Medicare
CMS's Beneficiary Education and Outreach Efforts for the Medicare Prescription Drug Discount Card and Transitional Assistance Program Gao ID: GAO-06-139R November 18, 2005The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 required the Centers for Medicare & Medicaid Services (CMS) in the Department of Health and Human Services (HHS) to broadly disseminate information on the program to the millions of Medicare beneficiaries--seniors and people under age 65 with permanent disabilities--who are eligible for a drug discount card. In response, CMS began education and outreach efforts designed to publicize the availability and features of the drug discount cards, provide information to facilitate beneficiary choice, and assist beneficiaries with the enrollment process. Congress asked us to provide information on CMS's efforts because the agency's experience in supporting the drug card program may yield important insights relevant to implementing the new prescription drug benefit that becomes effective in 2006. In this report, we (1) describe CMS's education and outreach efforts in support of the drug card program and review assessments of these efforts by public and private health care research organizations and (2) provide data on enrollment in the drug card program and identify factors that may have limited this enrollment.
CMS implemented a variety of education and outreach efforts that included the use of mass media and individualized counseling to inform beneficiaries about the drug card program and to assist in enrollment. Assessments we reviewed showed that CMS was effective in raising awareness of the drug card program, but was less effective in its efforts to inform and assist beneficiaries. In general, studies found that CMS's efforts did not consistently provide information that was clear, accurate, and accessible, and they collectively fell short of conveying program features. At the same time, these assessments acknowledge the actions taken by CMS to address some of these problems. Studies we examined indicated that disseminating information via mass media and direct mail may not have been effective in reaching beneficiaries, particularly those with low incomes. Studies also found that CMS's telephone help line and Web site did not always provide the information beneficiaries needed to choose a card that was best for them. Assessments also showed that CMS-funded State Health Insurance Assistance Programs offering one-on-one counseling provided valuable assistance to beneficiaries but were limited in the number of people they could serve. An analysis of CMS partnerships with community-based organizations showed that these organizations could have been utilized more effectively in promoting the drug card program. As of September 1, 2005, about 6.4 million Medicare beneficiaries were enrolled in the drug card program, including 1.9 million who received transitional assistance. Many more beneficiaries were automatically enrolled than enrolled on their own. A variety of factors may have limited enrollment in the program. CMS attributed the extent of enrollment to confusion and misperceptions about the drug cards among Medicare beneficiaries. In addition, other assessments noted that the drug card program's unfamiliar design, abundance of choices, and uncertain value may have discouraged some beneficiaries from enrolling.
GAO-06-139R, Medicare: CMS's Beneficiary Education and Outreach Efforts for the Medicare Prescription Drug Discount Card and Transitional Assistance Program
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November 18, 2005:
The Honorable Henry A. Waxman:
Ranking Minority Member:
Committee on Government Reform:
House of Representatives:
Subject: Medicare: CMS's Beneficiary Education and Outreach Efforts for
the Medicare Prescription Drug Discount Card and Transitional
Assistance Program:
Dear Mr. Waxman:
Established by the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA), the Medicare Prescription Drug
Discount Card and Transitional Assistance Program[Footnote 1] is
designed to help participants obtain prescription drugs at reduced
prices.[Footnote 2] All Medicare beneficiaries, except those with drug
coverage through Medicaid, are eligible to enroll in the program to
obtain drug discount cards, which are offered through private sector
sponsors. In addition, enrollees in the program with low incomes who
lack other drug coverage are also eligible for up to $600 each year in
transitional assistance to help pay for their prescriptions. The drug
card program, which began enrolling beneficiaries in May 2004, serves
as an interim measure until January 1, 2006, when, in accordance with
MMA, a prescription drug benefit becomes available to the nearly 42
million people enrolled in Medicare.
MMA required the Centers for Medicare & Medicaid Services (CMS) in the
Department of Health and Human Services (HHS) to broadly disseminate
information on the program to the millions of Medicare beneficiaries--
seniors and people under age 65 with permanent disabilities--who are
eligible for a drug discount card. In response, CMS began education and
outreach efforts designed to publicize the availability and features of
the drug discount cards, provide information to facilitate beneficiary
choice, and assist beneficiaries with the enrollment process. You asked
us to provide information on CMS's efforts because the agency's
experience in supporting the drug card program may yield important
insights relevant to implementing the new prescription drug benefit
that becomes effective in 2006. In this report, we (1) describe CMS's
education and outreach efforts in support of the drug card program and
review assessments of these efforts by public and private health care
research organizations and (2) provide data on enrollment in the drug
card program and identify factors that may have limited this
enrollment.[Footnote 3]
To do our work, we focused on several key education and outreach
efforts that CMS used to provide Medicare beneficiaries with
information on the drug card program. We interviewed CMS officials
involved in planning and implementing the program's education and
outreach efforts and reviewed relevant agency documents. We also
reviewed various assessments of CMS's drug card campaign as well as
relevant studies of some of CMS's traditional means of disseminating
information about Medicare. Specifically, we reviewed assessments by
various research organizations, other government entities, and
beneficiary advocacy groups as well as our own previous reports. These
included assessments conducted by AARP, Abt Associates, the American
Enterprise Institute (AEI), the Congressional Research Service (CRS),
the Kaiser Family Foundation (KFF), the Medicare Payment Advisory
Commission (MedPAC) and the Medicare Rights Center. We provided
information on CMS's expenditures on specific efforts in the drug card
campaign to the extent such information was available.
We obtained program enrollment data from CMS. To initiate a
beneficiary's enrollment for the drug discount card and for
transitional assistance, CMS determines the applicant's eligibility
using Medicare and Medicaid enrollment data and federal sources of
income data. Although we did not independently verify the accuracy of
CMS's program enrollment data, we believe they are sufficiently
reliable for the purposes of this report. Our work was performed from
May 2005 through November 2005 in accordance with generally accepted
government auditing standards.
Results in Brief:
CMS implemented a variety of education and outreach efforts that
included the use of mass media and individualized counseling to inform
beneficiaries about the drug card program and to assist in enrollment.
Assessments we reviewed showed that CMS was effective in raising
awareness of the drug card program, but was less effective in its
efforts to inform and assist beneficiaries. In general, studies found
that CMS's efforts did not consistently provide information that was
clear, accurate, and accessible, and they collectively fell short of
conveying program features. At the same time, these assessments
acknowledge the actions taken by CMS to address some of these problems.
Studies we examined indicated that disseminating information via mass
media and direct mail may not have been effective in reaching
beneficiaries, particularly those with low incomes. Studies also found
that CMS's telephone help line and Web site did not always provide the
information beneficiaries needed to choose a card that was best for
them. Assessments also showed that CMS-funded State Health Insurance
Assistance Programs offering one-on-one counseling provided valuable
assistance to beneficiaries but were limited in the number of people
they could serve. An analysis of CMS partnerships with community-based
organizations showed that these organizations could have been utilized
more effectively in promoting the drug card program.
As of September 1, 2005, about 6.4 million Medicare beneficiaries were
enrolled in the drug card program, including 1.9 million who received
transitional assistance. Many more beneficiaries were automatically
enrolled than enrolled on their own. A variety of factors may have
limited enrollment in the program. CMS attributed the extent of
enrollment to confusion and misperceptions about the drug cards among
Medicare beneficiaries. In addition, other assessments noted that the
drug card program's unfamiliar design, abundance of choices, and
uncertain value may have discouraged some beneficiaries from enrolling.
Background:
The drug card program is operated through private drug card sponsors,
approved by CMS, and provides discounts off the retail price of
prescription drugs.[Footnote 4] On average, beneficiaries have a choice
of 37 general drug discount cards--including both national (nationwide)
and regional (state specific) cards--and pay an annual enrollment fee
of $19.[Footnote 5] To enroll, beneficiaries may submit standardized
information to a drug card sponsor by mail, telephone, or via the
Internet. An open enrollment period was established at the end of 2004
for beneficiaries who wished to change their card selection.
Transitional assistance is available for Medicare beneficiaries who are
at or below 135 percent of the federal poverty level and not enrolled
in any public or private insurance plans that provide drug
coverage.[Footnote 6] Beneficiaries who qualify do not have to pay an
enrollment fee, pay 10 percent or less of each prescription's retail
price, and receive a $600 annual credit toward their drug
purchases.[Footnote 7] Beneficiaries apply for transitional assistance
through card sponsors. CMS then verifies the beneficiary's income and
drug coverage status, determines eligibility, and notifies the drug
card sponsor, which informs the beneficiary of the decision.[Footnote
8] Low-income beneficiaries currently enrolled in pharmaceutical
manufacturers' card programs--arrangements that offer discounts on
particular manufacturers' drugs--may also enroll in a discount card
program to take advantage of the $600 transitional assistance.
For various groups of beneficiaries, enrollment in the Medicare drug
card program may be made automatically--with an option for the
individual to decline--by virtue of beneficiaries' participation in
other Medicare or state programs. Beneficiaries in managed care plans-
-Medicare Advantage--may be group enrolled in exclusive drug cards
sponsored by their health plans.[Footnote 9] In some states, state
pharmacy assistance programs, which provide prescription drugs at low
or no cost to needy Medicare beneficiaries and others who do not
qualify for Medicaid, may automatically enroll beneficiaries in a drug
card program and choose to pay the enrollment fee and
coinsurance.[Footnote 10] In addition, CMS decided to facilitate
enrollment in the discount card program for certain low-income
beneficiaries.
CMS estimated that beneficiaries enrolling in drug card programs would
experience significant savings on their prescription drugs. The
discounts would vary depending on the drug card selected, the drugs
purchased, and the pharmacy used. According to an October 2004 CMS
study, prices for commonly used brand-name drugs under the discount
card program ranged from 12 to 21 percent below national average retail
pharmacy prices. It stated that savings for generic drugs were larger,
with prices ranging from 28 to 75 percent lower than the typical price
paid nationally.
In implementing its education and outreach efforts, CMS focused on
enrolling those beneficiaries most likely to benefit from the drug
discount card and transitional assistance program. Not all
beneficiaries eligible to enroll in the drug card program were expected
to do so because many have coverage through other sources. CMS assumed
that those who could benefit from the card and subsidy were low-income
beneficiaries eligible for transitional assistance and beneficiaries
who were not low income but either had no or limited drug
coverage.[Footnote 11] Therefore, in developing and disseminating
messages and materials promoting the drug card program, the agency
placed special emphasis on low-income beneficiaries.
CMS had a limited amount of time to plan and launch the drug card
program. Although agency officials started planning for the discount
card shortly before enactment of MMA, they did not begin developing a
strategy for communicating with beneficiaries until regulations
detailing the requirements of the new program were issued on December
15, 2003. MMA required that the Medicare discount card program begin
operating within 6 months of enactment. The education campaign began in
January 2004; enrollment for the drug card began May 3, 2004; and the
card was effective June 1, 2004.
To evaluate its 2004 education and outreach efforts, CMS initiated a
lessons learned process whereby information was collected from various
entities involved in the drug card program. They included CMS central
office staff, regional office staff, and contractors hired to provide
marketing reviews and CMS customer service. In total, 212 individuals
participated in discussions to obtain information on the effectiveness
of various elements of the agency's communications strategy and how
best to implement Medicare's prescription drug benefit program. The
results of this process were reported in February 2005.[Footnote 12]
CMS Used Multiple Education and Outreach Efforts; Assessments of These
Efforts Identified Weaknesses:
CMS relied on multiple education and outreach efforts--some that used
mass communication and others that provided individualized attention--
to support the drug card program. Specifically, these efforts included
media advertising, direct mail, Medicare's Web site and toll-free help
line, one-on-one counseling, and partnerships with community
organizations. Assessments we reviewed showed that CMS was effective in
raising awareness of the drug card program, but its efforts were
limited in their ability to inform and assist beneficiaries. Studies
indicated that CMS's education and outreach activities did not
consistently provide information that was clear, accurate, and
accessible. Reports also indicated that, in some cases, CMS made
improvements when problems were identified.
Media Advertising and Direct Mail:
As part of its education and outreach efforts, CMS initiated a
multimedia advertising campaign--the National Publicity Campaign--in
2004 to generate awareness about changes to the Medicare program,
including the 2006 prescription drug benefit and the interim drug card
program, as well as sources of additional information. By February
2004, CMS began using television and print media to introduce
beneficiaries to the changes in Medicare established by MMA. In spring
2004, CMS launched another series of advertisements specifically to
educate Medicare beneficiaries on the availability of drug discount
cards and their key features. A third set of advertisements in late
summer and early fall 2004 sought to encourage enrollment by
highlighting the savings offered through the drug discount cards.
According to CMS, in fiscal year 2004, funding for the National
Publicity Campaign was approximately $65 million.
Another component of the National Publicity Campaign relied on several
direct mailings to promote the drug card program. According to CMS
officials, the agency's discount card materials were consumer-tested to
ensure they were understandable by various population groups, including
beneficiaries with low literacy, poor English proficiency, or low
income. In its first mailing, in February 2004, CMS sent a letter and a
flyer to all Medicare beneficiaries alerting them to the drug discount
cards as well as to the upcoming 2006 prescription drug benefit. In
April 2004, CMS issued a second direct mailing, this time a three-page
description of the drug card program. Another more targeted letter was
sent that month to persons with Social Security payments below the
income eligibility threshold established to qualify for transitional
assistance. This communication focused on the benefits available to low-
income persons and the process for obtaining a card and applying for
the $600 credit. According to CMS officials, the agency spent at least
$18 million of its publicity campaign funds on these mailings.
Assessments of the National Publicity Campaign found that the impact of
the campaign was mixed. On the one hand, it helped generate awareness
that the drug card program existed. In a June/July 2004 survey
developed by KFF and the Harvard School of Public Health, fewer than
one-third of respondents 65 years of age or older said they were aware
of the drug card program.[Footnote 13] A November/December 2004 follow-
up survey showed that 86 percent of respondents over the age of 65 were
aware of the discount card program, and 67 percent said they were aware
of the $600 subsidy.[Footnote 14]
On the other hand, CMS was less successful in conveying essential
features about the discount cards. Based on focus groups conducted in
fall 2004 and winter 2005, Abt Associates reported that one-quarter to
one-half of beneficiaries were unaware that there was more than one
drug card to choose from.[Footnote 15] In addition, in its February
2005 self-evaluation, CMS reported that the campaign was not effective
in educating beneficiaries on the details and complexities of the
program, especially on how to obtain transitional assistance. The
agency noted that weaknesses in the communications strategy it
developed prior to the launch of the drug card program may have led to
these shortcomings. It cited, for example, the volume and content of
CMS and drug card sponsor outreach material as contributing factors. In
a legal analysis issued in March 2004, we found that CMS's initial
print advertisements contained a number of significant omissions. For
example, while all of the materials we reviewed mentioned the new drug
discount cards, none indicated that the cards may not be free and that
savings may vary among drugs.[Footnote 16]
The assessments we reviewed also found limitations in the use of direct
mail to help increase enrollment in health care initiatives. In
particular, studies have shown that direct mailings may not be an
effective outreach tool for Medicare beneficiaries with low incomes. In
its report, MedPAC found that low literacy rates, poor English
proficiency, and unfamiliarity with health care programs limit low-
income beneficiaries' ability to comprehend and act on direct mail
instructions.[Footnote 17] Similarly, in 2004 we reported that a 2002
direct mailing to low-income Medicare beneficiaries by the Social
Security Administration (SSA) had a low response rate. SSA conducted a
direct mailing campaign to encourage low-income beneficiaries to enroll
in a program that provided assistance with premiums and other out-of-
pocket costs associated with Medicare. Of the 16.4 million low-income
beneficiaries that SSA targeted with the mailing, we found that 74,000
additional eligible beneficiaries--about 0.5 percent of all letter
recipients--enrolled in Medicare savings programs than would have
likely enrolled without the letter.[Footnote 18]
Among low-income elderly, a lack of knowledge regarding the drug
discount card and transitional assistance persisted into the summer. In
a June/July 2004 survey, KFF and Harvard School of Public Health found
that 70 percent of beneficiaries with incomes below $15,000 did not
know enough to say if the drug discount cards were part of the new
Medicare drug law, and only 13 percent of those surveyed were aware
that low-income beneficiaries can receive a $600 credit.[Footnote 19]
Medicare Web Site:
In addition to the National Publicity Campaign, CMS used its Medicare
Web site--www.medicare.gov--to educate beneficiaries about the drug
card program and the choices they have when selecting a card. In
particular, users of the Web site could access a tool called the
Prescription Drug Assistance Program (PDAP), which was developed to
help beneficiaries determine whether they were eligible to enroll in
the drug card program, decide whether to enroll, and select the
discount card that best suited their needs. Launched in April 2004,
PDAP allowed users to compare drug cards by displaying information on
the pharmacies that accept each card, the drugs each sponsor covers in
its formulary, and the prices beneficiaries should expect to pay for
these drugs.[Footnote 20] CMS also included a price comparison feature
on PDAP so that users could compare drug prices offered through the
various discount cards based on dosage and quantity.
To use PDAP, beneficiaries entered their zip codes and responded to a
series of questions that were used to determine eligibility for the
drug card program. Next, beneficiaries selected the drugs they use
regularly along with dosage and monthly quantity. PDAP then generated a
list of available drug card sponsors and the prices available through
their cards. Because a beneficiary may prefer a specific pharmacy, PDAP
could search for a list of drug cards that a particular pharmacy
accepts.
Several assessments that reported on PDAP found that the Web-based tool
was an important resource for Medicare beneficiaries and those who
assist them in selecting drug discount cards. In general, these
assessments indicated that PDAP could perform the complex calculations
required to determine the comparative value of numerous discount cards
available to eligible beneficiaries. For example, both CRS and MedPAC
observed that the comparative information provided by PDAP was valuable
for family members and others who help beneficiaries select a drug
card.[Footnote 21]
Although PDAP was viewed as an important resource, several studies
found that when the tool was first introduced, it did not always
provide accurate information. Assessments indicated that the Web-based
tool listed inaccurate drug prices and pharmacies that were not
participating in the drug card program. According to CRS, because CMS
posted the maximum price cited by drug card sponsors, some prices
displayed on PDAP were too high. In addition, we found that some
pharmacies reported being incorrectly listed as participating in the
program, but most of the inaccurate listings were attributed to
pharmacies being unaware that they had contracted to participate in a
card sponsor's network, according to CMS.[Footnote 22] In response to
these problems, CMS officials told us that they updated and verified
drug pricing and corrected the pharmacy participation information.
Another issue reported by CRS was that some users may have had
difficulty navigating the Web site, and MedPAC reported that
beneficiaries were overwhelmed by the number of drug cards from which
they could choose.[Footnote 23] According to KFF, most beneficiaries do
not use the Internet, and even those who assist them often found the
Web-based information more perplexing than helpful. An April 2004 KFF
survey showed that use of the Internet by seniors is growing but
overall remains low, with about 70 percent of those age 65 or over
reporting that they never use the Internet. Of those who do go online,
2 percent reported having visited Medicare's Web site. Furthermore,
according to KFF, the use of the Internet among beneficiaries also
varied significantly by income. For those with incomes below $20,000--
nearly two-thirds of seniors in 2002--only 15 percent have ever used
the Internet. For beneficiaries with incomes above $50,000--about 1 in
12 seniors in 2002--65 percent reported having ever used the
Internet.[Footnote 24]
By July 2004, CMS officials took steps to make PDAP more user friendly.
For example, CMS created an option to sort and view the top five drug
cards with the lowest cost for the beneficiary and provided information
on the annual savings offered by various drug cards. While CMS
addressed certain problems associated with PDAP, these changes did not
eliminate the challenge for CMS in using the Internet as an information
resource for Medicare beneficiaries.[Footnote 25]
Medicare Telephone Help Line:
One of the goals of the National Publicity Campaign was to make the
public aware of CMS's telephone help line--1-800-MEDICARE--as a primary
source of information on the Medicare program, including information on
the drug card program. The toll-free telephone help line is a vehicle
for Medicare beneficiaries, their families, and other members of the
public to obtain answers to their questions about the drug card program
features and enrollment. During the 6 months following the enactment of
MMA, the help line handled over 9 million calls--many of which involved
questions about prescription drug coverage--more than triple the number
handled in the previous 6 months.
As the volume of calls directed to the help line about the drug card
program increased, there were concerns about the accuracy and
completeness of the information provided by the help line's customer
service representatives (CSR). In December 2004, we reported that CSRs
had substantial inaccuracy rates when answering questions about the
drug discount card and transitional assistance.[Footnote 26] For
example, one question we posed to CSRs about income eligibility for the
$600 credit was answered inaccurately in 55 out of 70 calls, generally
because the CSRs did not seek the needed information on the sources of
beneficiaries' incomes to correctly answer the question. On another
question, CSRs responded with inaccurate answers in 10 out of 70 calls
when asked to identify the lowest cost card available at a particular
pharmacy, given an individual's specific pharmaceutical needs.
Other research organizations have also raised concerns about how
information on the drug card program is communicated via 1-800-
MEDICARE. MedPAC reported that CSRs provided too much information,
rather than helping beneficiaries narrow their options, and that
operators conveyed inaccurate information. In addition, KFF and CRS
have commented on the long wait times associated with the help
line,[Footnote 27] and the Medicare Rights Center reported frequent
disconnections following the influx of calls due to the National
Publicity Campaign.[Footnote 28] In response to the increased call
volume, CMS had added over 800 CSRs by October 2004, more than doubling
the number of staff previously available.
One-on-one Counseling:
For Medicare beneficiaries and their families seeking individual
assistance with the drug card program, CMS supports one-on-one
counseling through State Health Insurance Assistance Programs (SHIP).
Operated by states and funded through CMS:
grants, SHIPs use over 12,000 trained counselors--mostly volunteers--to
provide information and assistance on a wide range of Medicare and
Medicaid issues. In 2003, CMS reported that SHIP programs nationwide
served over 2 million Medicare beneficiaries, with about 1.2 million of
those receiving assistance through one-on-one counseling sessions--in
person and over the telephone--and approximately 800,000 receiving
assistance through presentations and public education outreach. For the
drug card program, these counselors helped beneficiaries and their
families make selection decisions using PDAP and assist those applying
for transitional assistance. In 2004, SHIPs resources--$21 million--
were primarily devoted to informing beneficiaries and their families
about the drug card program. In fiscal year 2005, CMS increased funding
for SHIPs by about 50 percent, to roughly $31 million, to expand these
efforts.
CRS has noted that one-on-one counseling and assistance to
beneficiaries provided by SHIPs have been essential complements to the
information disseminated more generally through CMS's other education
efforts, such as 1-800-MEDICARE and the Medicare Web site. For its June
2005 report, MedPAC examined the challenges that state officials and
beneficiary advocates face in educating beneficiaries about the
discount card program. MedPAC suggested that CMS adequately fund SHIP
outreach activities and direct beneficiaries to SHIPs for personalized
assistance with the program. At the same time, MedPAC acknowledged that
SHIPs alone are not able to counsel all Medicare beneficiaries who may
need one-on-one counseling.
Partnerships with Local Organizations:
As the SHIPs demonstrate, CMS relies on local outreach to help
disseminate information and assist beneficiaries. Consistent with this
strategy, the agency has developed an outreach effort known as the
Regional Education About Choices in Health (REACH) program to increase
awareness about changes in Medicare for beneficiaries not generally
reached by national efforts due to barriers of language, literacy,
location, income, or culture. REACH relies on local community-based
organizations to use established networks for distributing health care
information to serve beneficiaries in familiar, community settings. In
2004, CMS sponsored training sessions and distributed targeted
materials to REACH partners to help them inform beneficiaries and
facilitate enrollment for the drug card program and transitional
assistance.
In addition, CMS has partnered with the Access to Benefits Coalition
(ABC), a group of national nonprofit organizations--including AARP, the
Salvation Army, and the American Hospital Association--and 56 local
coalitions that help low-income Medicare beneficiaries use private and
public resources to save money on prescription drugs. To complement
CMS's efforts, ABC awarded $2 million to its network of grassroots
groups to educate and enroll lower income beneficiaries in the drug
card program. It set a short-term goal to ensure that at least 5.5
million low-income beneficiaries would receive the $600 annual
transitional assistance credit by the end of 2005. ABC also developed a
Web-based tool for counselors and others to use to determine the
individualized combination of programs--the drug card program, state
pharmacy assistance programs, manufacturer's discount card programs,
and drug company patient assistance programs--that maximize beneficiary
savings.
Similarly, in 2004, CMS, in cooperation with HHS's Administration on
Aging, contracted with Ogilvy Public Relations Worldwide and spent $6.1
million to select, support, and evaluate community-based organizations
to provide outreach related to the drug card. More than 100
organizations, including area agencies on aging, social service
providers, health care agencies, and faith-based organizations, were
selected to target low-income, hard-to-reach beneficiaries, including
those in medically underserved communities. Most were funded to
complete their work from September 2004 through February 2005. Under
the terms of their subcontracts with Ogilvy, the community-based
organizations agreed to meet measurable performance standards regarding
the specific number of beneficiaries they educated, assisted, and
enrolled. Local organizations that fell short of achieving their agreed-
upon performance standard for the number of beneficiaries whom they
assisted with enrollment faced a reduction in their final payment.
Assessments of CMS's efforts to support the drug card program through
partnerships with local organizations are limited. We identified an
evaluation by Ogilvy that was submitted to CMS in May 2005. That report
stated that community-based organizations funded by the partnership
assisted nearly 900,000 beneficiaries in the enrollment process, but
raised questions about whether these organizations were adequately
prepared for the task.[Footnote 29] Among the shortcomings cited by
community-based groups, as reported in the Ogilvy report, were (1)
organization leaders received training and orientation, but the
training provided to staff and volunteers was insufficient to prepare
them to answer the often complicated questions from beneficiaries; (2)
the organizations experienced initial frustration and difficulties
accessing and using CMS materials, including the Medicare Web site; and
(3) outreach to nonelderly disabled beneficiaries was limited, largely
because many community-based organizations did not feel qualified or
equipped to serve this specific population.
About 6 Million Beneficiaries Obtained a Drug Discount Card; Several
Factors May Have Limited Enrollment:
Approximately 6 million beneficiaries are enrolled in the drug card
program and nearly one-third of these participants received
transitional assistance with their drug card. Many more beneficiaries
were automatically enrolled than enrolled on their own. The number of
beneficiaries in this latter group fell below an enrollment projection
set by CMS but exceeded one set by the Congressional Budget Office
(CBO). A variety of factors--beneficiary confusion as well as features
in the program's design--may have limited enrollment in the drug card
program.
Of the 6 Million Enrollees, Nearly Two-Thirds Were Automatically
Enrolled:
As of September 1, 2005, approximately 6.4 million Medicare
beneficiaries had obtained discount cards through the drug card
program. This number included 4.5 million beneficiaries who had
obtained only the discount cards and another 1.9 million who obtained
both discount cards and transitional assistance. Roughly two-thirds of
participants enrolled early in the program--May through July 2004. (See
fig. 1.) To enhance enrollment, CMS randomly assigned drug cards to
beneficiaries in Medicare Saving Programs (MSP), which cover various
Medicare-related out-of-pocket costs for certain low-income
beneficiaries.[Footnote 30] Drug card sponsors mailed drug cards to
about 1.1 million of the beneficiaries in MSPs in October 2004 and to
about 120,000 of these beneficiaries in February 2005.[Footnote 31]
Approximately 12 percent of those who received these cards from the
agency applied for and obtained transitional assistance.
Figure 1: Enrollment in the Drug Card Program May 2004 through August
2005:
[See PDF for image]
Note: In May 2004, the first month of the program, 66,910 beneficiaries
enrolled in a drug discount card and received transitional assistance.
Data are as of the last Thursday or Friday of the month.
[End of figure]
CMS data also demonstrated that slightly more than a third of the
Medicare beneficiaries who enrolled in the drug card program did so on
their own. As shown in table 1, of the 6.4 million total discount card
program participants, we estimate that 2.3 million enrolled on their
own initiative, and 4.1 million were automatically enrolled by virtue
of their participation in other Medicare or state assistance programs.
Table 1: Estimated Autoenrollment and Self-Enrollment in the Drug
Discount Card and Transitional Assistance Program, September 2005:
[See PDF for image]
Source: GAO analysis of CMS data.
Note: Enrollments effective as of September 1, 2005.
[A] Medicare Advantage refers to Medicare's managed care plan options.
[B] Medicare Savings Programs assist low income beneficiaries by paying
for some or all Medicare premiums and deductibles.
[C] State Pharmacy Assistance Programs provide low income and other
beneficiaries with financial assistance for prescription drugs.
[End of table]
Despite efforts to facilitate enrollment, the number of beneficiaries
who obtained discount cards with transitional assistance--1.9 million-
-fell significantly below CMS's projection. CMS anticipated that its
drug card program, in general, would have the highest participation
rate among those beneficiaries who would also qualify for transitional
assistance. Specifically, the agency estimated that 4.7 million of the
beneficiaries eligible for transitional assistance in 2004 would enroll
in the drug card program and receive transitional assistance.[Footnote
32] CMS based this estimate on a variety of factors, including
enrollment rates in similar programs and the nature and duration of the
drug card program. In contrast, the 1.9 million beneficiaries who
obtained discount cards with transitional assistance exceeded a CBO
estimate. In a July 2004 paper, CBO estimated that about 20 percent of
those eligible for transitional assistance, or 1 million beneficiaries,
would enroll in the drug card program and receive the $600 credit. CBO
estimated that relatively few beneficiaries would participate in the
interim program because of the program's relatively short duration
before the 2006 prescription drug benefit takes effect and the
perception that the interim program is of limited value.[Footnote 33]
Beneficiary Confusion and Program Design:
Issues May Have Limited Enrollment:
Assessments indicate that the level of enrollment in the drug card
program--especially among those receiving transitional assistance--may
be explained by a variety of factors. In particular, studies we
reviewed found that beneficiary confusion about the drug card program
as well as weaknesses in the program's design may have deterred some
beneficiaries from enrolling.
Beneficiary Confusion:
One factor that may have limited enrollment is some beneficiaries'
reduced ability to access information and make effective choices about
different health care options. The Medicare population has significant
vulnerabilities in terms of health and cognitive status: 71 percent of
beneficiaries have two or more chronic conditions, 29 percent are in
fair or poor health, and 23 percent have cognitive
impairments.[Footnote 34] Efforts to inform beneficiaries are
particularly challenging with older members of minority, low-income,
limited English-speaking, and other underserved populations. Research
has shown that beneficiaries lack a basic understanding of the Medicare
program, and even those who know the fundamentals have significant
information gaps.
In the case of the drug card program, CMS has acknowledged that
confusion or misperceptions about the drug cards among Medicare
beneficiaries may have affected enrollment. In its February 2005 self-
assessment, CMS found that despite the agency's education and outreach
efforts, beneficiaries confused the drug card with the 2006
prescription drug benefit, and some beneficiaries did not enroll
because they were under the impression that Medicare would be sending
them a card. Furthermore, the concept of a private drug card sponsor
was difficult for many beneficiaries to understand. In addition, CMS
found that some beneficiaries may not have enrolled because they
believed they were ineligible for the discount cards. Specifically,
many beneficiaries incorrectly thought that the drug card was only for
low-income people, and those who likely qualified for the $600 in
transitional assistance did not believe they qualified for it, even
after having the income criteria explained to them. CMS also asserted
that there was a misconception that acceptance of the $600 transitional
assistance would negatively impact a beneficiary's eligibility for
other assistance programs, such as housing and food stamps.
Design Features:
Several features of the drug card program's design may also have
limited enrollment. First, because it was designed as a voluntary opt-
in program for most eligible beneficiaries, it represents a significant
change in individual responsibility. KFF noted that requiring an active
decision and effort may seem unfamiliar to, or be difficult for, some
beneficiaries. Unlike more customary expansions in coverage under fee-
for-service Medicare--where a new benefit is automatically available to
beneficiaries--the drug card program asked beneficiaries to decide to
enroll; choose a card; submit enrollment information; and in some
instances, apply for transitional assistance. KFF also reported that
some Medicare beneficiaries lack familiarity with the concept of drug
discount cards and with the tools--for instance using Medicare's PDAP
to compare drug prices--that could be used to help make a decision to
obtain a drug card. Because of the increased individual responsibility,
automatic enrollment proved more effective than voluntary enrollment in
increasing participation in the program.
Another factor in the program's design that may have limited enrollment
was the number of card options beneficiaries could consider in making
their choice. As noted by CRS, studies have shown that the
responsibility of choosing from a broad array of options can lead to
inaction. In the case of the drug card program, the availability of 37
cards, on average, has made it difficult and time-consuming for
beneficiaries to compare their drug card options. KFF and MedPAC
reports noted that the amount of information on available cards and
participating pharmacies, and the complexity of drug pricing, may have
been overwhelming for many beneficiaries and others assisting them. CRS
concluded that the large number of cards from which to choose may have
deterred beneficiaries from choosing to enroll.
Finally, studies we reviewed suggested that enrollment in the program
depended, in part, on beneficiaries' assessment of the value of the
drug cards. The greater the perceived value of the discounts offered by
the card, the more likely beneficiaries were to make the effort to
obtain a card. However, MedPAC found that beneficiaries were uncertain
about the value of drug cards, or perceived that they offered
relatively small savings, and therefore saw no need to enroll in the
program. AEI suggested that since most Medicare beneficiaries already
have some type of prescription drug coverage, they may have assumed
that a discount card program would be of little value to them.[Footnote
35] Abt focus group participants reported that they found other ways to
reduce costs below what the cards offer, such as getting free samples
from their provider(s), using discount cards from other groups, and
getting drugs from Canada or Mexico. As noted earlier, according to
CBO, the temporary nature of the drug card program--the program was
designed to operate for no more than 18 months--may have contributed to
low participation.
Agency Comments:
We provided a draft of this report for comment to the Administrator of
CMS, and we received written comments. (See enc.)
CMS commented that the draft report did not provide a complete account
of all its education and outreach activities in support of the drug
card program. However, we examined several key education and outreach
efforts that CMS used to provide Medicare beneficiaries with
information on the drug card program. We focused on these key efforts
because they were identified as elements in CMS's own communication
plan for the drug card program and were highlighted by CMS officials.
Furthermore, these key efforts accounted for a substantial portion of
CMS's budget for beneficiary education.
CMS provided examples of additional partnerships that we did not
include in our report. It highlighted grants to the Department of
Agriculture, Indian Health Service, Administration on Aging, and the
National Governors' Association. In our review of activities with
partner organizations, we focused on those entities that received
substantial resources--over $1 million--to provide education and
assistance largely to low income beneficiaries.
CMS commented that the draft report presents particularly negative
assessments of CMS's efforts, rather than the studies that CMS itself
conducted as part of its overall oversight activities. In our draft, we
did include discussions of several education and outreach efforts that
assessments found to be useful to beneficiaries. Specifically, we noted
studies that reported the price comparison information on the Medicare
Web site was an important resource for beneficiaries as well as for
those who assist them in selecting a drug card. We also reported that
one-on-one counseling provided by SHIPs was an essential complement to
CMS's other education efforts.
CMS expressed concern about a reference to our December 2004 report in
which we found that CSRs had substantial inaccuracy rates when
answering questions about the drug discount card and transitional
assistance. Specifically, we reported that CSRs inaccurately answered
55 of 70 calls on eligibility for transitional assistance. While CMS
questioned the accuracy rate we reported at the time, we continue to
believe that this finding was correct, based on the income information
we supplied to the CSRs.
CMS commented that we omitted a factor that may have contributed to
limited enrollment in the drug card program. Specifically, CMS observed
that we did not mention that beneficiaries who take few or no
prescription drugs have limited incentive to enroll. However, we did
not find this factor identified in the assessments we reviewed.
Furthermore, 2003 data show that 89 percent of seniors report taking
prescription drugs, and of those nearly half report using 5 or more
different drugs.[Footnote 36]
CMS also provided clarifying information and technical comments, which
we incorporated as appropriate.
As agreed with your office, we plan no further distribution of this
report until 30 days after its date. At that time, we will send copies
of this report to the Administrator of CMS, appropriate congressional
committees, and other interested parties. We will also make copies
available to others upon request. In addition, the report will be
available at no charge on the GAO Web site at http://www.gao.gov.
If you or your staff have any questions, please contact me at (312) 220-
7600 or at aronovitzl@gao.gov. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last
page of this report. Other contributors to this report include Rosamond
Katz, Assistant Director; Krister P. Friday; and Shirin Hormozi.
Sincerely yours,
Signed by:
Leslie G. Aronovitz:
Director, Health Care:
Enclosure:
Comments from the Centers for Medicare & Medicaid Services:
DEPARTMENT OF HEALTH & HUMAN SERVICES:
Centers for Medicare & Medicaid Services:
Administrator:
Washington, DC 20201:
DATE: NOV 8 2005:
TO: Leslie G. Aronovitz:
Director, Health Care:
Government Accountability Office:
FROM: Mark B. McClellan, M.D., Ph.D./Administrator:
Centers for Medicare & Medicaid Services:
SUBJECT: Government Accountability Office's (GAO) Draft Report:
MEDICARE: CMS's Beneficiary Education and Outreach Efforts for the
Medicare Prescription Drug Discount Card and Transitional Assistance
Program (GAO-06-139R):
We appreciate having the opportunity to review and comment on the GAO
draft correspondence entitled, MEDICARE: CMS's Beneficiary Education
and Outreach Efforts for the Medicare Prescription Drug Discount Card
and Transitional Assistance Program (GAO-06-139R). Since the start of
the Drug Card Program, CMS has put into practice a wide range of
beneficiary education and outreach activities. These program elements
were implemented according to a very short time frame required by
statute. Such an undertaking is unprecedented for a program of limited
duration. Moreover, all of our activities were initiated in the first
year of the program, a remarkable accomplishment. As a result, almost 7
million beneficiaries who did not have complete drug coverage are
saving billions of dollars on their drug costs.
While the correspondence points out some shortcomings that we have
worked to address in implementing CMS's many education and outreach
efforts, it did not create the full picture of the depth and breadth of
the actual activities undertaken. In fact, much of the analysis offered
in the correspondence was based on our own extensive "lessons learned"
activities. These are lessons that we applied early on to adjust our
education and outreach efforts for the Drug Discount Card and that we
have clearly been applying with the Drug Benefit.
From a public service perspective, the most important question about
the Drug Discount Card is whether the program provided discounts and
access to prescription drugs for any beneficiary who wanted help. The
answer is yes, immediately. People with Medicare began using their
discount cards on June 1, 2004, and millions of prescriptions have been
filled, with only a tiny fraction of complaints or compliance issues.
Another significant and successful undertaking was providing to every
beneficiary free access to the cost of their drug comparatively across
all of our contracted sponsors beneficiaries could find out and compare
prices for every single covered drug, in every dosage available,
located at any contracted brick and mortar or mail order pharmacy. This
state-of-the-art approach put choice in the hands of people with
Medicare, and will be carried through for the Drug Benefit.
Independent surveys in the fall of 2004 found high levels of
satisfaction with the card enrollment process and with discounts
received with the card. The CMS was able to meet the challenge of
implementing effectively this program in a short timeframe and we
continue to improve the program based on our experience as we plan for
the Drug Benefit in 2006. Despite the short startup timeframe for the
Drug Card and Transitional Assistance program, CMS developed and
implemented an extensive education and outreach program targeting the
diverse Medicare beneficiary population. These efforts were complicated
by misinformed criticism of the program that unfairly conveyed that the
Drug Card did not provide significant assistance, even though study
after independent study show real and significant discounts below not
only list prices but prices people actually paid for drugs, including
those with third party discounts. For the Drug Benefit, it is important
that the media and others convey accurate information to ensure that
Medicare beneficiaries engage in education and outreach activities.
The GAO correspondence primarily focuses on particular negative
results, rather than the process of studies that CMS itself conducted
as part of its overall oversight activities rather than the process.
Therefore, the letter does not present the context of the larger
beneficiary education and outreach effort on the part of CMS, and thus
presents an incomplete picture. We suggest that GAO include a
comprehensive listing of our overall education and outreach activities,
including the many positive findings that came about as part of this
effort.
We appreciate your willingness to incorporate information about CMS
beneficiary education and outreach efforts into your final
correspondence, thereby giving readers and users of the report a more
complete picture and understanding of CMS implementation in these
areas.
Our specific and technical comments to the draft report are attached.
Attachment:
Centers for Medicare & Medicaid Services' Comments to the Government
Accountability Office's (GAO) Draft Correspondence Entitled: MEDICARE:
CAIS's Beneficiary Education and Outreach Efforts for the Medicare
Prescription Drug Discount Card and Transitional Assistance Program
(GAO-06-139R):
CMS specific comments related to GAO's draft report on MEDICARE: CMS's
Beneficiary Education and Outreach Efforts for the Medicare
Prescription Drug Discount Card and Transitional Assistance Program are
as follows:
RESULTS IN BRIEF:
The negative tone of the Results in Brief section is not supported by
the content of the body of the document which does point out the
success of educating the majority of beneficiaries about the temporary
drug card program in a relatively short timeframe, as well as some
successes of the multifaceted outreach campaign.
BACKGROUND:
The fact that CMS conducted assessments of its own program so soon
after implementation (e.g., February 2005) is a positive. CMS made
changes to its outreach campaign based on early self-assessments. We
believe that this should be highlighted in the correspondence.
CMS USED MULTIPLE EDUCATION AND OUTREACH EFFORTS: ASSESSMENTS OF THESE
EFFORTS IDENTIFIED WEAKNESSES:
Media Advertising and Direct Mail:
GAO Findings:
"In a legal analysis issued in March 2004, we found that CMS's print
advertisements contained a number of significant omissions. For
example, while all of the materials we reviewed mentioned the new drug
discount cards, none indicated that the cards may not be free and that
savings may vary among drugs."
CMS Response:
The focus of the print ads before March 2004 was to introduce the
overall benefits of the Medicare Prescription Improvement and
Modernization Act of 2003 (MMA), including preventive benefits, the
drug discount cards, and new drug coverage. These ads were intended to
help people understand that Medicare was not changing but that it was
adding new benefits. They were not designed to provide specific details
on any of the benefits highlighted in the print ad. However, our print
ads designed to introduce the drug discount cards in spring 2004 did,
in fact, include details such as "savings may vary" and "enrollment
fee, deductibles and co-pay may apply."
GAO Findings:
"The assessments we reviewed also found limitations in the use of
direct mail to help increase enrollment in health care initiatives. In
particular, studies have shown that direct mailings may not be an
effective outreach tool for Medicare beneficiaries with low incomes. In
its report, MedPAC found that low literacy rates, poor English
proficiency, and unfamiliarity with health care programs limit low-
income beneficiaries' ability to comprehend and act on direct mail
instructions."
CMS Response:
The CMS believed that using the direct mail approach was a good way to
ensure this population received the information it needed. Other
outreach channels (www.medicare.gov and 1-800-MEDICARE) would have
required a person to take an action to obtain the necessary
information.
All of our Medicare-approved drug discount card materials were consumer-
tested with samples of the Medicare population to make sure the
materials were as understandable as possible. Some of the sub-
populations included in testing were beneficiaries with low literacy,
beneficiaries with poor English proficiency, and low-income
beneficiaries. The Medicare-approved drug discount card materials were
also available in Spanish on www.medicare.gov and by calling 1-800-
MEDICARE.
Medicare Web Site:
While GAO points out that few beneficiaries are intemet-proficient and,
therefore, the Web site tool was of limited benefit to them, it should
be mentioned that the same information was available through 1-800-
MEDICARE, which received a record number of calls during early months
of the drug card outreach. During the education and outreach effort,
many updates to the Web site were made to incorporate comments and make
improvements to the Web site. It should also be noted that the Web site
was a primary tool used by many of the community organisations and
other outreach partners to provide beneficiaries with consistent and
accurate information. This had a significant impact on the quality of
information used by beneficiaries to make decisions and enroll in the
Drug Card Program.
GAO Findings:
"According to CRS, because CMS posted the maximum price cited by
organizations in their applications to become selected as drug card
sponsors, some priced displayed on Prescription Drug Assistance
Programs (PDAP) were too high."
CMS Response:
Sponsors did not submit pricing information with their applications.
The sponsors began submitting the pricing data for PDAP to CMS after
they were awarded contracts to become approved card sponsors. The
pricing data was updated weekly with the updated data files submitted
by the sponsors.
The CMS chose to default to the highest price on the site with the
logic that we had no means to know what package type would be used when
the pharmacy dispensed the prescription. The highest price displayed on
PDAP was valid for the highest priced drug/dose/package submitted by
each sponsor; thus the beneficiary would not pay a price higher than
what was posted on the Web site (in many instances, they would pay
less).
Medicare Telephone Help Line:
GAO Finding:
"In December 2004, we reported that CSRs had substantial inaccuracy
rates when answering questions about the drug discount card and
transitional assistance".
CMS Response:
We have already addressed the GAO findings regarding the inaccurate
answers 14 percent and the issues regarding $600.00 credit:
* CMS conducts 1,000 customer satisfaction surveys each month at 1-800-
MEDICARE. Consistently, more than 90 percent of the callers report they
are satisfied with the services and information they receive. Since
satisfaction is just one measure for evaluating the service at 1-800-
MEDICARE, CMS also requires its contractors to thoroughly assess the
accuracy and responsiveness of the information provided by Customer
Service Representatives CSRs. The scores CSRs receive are consistently
high, with accuracy rates of around 90 percent.
GAO listed 55 of the 70 calls as inaccurate. We believe that all of the
findings associated with question 2 need to be disregarded and removed
from the study. There are several problems with the GAO findings
associated with question 2.
* First, GAO determined that a correct answer would be that the
caller's mother would qualify for the $600 credit. GAO gave 3 sources
of income
--$765 social security, $250 rental income, and $70 monthly payout from
husband's life insurance policy. GAO indicated that the CSRs should
have disregarded the $70 life insurance income, thus qualifying the
mother for the $600 credit. However, GAO neglected to consider that
$66.60 monthly Medicare Part B premium needed to be added back into the
Social Security income, thus putting the mother over the $1,048 monthly
income limit for $600 without considering the $70 life insurance
income. GAO considered the responses inaccurate even when their own
notes indicated that the CSR was adding back in the Medicare Part B
premium.
* Second, at the GAO exit conference with CMS, the GAO auditors clearly
stated that they used 3 sources of income in their calls - social
security, rental, and annuity policy income. Per CMS policy, all 3 of
these income sources would be counted towards eligibility for the $600
credit. Later, the GAO indicated that the information provided at the
exit conference was incorrect and that the auditors did not refer to
the 3`° income source as "annuity income" in the actual calls. We had
hoped that some of the calls may have been captured by our quality
assurance software so that we could verify whether GAO auditors perhaps
inadvertently switched between referring to the income source as "life
insurance" and "annuity". However, GAO did not provide sufficient
information on these calls that would have enabled us to trace them.
* We continue to have issues about question 2 that related to income
used to determine eligibility for the $600 credit. We believe that this
clearly illustrates the complexity of the income calculations used to
determine eligibility for low income assistance programs. In
recognition of the complexity involved in making accurate income
determinations, the I-800-MEDICARE CSRs will not be making the income
eligibility determinations for the drug benefit subsidy. Instead, the 1-
800- MEDICARE CSRs will ask the resource screening question and refer
callers who meet the resource standard to Social Security Claims
Representatives for the actual income eligibility determination. (Note
that Social Security will not use their 1-800 Teleservice
Representatives to respond to these calls but rather the more highly
trained Claims Representatives.) The Social Security Administration has
the responsibility for the drug benefit subsidy and the Social Security
Claims Representatives have considerable expertise in making these
types of income detenninations.
GAO Finding:
"Also, according to KFF, CSRs can answer inquiries in both Spanish and
English but there is limited or no capability to communicate with
beneficiaries in other languages."
CMS Response:
The 1-800-MEDICARE helpline is staffed with English and Spanish
speaking CSRs. In addition, we are also able to communicate with TTY
users. The 1-800-MEDICARE helpline can support a variety of different
languages through the use of a translation line. The use of translation
lines is standard in the call center industry. A very small percent of
the overall 1-800-MEDICARE call volume requires support for a language
other than English or Spanish. English calls typically represent well
over 96 percent of the call volume while Spanish calls represent 3
percent. The remainder of the calls are TTY calls, followed by other
language calls.
In addition, CMS has continued to expand partnerships with local
organizations to reach beneficiaries through trusted community groups
that speak their language. In this way, we intend to increase our
capacity to conduct culturally-appropriate outreach and education
activities in multiple languages.
Partnerships with Local Organizations:
An unprecedented public-private outreach effort was coordinated with
CMS and Administration on Aging (AoA) to organize, train, and fund
community-based organizations (CBOs) through national, State and local
coalitions in order to ensure that the maximum number of low-income
Medicare beneficiaries learned about Medicare-approved discount drug
cards and how to enroll in the program. In addition to the private
groups cited in this document (AARP, Access to Benefits Coalition, and
the Medicare Today Coalition):
* A $300,000 interagency agreement was arranged with the United States
Department of Agriculture to reach rural underserved audiences about
MMA and the drug discount card through USDA county extension service
educators.
* A $200,000 interagency agreement were signed with the Indian Health
Service to extend education and awareness about the drug discount card
benefit to tribal staff and members.
$250,000 in grants was awarded to minority organizations through the
AoA. These grant awards extended previous working arrangements AoA has
with groups representing the African American, Hispanic American, and
Asian American/Pacific Islander communities.
A cooperative agreement for $125,000 was signed with the National
Governor's Association, Center for Best Practices, to support their
study of "Making the Medicare Modernization Act Work in States."
Results from this study will be shared through a $125,000 amendment to
this cooperative agreement that includes outreach activity that will be
accomplished in concert with the Council of State Governments.
Despite shortened timeframes to select community-based organizations
through a competitive contractual process, provide training on the drug
discount card and transitional assistance programs, and gain the
attention on this issue, CMS was successful in reaching the majority of
those beneficiaries who would benefit the most. This assistance in
paying for prescription drugs was particularly beneficial to the 4.5
million low-income Medicare beneficiaries who would qualify for
discounts on their drug purchases and $1,200 in transitional help in
paying for those medications. The contractual arrangement through
Ogilvy PR Worldwide focused a national effort to promote awareness and
enrollment in these programs with the hardest-to-reach of the low-
income audience - those Medicare beneficiaries who are barred from the
mainstream media by factors such as culture, language, literacy,
location, and income. The charge was to coordinate with the AoA in
organizing and funding CBOs through national, State, and local
coalitions to ensure that the maximum number of low-income Medicare
beneficiaries learned about the drug discount card and transitional
assistance and how to enroll in the programs.
The crunch of time necessitated that much of this support be provided
concurrent with the CBOs initiating their community outreach
activities. Upfront training was provided to organizational leaders,
with a dependency on the train-the-trainer approach to extend this
training to all staff and volunteers. This was part of the contractual
arrangement. CBOs varied in their ability to extend this initial
training to all members of their organization, but were supported in
their effort with the availability of additional online training and
resources to answer difficult questions via postings on the
www.medicare.gov. Web site and queries to 1-800-MEDICARE CSRs.
The CMS materials were pushed to community-based organizations as part
of an expedited start-up of outreach efforts, with drop shipments of
selected publications made to all CBOs upon initiation of a contractual
relationship. Ongoing communication and education support was provided
to CBOs via regular e-mails, telephone access to regional coordinators,
and a monthly newsletter. CMS staffers at the Regional Offices also
were available for troubleshooting.
Outreach to disabled beneficiaries was limited by the ability of the
individual CBOs, but was compensated for through support of partners
engaged through the Access to Benefits Coalition, Medicare Today, and
other national advocacy forums.
BENEFICIARY CONFUSION AND PROGRAM DESIGN ISSUES MAY HAVE LIMITED
ENROLLMENT:
Many design features were not CMS choice but were statutory. There is
no discussion in the correspondence of beneficiaries not enrolling
because they were low users, that is, regularly took few or no
prescription drugs. Given that the card is a discount program, not an
insurance program, low users had limited incentives to enroll.
Therefore, lack of enrollment on their part constitutes lack of need,
not low participation.
(290459):
FOOTNOTES
[1] Throughout this report we refer to the Medicare Prescription Drug
Discount Card and Transitional Assistance program as the drug card
program.
[2] Pub. L. No. 108-173, sec. 101(a), § 1860D-31, 117 Stat. 2066, 2131-
-48 (to be codified as 42 U.S.C. § 1395w-141).
[3] Other GAO products related to this topic include Medicare: CMS's
Implementation and Oversight of the Medicare Prescription Drug Discount
Card and Transitional Assistance Program, GAO-06-78R (Washington, D.C.:
Oct. 28, 2005), and a review of sponsors' processes related to the drug
card program (forthcoming).
[4] Drug card sponsors are required to offer a discount for at least
one drug in each of the 209 therapeutic categories identified by CMS on
a list of frequently used medications, and are precluded from offering
discounts for nine classes of drugs. 42 C.F.R. § 403.806(d)(2) (2004).
The formularies, or sets of preferred drugs, that are covered by the
discounts, may not include all of a beneficiary's drugs. Beneficiaries
who use drugs not included in the formulary will not be able to obtain
discounts for those drugs. However, if a beneficiary is approved for
transitional assistance, payment may be made for a drug, even if it is
not on the formulary.
[5] Among the qualifications to offer drug cards, sponsors--pharmacy
benefit managers, heath insurers, and others--had to secure a large
network of retail pharmacies. CMS established separate access
requirements for urban, suburban, and rural areas. For example, in
urban areas, at least 90 percent of a card's enrollees must live within
2 miles of a network pharmacy.
[6] To qualify for transitional assistance, a beneficiary must (1) have
an income at or below $12,569 per year for an individual, or $16,862
for a couple in 2004 and (2) not have other prescription drug coverage
through Medicaid, employer-sponsored group health insurance programs,
an individual health insurance policy, TRICARE (health care program for
active duty and retired uniformed services members and their families),
or the Federal Employee's Health Benefits Program. MMA 117 Stat. 2133.
[7] MMA 117 Stat. 2140-42. Qualified individuals were entitled to
receive the full $600 credit amount in 2004 regardless of when they
enrolled. If they enrolled in 2005, the credit was prorated based on
the quarter in which they enrolled. Any 2004 credit balance was rolled
over into 2005; and any 2005 credit balance will be rolled over into
2006 until the individual enrolls in a Medicare prescription drug plan
or the initial part D enrollment period closes on May 15, 2006,
whichever comes first.
[8] Once an applicant is determined eligible to receive transitional
assistance, CMS transfers funds from the Medicare part B Trust Fund
directly to the approved discount card sponsor with which the eligible
beneficiary has enrolled. The discount card sponsor is responsible for
applying each eligible enrollee's $600 subsidy to the beneficiary's
cost of prescription drugs covered under the program.
[9] Although many Medicare managed care plans already offer drug
coverage, not all do so and most offer limited coverage. The discount
card would be used in situations of no coverage or limited coverage
under the plans. If the Medicare managed care plan offers a drug card,
its members may only get that drug card. If a Medicare managed care
plan does not offer a drug card, its members may sign up for any card
available in their area.
[10] Because people enrolled in state pharmacy assistance programs
receive comprehensive help with their drug expenditures, their coverage
may not change under a drug card program. However, with such
enrollment, federal dollars substitute for state dollars, thus reducing
the cost of those state pharmacy assistance programs.
[11] In 2002, 18 percent of noninstitutionalized Medicare beneficiaries
lacked drug coverage for the full year. Others obtained drug coverage
from a variety of sources, including employer-sponsored plans (34
percent), Medicaid (14 percent), Medicare managed care plans (12
percent), Medigap policies (12 percent), and other public programs (10
percent).
[12] Centers for Medicare & Medicaid Services, Medicare-Approved Drug
Discount Card and $600 Credit Program: CMS and Drug Card Sponsor
Lessons Learned, Final Results and Analysis (Baltimore, Md.: February
2005).
[13] Kaiser Family Foundation/Harvard School of Public Health, Views of
the New Medicare Drug Law: A Survey of People on Medicare, publication
no. 7144 (Washington D.C.: August 2004).
[14] Kaiser Family Foundation, November/December 2004 Health Poll
Report Survey, publication no.7247 (Washington, D.C.: January 2005).
[15] Abt Associates, Evaluation of the Medicare-Approved Prescription
Drug Discount Card and Transitional Assistance Program: Interim
Evaluation Report, Final Report (Cambridge, Mass.: October 11, 2005).
[16] GAO, Medicare Prescription Drug, Improvement, and Modernization
Act of 2003--Use of Appropriated Funds for Flyer and Print and
Television Advertisements, B-302504 (Washington, D.C.: March 10, 2004).
[17] Medicare Payment Advisory Commission, Report to the Congress:
Issues in a Modernized Medicare Program (Washington, D.C.: June 2005).
[18] GAO, Medicare Savings Programs: Results of Social Security
Administration's 2002 Outreach to Low-Income Beneficiaries, GAO-04-363
(Washington, D.C.: March 26, 2004).
[19] Kaiser Family Foundation/Harvard School of Public Health, Views of
the New Medicare Drug Law: A Survey of People on Medicare, Additional
Findings by Income Group, publication no. 7169 (Washington, D.C.:
September 2004).
[20] According to the CMS Administrator, PDAP includes information on
approximately 60,000 drug products and 75,000 pharmacies. The component
of the Web site with information about drug prices was deactivated on
September 30, 2005.
[21] For example, see Congressional Research Services, Beneficiary
Information and Decision Supports for the Medicare-Endorsed
Prescription Drug Discount Card, RL32828 (Washington, D.C.: Mar. 24,
2005).
[22] GAO-06-78R.
[23] Medicare Payment Advisory Commission, Public Meeting: State
Lessons on the Drug Card (Washington, D.C.: Sept. 10, 2004).
[24] Kaiser Family Foundation, E--Health and the Elderly: How Seniors
Use the Internet for Health Information (January 2005).
[25] According to MedPAC, beneficiaries who are computer literate and
have Internet connections in their homes are unlikely to have the high-
speed connections necessary to use PDAP.
[26] GAO, Medicare: Accuracy of Responses from the 1-800-MEDICARE Help
Line Should Be Improved, GAO-05-130 (Washington, D.C.: Dec. 8, 2004).
[27] See, for example, Kaiser Family Foundation, Medicare Drug Discount
Cards: A Work in Progress, prepared by Health Policy Alternatives, Inc.
(Washington, D.C.: July 2004).
[28] Medicare Rights Center, Medicare-Approved Drug Discount Cards: A
Prescription for Improvement (New York, N.Y.: May 2004).
[29] Ogilvy Public Relations, Development of Community-Based Coalitions
to Support Drug Card Awareness, Final report on CMS Contract Number 500-
01-0003, Task Order 0011 (May 31, 2005).
[30] There are four MSPs, each with differing income eligibility
requirements and levels of benefits--the Qualified Medicare
Beneficiary, Specified Low-Income Medicare Beneficiary, Qualifying
Individual, and Qualified Disabled and Working Individual programs. To
enroll, eligible beneficiaries must have incomes and assets within the
specific program's federal ceilings and enroll through their state
Medicaid program.
[31] Some of the original 1.1 million MSP beneficiaries that CMS
autoenrolled in a general card in fall 2004 subsequently enrolled in a
different drug discount card, canceled their assigned card, or died. As
of September 1, 2005, this MSP group had declined to about 874,000
enrollees.
[32] CMS, Medicare Program: Medicare Prescription Drug Discount Card;
Interim Rule and Notice, 42 C.F.R. Parts 403 and 408, Federal
Register/Vol. 68, No. 240/Monday, December 15, 2003.
[33] Congressional Budget Office, A Detailed Description of CBO's Cost
Estimate for the Medicare Prescription Drug Benefit (Washington D.C.:
July 2004).
[34] Kaiser Family Foundation, Medicare at a Glance, publication no.
1066-08 (Washington, D.C.: April 2005).
[35] Beneficiaries without drug coverage may have discount cards
offered by retailers or associations. For example, as reported by AEI,
for a $20 annual enrollment fee, AARP's MembeRx Choice provides average
discounts of nearly 20 percent off retail prices. Beneficiaries in such
programs may have assumed that they do not need a Medicare-endorsed
drug card because they already have a private card under a similar
corporate name. See: American Enterprise Institute, Private Discounts,
Public Subsidies: How the Medicare Prescription Drug Discount Card
Really Works (Washington, D.C.: June 2004).
[36] Health Affairs Web Exclusive, Prescription Drug Coverage and
Seniors: Findings From A 2003 National Survey (April 19, 2005).
