Statement of Andrew Sperling, National Alliance on Mental Illness, Arlington, Virginia

Chairwoman Johnson, Representative Stark and members of the Subcommittee, the National Alliance on Mental Illness (NAMI) thanks you for holding this important and timely hearing.  As the largest national organization representing individuals with severe mental illnesses and their families, we place a high priority in full and effective implementation of the new Medicare drug benefit. 

As you know, NAMI supported the Medicare Modernization Act (MMA) when it passed Congress in 2003.  Through our 1,200 affiliates, we have worked hard to make sure that the program is smoothly implemented -- especially for the low-income Medicare beneficiaries living with chronic illnesses -- the population most in need of strong and stable prescription coverage. 

Overall CMS Performance and Assistance to Vulnerable Beneficiaries

The MMA represents the most far reaching changes to the Medicare program since its inception in 1965.  The Part D program alone has involved enrollment of nearly 30 million people into new coverage over a very short period of time.  Without question, any effort to initiate new coverage of benefits and shift such an enormous volume of beneficiaries into new coverage (especially the 6.2 million dual eligible beneficiaries) will result in disruption in coverage and administrative problems. 

From NAMI’s perspective, even a single vulnerable beneficiary experiencing problems in enrollment or initial transition is a problem.  At the same time, it is important to recognize the tremendous progress that has been made since January and February.  The problems that were experienced by beneficiaries early in 2006 – long waiting times at 1-800-MEDICARE, inability to accurately confirm plan enrollment at the pharmacy counter, frustration with transition refills, lack of compliance by drug plans with formulary coverage requirements, etc. – have improved significantly in recent months.  NAMI would like to commend the hard work of senior management and the staff at CMS in effectively addressing many of these problems.  The staff at CMS has been extremely accessible and responsive to NAMI and many other groups representing beneficiaries and their family members. 

NAMI is concerned that the Government Accountability Office (GAO) study released earlier this week on education and outreach efforts at CMS fails to capture the improvements that have been made since January and February.  For example, we understand that wait times at 1-800-MEDICARE have shrunk significantly since the time period measured in the GAO study. 

Further, the GAO study appears to be overly inclusive in classifying information provided by CMS staff as inaccurate or incomplete.  In fact, information provided by CMS is designed to be specific to the individual beneficiary (or their family member) that have called in – not general information about the program.  CMS should be judged on how it meets the needs of actual beneficiaries with their specific needs and the GAO report appears to have missed this key performance measure. 

Medicare Part D has been in effect for barely 120 days.  While it is important for the GAO to continue to provide oversight and investigate the performance of CMS the private sector plans that offer drug coverage, it should be recognized that this report is only a snapshot taken in the earliest days of the program.  By contrast, Part D will be with the Medicare program for many years to come.  NAMI – like all other groups representing beneficiaries – are in this for the long haul.        

Transition of Dual Eligibles to Part D

NAMI continues to be concerned about the performance of Part D drug plans in meeting their responsibilities with respect to "continuity of care" for dual eligibles with severe mental illness and other disabilities and chronic illnesses.  By “continuity of care” NAMI is referring to the critical issue of ensuring that dual eligibles with severe mental illness do not have their ongoing care interrupted.  The consequences of interrupted access to medications for duals with mental illness can be severe.  Treatment for diseases such as schizophrenia, bipolar disorder and major depression is complicated and typically involves the prescribing of multiple medications and significant co-morbidities.  Lack of coverage to any medication, even for a short period of time, can have disastrous results.  Further, most of the medications commonly prescribed to treat these disorders (including anti-psychotics, anti-convulsants and anti-depressants) are NOT clinically interchangeable.

CMS Formulary and Transition Guidance -- Critical Protections for Dual Eligibles

NAMI has therefore been especially concerned that protections be in place on an ongoing basis to ensure that all Medicare beneficiaries with mental illness -- especially dual eligibles -- are able to make a smooth transition to Part D and maintain access to the specific medications prescribed to them over the long-term.  In response to both of these concerns, CMS has issued guidance to all Part D plans.  These include:

Transition Guidance -- This guidance requires Part D plans to continue covering all medications prescribed to a beneficiary in any initial transition period.  CMS has now extended this guidance for the 2007 contract year.  NAMI applauds CMS for keeping this key protection in place.  This will be especially important for dual eligibles who must go through random assignment to a Part D plan again in 2007.

Formulary Guidance – This requires all Part D plans to cover “all or substantially all” of the medications commonly prescribed to treat mental illness including anti-psychotics, anti-depressants and anti-convulsants.  NAMI is extremely pleased that CMS has renewed this guidance for 2007.  This requirement for broad formulary coverage is essential to making the benefit work for beneficiaries with severe mental illnesses.

NAMI is extremely grateful to CMS for renewing both of these guidance requirements for all PDPs and MA plans for 2007.  Continuation of these protections will ensure that prescription drug coverage is effective and uninterrupted for those who need it most – Medicare beneficiaries living with chronic illnesses with complicated treatment needs and high drug costs.

Beyond the critical protections in the CMS formulary and transition guidances, NAMI is extremely concerned that some drug plans are increasingly using “safety edits” as “cost edits.”  These safety edits are typically used as quantity or dosage limitations, and in some cases, to outright deny coverage.  NAMI respects that drug plans need to ensure that a medication prescribed for an enrollee is clinically appropriate.  At the same time, these safety edits should never be applied against a dosage or quantity of a medication (especially for an antipsychotic medication prescribed to treat schizophrenia) for which a beneficiary has previously achieved clinical stability.   

Providing Additional Guidance to Allow Manufacturer Sponsored Assistance Programs to Supplement Part D

Mr. Chairman, as you know there has been a great deal of confusion around the current status of pharmacy assistance programs (PAPs) offered by drug manufacturers for low-income Medicare beneficiaries.  In response Part D, some of these programs have either shut down, suspended enrollment, or plan to cease operations at the end of the Part D open enrollment period (May 15, 2006).  This is situation is further complicated by confusing guidance that was put forward by the HHS Office of Inspector General (IG) in November 2005.  This guidance calls into question whether PAPs can legally supplement coverage under Part D for low-income beneficiaries who do not qualify for the Part D low-income subsidy (LIS).  CMS claims that these programs can offer assistance outside of Part D, yet the IG’s guidance creates enormous legal and administrative barriers to the development of creative approaches that would clear the complex legal standards set forth by the IG.

This is an especially important issue in NAMI’s view since there are likely millions of low-income Medicare beneficiaries who are close to (and in some cases below) the 150% of poverty upper limit for LIS eligibility who are now worse off under Part D.  This is occurring because they are failing the asset test for LIS eligibility and simultaneously losing access to a manufacturer-sponsored PAP that offered them coverage for their medications at little or no cost prior to Part D.

In NAMI’s view, the complex legal and administrative issues preventing this problem from being resolved must be overcome.  While we respect the IG’s independence, NAMI would encourage this Subcommittee to make every effort to persuade all sides involved – especially the IG – to resolve this matter as quickly as possible.  This is especially urgent with the end of the open enrollment period looming just a little more than 10 weeks away.  There is absolutely no reason why legal and administrative roadblocks cannot be removed so that PAPs and charitable organizations can make assistance available low-income beneficiaries.  This should include assistance for:

1. Dual eligibles living on SSI facing a serious financial burden even with cost sharing as low as $1 for a generic and $3 for a brand name (many dual eligibles living in group homes or assisted living facilities have disposable income as low as $15 to $20 per week),
2. Low-income beneficiaries who failed to qualify for LIS solely because of assets above the limit who cannot afford monthly premiums and annual deductibles, and
3. Individuals below 200% of poverty who end up in the doughnut hole coverage gap.

In each of these cases, NAMI agrees with CMS that assistance should be linked to enrollment in a Part D plan.  It is critically important that any assistance from a PAP or charitable organization not serve as an inducement to not sign up for coverage – and assessment of a late enrollment penalty in future years.

In recent weeks, a few manufacturers have received blessing from the IG to initiate PAPs that will operate independent of Part D by offering free medications to qualified individuals that have signed up for Part D coverage.  This is an encouraging step forward.  However, NAMI would nonetheless encourage this Subcommittee to continue to press CMS to issues such as cost sharing for dual eligibles and assistance with premiums and deductibles for beneficiaries below 150% who failed to qualify for LIS because of the restrictive asset test.  Accessing free or deeply discounted medications would obviously be helpful for them, but not a substitute for the assistance they need to fully participate in Part D coverage.     

Repeal of “Non-Interference” and Restricting Beneficiary Choice

There has been a great deal of discussion in Congress about repeal of the so-called “non-interference” provision in the MMA that limits the authority of the HHS Secretary to engage in direct negotiations with drug makers over cost and access.  NAMI is concerned that changing this critical piece of the Medicare Part D benefit and allowing the Secretary to negotiate a single national structure for access to medications could be extremely disruptive for beneficiaries.  In short, NAMI is concerned that repeal of the “non-interference” provision will inevitably lead toward these PDPs and MA plans having to follow a single national structure for access and coverage. 

Further, it is NAMI understands that both the CMS Office of Actuary and the Congressional Budget Office (CBO) have concluded that repeal of the “non-interference” provision would not result in any additional savings beyond the discounts from manufacturers that the multiple private sector plans have already been able to achieve through the competitive process that CMS has put in place.  Our experience with the VA, state Medicaid agencies and other public sector payors makes clear that a single governmental authority negotiating for a single price and formulary structure deals to restrictive formularies that in the end hurt the most vulnerable beneficiaries. 

Congress Needs to Address Cost Sharing for Duals and Benzodiazepine Coverage

Mr. Chairman, as you know a broad range of legislation has been introduced in the House this year to address concerns with the new Medicare drug benefit.  They range from proposals to completely suspend the benefit to replacing the new program with a government managed program.  NAMI believes that in many cases action on legislation to completely overhaul the new benefit is premature at this point.  As you know, the President has made clear that he is firmly opposed to any major structural reforms, much less the scrapping of the entire benefit.

At the same time, NAMI believes that there are several bipartisan bills that make minor adjustments to Part D that would resolve specific narrow problems with the new benefit, while still allowing CMS to proceed with the new program.  Two specific bipartisan proposals that NAMI would recommend this Subcommittee give serious consideration to are proposals that would address cost sharing for certain dual eligibles and the mandatory exclusion of benzodiazepines.

• Duals Cost Sharing (S 2234) – The proposal, introduced by Senators Gordon Smith (R-OR) and Jeff Bingaman (D-NM), would require Medicare drug plans to waive cost sharing for dual eligibles in certain community-based residential programs such licensed group homes and other residential treatment settings (just as the law currently requires for dual eligibles in nursing homes and psychiatric hospitals).
• Benzodiazepine Coverage (HR 3151) – The proposal, introduced by Representatives Ben Cardin (D-MD) and Jim Ramstad (R-MN), would repeal the current requirement for Medicare drug plans to exclude coverage of medications known as benzodiazepines (klonopin, ativan, xanax, etc.) and allow drug plans to cover them at their discretion.  It should be noted that the vast majority of states are covering these medications for dual eligibles as allowed by CMS.

NAMI strongly supports both of these proposals and would recommend them as part of any technical or incremental changes that may be moving forward later this year.

Conclusion

Thank you for convening this important hearing.  We share your commitment to making sure that the Medicare drug benefit reaches its full potential to assist seniors and people with disabilities who need coverage for critical prescriptions.