News Release

Secretary Leavitt Issues One-Month Progress Report on Medicare Prescription Drug Benefit

HHS Secretary Mike Leavitt today released a one-month progress report on the Medicare Prescription Drug Benefit that takes a hard look at what is working and what needs to improve. The report details action steps HHS and health plans are taking, such as extending transition coverage for a beneficiary’s current drugs to 90 days and reducing call wait times. The report also includes new estimates showing the costs of the Medicare drug benefit are significantly less than expected.

“While the new prescription drug benefit has worked for the vast majority of participants, the first trip to the pharmacy has been frustrating for some, particularly for certain people with Medicare and Medicaid. We make no excuses. These are our problems to solve and this report shows that we are making progress,” Secretary Leavitt said.

“We are working around the clock to help everyone use their coverage,” said Dr. Mark McClellan, Centers for Medicare & Medicaid Services Administrator. “As we improve our data exchanges with plans, provide new support for pharmacists, work with states, and help beneficiaries who call 1-800-MEDICARE resolve any problems, many more beneficiaries are using their new coverage every day.”

Secretary Leavitt announced that Medicare will notify plans that the 30-day transitional coverage period in effect will continue for 60 more days -- in effect, this means that plans will provide up to 90 days of coverage for a beneficiary’s current drugs. This provides more time for beneficiaries to find out if they can save by using other drugs that work in a very similar way and cost significantly less. This action reinforces steps already taken by many plans, like extending their transitional coverage, to help ensure a smooth transition for beneficiaries.

Leavitt noted that call wait times for pharmacists and customers had been “unacceptable,” and announced efforts to get them significantly reduced. The call-wait time for 1-800-MEDICARE has been around five minutes since the beginning of January, and, at the end of the month, the time was even shorter (less than a minute). While most plans have also taken steps to reduce wait times for customers and pharmacists to acceptable levels, HHS will increase its monitoring and reporting of drug plan wait times and will take corrective actions in the specific cases where plans do not improve.

The progress report also highlights new information about significant savings for taxpayers. The Secretary notes that the latest estimates show that the costs of the Medicare prescription drug benefit are significantly less than expected. Examples include:

• Latest estimates project premiums of $25 a month - about a third less than previously estimated.
• The federal government is now projected to spend about 20 percent less per person in 2006 and, over the next five years, payments are projected to be more than 10 percent lower than first estimated.

The savings result from lower expected costs per beneficiary; projected enrollment in the drug benefit has not changed significantly.

At the report’s conclusion, the Secretary outlines action steps that Medicare is taking, including:

• Making sure drug plans have up-to-date information on all their dual eligible beneficiaries;
• Improving the “data translation” between Medicare, health plans and states;
• Calling 1-800-MEDICARE means virtually no wait time;
• Monitoring and reporting call wait times for drug plans;
• Assuring plans meet contractual payment terms for pharmacies;
• Extending transition coverage for a beneficiary’s current drugs to 90 days;
• Working with the states to assure a backup system is no longer needed;
• Establishing a reimbursement plan for the states and if needed, providing a temporary extension to state reimbursement plan; and
• Continuing the process of problem-solving and improvement -- guided by the lessons learned.

The Secretary added, “The measure of our success should not be that we have no unexpected problems at the outset but rather that we find, fix and finish with these problems quickly so that all seniors have access to coverage that saves them money, keeps them healthier and gives them peace of mind.”

A copy of the full report is available at http://www.hhs.gov/secretaryspage.html.

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Last revised: January 20, 2009