Drug Discount Card

Medicare Drug Discount Card Program Begins: How Will It Affect LTC Residents?

Medicare beneficiaries can begin applying for prescription drug discount cards – a temporary benefit under the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) – as early as next Monday, May 3. No one, however, especially residents in long-term care facilities, should rush to apply for a card before they understand how it would work for them.

Unfortunately, not much information is available for nursing home residents, who will be treated very differently under the program than other Medicare beneficiaries. Below, we try to provide information about what long-term care residents can expect under this program that will be in effect only in 2004 and 2005. As we get more information, we will update this information on the NCCNHR website. Meanwhile, we are interested in hearing about your experiences with implementation of the drug card program.

There are three types of benefits under this voluntary program, which will expire in 2006 when the full Medicare prescription drug benefit becomes effective:

· A Medicare-Approved Prescription Drug Discount Card that will provide discounts on prescription drugs. Numerous companies are offering cards, but pharmacies will not accept all of them. The fee and the discount on various drugs will vary from card to card, but the fee cannot be more than $30.

· A low-income “transitional assistance” card that will provide discounts and $600 a year towards drug purchases for beneficiaries whose incomes fall below 135 percent of the poverty level ($12,569 for an individual; $16,862 for a couple) and who are not receiving Medicaid or other prescription drug assistance. There is no enrollment fee, but there is a small co-pay.

· A transitional assistance card exclusively for nursing home residents whose incomes are below 135 percent of poverty and who do not have other drug coverage, including Medicaid or Medicare Part A. It provides a flat $600 benefit in 2004 and in 2005 and no discount. Only three or four cards are available for nursing home residents to choose from.

The government website at www.medicare.gov has information about eligibility and enrollment, including an interactive program that is supposed to help consumers navigate among the numerous drug cards that are being offered. It will also provide uniform application forms. However, the Medicare website doesn’t provide all the information residents of nursing homes and assisted living facilities need before deciding whether to apply for a drug card.

Here are some things nursing home residents should know about the Medicare discount card program and how it may affect them:

· Private Pay Residents. This will be a shocker for many private pay residents who would like a discount on their prescription drugs: They may obtain a regular Medicare drug discount card – but they may not be able to use it! CMS says nursing homes may require residents to use the facility’s long-term care pharmacy, and most long-term care pharmacies are not expected to honor the cards because of the expense involved. Unless your state has a law that requires nursing homes to let residents choose their pharmacy, residents probably should not pay up to $30 for a discount card that they may not be able to use.

· Medicaid Beneficiaries. “Dually eligible” beneficiaries (those who receive both Medicare and Medicaid) will continue to have their prescription drugs paid for by Medicaid in 2004 and 2005. These residents should not be concerned about the MMA at all as long as they are eligible for Medicaid.

· Low-income Residents Who Are Not Dually Eligible. Only 5 to 15 percent of nursing home residents – those whose incomes fall below 135 percent of poverty and who are not receiving Medicaid, Medicare Part A, or certain other drug coverage – will be eligible for the specially endorsed $600 transitional drug benefit for nursing home residents. The benefit is expected to run out in five or six weeks for these residents, who typically have prescription drug costs of $4,000 to $4,500 a year. Some pharmaceutical companies, however, are saying they will provide free or steeply discounted drugs when transitional benefits expire.

· Residents Who Are in “Spend-down.” Those who are eligible for the specially endorsed nursing home benefit are most likely people who have low incomes but who have assets that disqualify them from Medicaid. Many of these residents may be in a “spend-down” period when their medical expenses are reducing their usable income to the point that they become eligible for Medicaid. Medicaid experts are concerned that these residents could lose Medicaid coverage, which may be of more value to them, if they receive transitional assistance. Little is understood about this potential problem, however.

· Medicare Beneficiaries Who Move Into a Nursing Home from the Community. Beneficiaries who have a transitional assistance card in the community can transfer any balance remaining on the card to a specially endorsed card if they move into a nursing home. A resident with transitional assistance in a nursing home could obtain a regular transitional assistance card if he or she moved back into the community.

While Medicare beneficiaries living in the community can choose among dozens of discount cards, nursing home residents will have only three or four “specially endorsed” cards to choose from. They include:

· The Long Term Care Pharmacy Alliance (LTCPA), a consortium of four national long-term care pharmacies – Kindred, Omnicare, NeighborCare, and PharMerica – who claim to serve three out of five nursing home residents. Although residents are supposed to have a choice of cards, it seems likely that facilities affiliated with these companies will try to influence their residents to use the LTCPA card.

· Community Care Rx, which represents 24,000 community drugstores combined under several umbrella groups, including the Senior Care Pharmacy Alliance.

· PBM Plus, a pharmacy benefit management company owned by Omnicare, the nation's largest provider of pharmacy services to long-term care facilities

Low-income residents who apply for one of these cards should be sure that the long-term care pharmacy used by their facility accepts the card.

Assisted living residents are eligible for the same discount cards as any other resident in the community. That means they can obtain their drugs at any pharmacy in their community or any mail-order pharmacy that accepts the card they’ve chosen. Nevertheless, some assisted living facilities may encourage or coerce residents to forgo the benefit of a discount card and to use a long-term care pharmacy. Facilities prefer long-term care pharmacies because they pre-package medications by dose and provide other services, such as 24-hour delivery. They can also ensure that the drugs are there when needed, not waiting for a resident’s son or daughter to pick them up at the drugstore and deliver them. While these services can be beneficial to consumers, too, assisted living residents should decide for themselves whether the services are worth the higher cost.

For more information about the Medicare-Approved Discount Drug program, check the websites of the Center for Medicare Advocacy, www.medicareadvocacy.org, and the Health Assistance Partnership, www.healthassistancepartnership.org. State Health Insurance Programs (SHIPs) are also gearing up to help Medicare beneficiaries choose prescription drug cards.