter, D-Pa., to strip the provision. Four Democrats voted with the drug lobby, and the drug company lobbyists thought they had the vote won, provided they could win over every panel Republican.

  Yet, Sen. Richard Shelby, R-Ala., voted against the drug companies, helping give Kohl and Durbin a surprise win. With health care costs spiraling up, Senator Kohl said “we cannot turn a blind eye to these anti-competitive backroom deals that deny consumers access to affordable generic drugs.”

  The FTC estimates that pay-to-delay deals cost consumers $3.5 billion a year. The agency suspects branded and generic drug companies made 21 such deals since last October. It would also save the government $2.6 billion over the next decade by reducing drug costs.

  FTC Chairman Jon Leibowitz attended the panel session and cheered the vote.

  The spending bill containing this provision has yet to advance to either the House or Senate floors and the drug lobby will be continuing their battle. To encourage the passage of this provision that can save consumers billions on prescription drugs, contact your Congress people.

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