Medicare Part D
Prescription Drug Plan Sponsor Call Center Responses Were Prompt, but Not Consistently Accurate and Complete Gao ID: GAO-06-710 June 30, 2006The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) established a voluntary outpatient prescription drug benefit, known as Medicare Part D. Private sponsors have contracted with the Centers for Medicare & Medicaid Services (CMS) to provide this benefit and are offering over 1,400 stand-alone prescription drug plans (PDP). Depending on where they live, beneficiaries typically have a choice of 40 to 50 PDPs, which vary in cost and coverage. MMA required each PDP sponsor to staff a toll-free call center, which serves as a key source of the information that beneficiaries need to make informed choices among PDPs. GAO examined (1) whether PDP sponsors provide prompt, courteous, and helpful service to Medicare beneficiaries and others and (2) the extent to which PDP sponsor call centers provide accurate and complete information to Medicare beneficiaries and other callers. To address these objectives, we made 900 calls to 10 of the largest PDP sponsor call centers during March 2006, posing one of five questions about their Part D plans during each call. We tracked the amount of time it took to reach a customer service representative (CSR), the number of calls that did not reach a CSR, and the appropriateness and clarity of CSRs' language. We developed criteria for determining accurate and complete responses based on CMS information.
Call center service was generally prompt and courteous, and many CSRs offered helpful suggestions and information. GAO reached a representative in less than 1 minute for 46 percent of the calls CSRs fielded and in less than 5 minutes for 96 percent of the calls fielded. While GAO did not reach CSRs for 4 percent of the calls it placed, mainly because of disconnections, GAO found that 98 percent of CSRs with whom GAO spoke were easy to understand, polite, and professional. In addition, many CSRs provided helpful suggestions related to GAO's questions, such as details about a mail-order option to obtain drugs or lower-cost drugs. However, CSRs at 10 of the largest PDP sponsor call centers did not consistently provide accurate and complete responses to GAO's five questions, which GAO developed using information from CMS and other sources. GAO obtained accurate and complete responses to about one-third of the 864 calls for which GAO reached a CSR. The overall accuracy and completeness rate for each call center ranged from 20 to 60 percent. CSRs were unable to answer 15 percent of the questions posed, primarily those related to plan costs. Furthermore, CSRs within the same call center sometimes provided inconsistent answers. For example, in response to questions about PDP cost comparisons for specified sets of drugs, CSRs at 3 call centers told GAO that it was against the sponsors' policies to identify any of their plans as lowest cost. However, other CSRs at each of these call centers did not cite this policy and did identify a plan as lowest cost. In commenting on a draft of this report, CMS criticized the analysis as based on inaccurate, incomplete, and subjective methods that limit the report's relevance and validity. GAO maintains that its methods are sound and its findings are accurate. CMS officials told GAO at a May 2006 meeting that CSRs should have been able to accurately answer the questions GAO posed.
GAO-06-710, Medicare Part D: Prescription Drug Plan Sponsor Call Center Responses Were Prompt, but Not Consistently Accurate and Complete
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Report to Congressional Requesters:
United States Government Accountability Office:
GAO:
June 2006:
Medicare Part D:
Prescription Drug Plan Sponsor Call Center Responses Were Prompt, but
Not Consistently Accurate and Complete:
Medicare Prescription Drug Plan Sponsor Call Centers:
GAO-06-710:
GAO Highlights:
Highlights of GAO-06-710, a report to congressional requesters.
Why GAO Did This Study:
The Medicare Prescription Drug, Improvement, and Modernization Act of
2003 (MMA) established a voluntary outpatient prescription drug
benefit, known as Medicare Part D. Private sponsors have contracted
with the Centers for Medicare & Medicaid Services (CMS) to provide this
benefit and are offering over 1,400 stand-alone prescription drug plans
(PDP). Depending on where they live, beneficiaries typically have a
choice of 40 to 50 PDPs, which vary in cost and coverage. MMA required
each PDP sponsor to staff a toll-free call center, which serves as a
key source of the information that beneficiaries need to make informed
choices among PDPs. GAO examined (1) whether PDP sponsors provide
prompt, courteous, and helpful service to Medicare beneficiaries and
others and (2) the extent to which PDP sponsor call centers provide
accurate and complete information to Medicare beneficiaries and other
callers.
To address these objectives, we made 900 calls to 10 of the largest PDP
sponsor call centers during March 2006, posing one of five questions
about their Part D plans during each call. We tracked the amount of
time it took to reach a customer service representative (CSR), the
number of calls that did not reach a CSR, and the appropriateness and
clarity of CSRs‘ language. We developed criteria for determining
accurate and complete responses based on CMS information.
What GAO Found:
Call center service was generally prompt and courteous, and many CSRs
offered helpful suggestions and information. GAO reached a
representative in less than 1 minute for 46 percent of the calls CSRs
fielded and in less than 5 minutes for 96 percent of the calls fielded.
While GAO did not reach CSRs for 4 percent of the calls it placed,
mainly because of disconnections, GAO found that 98 percent of CSRs
with whom GAO spoke were easy to understand, polite, and professional.
In addition, many CSRs provided helpful suggestions related to GAO‘s
questions, such as details about a mail-order option to obtain drugs or
lower-cost drugs.
However, CSRs at 10 of the largest PDP sponsor call centers did not
consistently provide accurate and complete responses to GAO‘s five
questions, which GAO developed using information from CMS and other
sources. GAO obtained accurate and complete responses to about one-
third of the 864 calls for which GAO reached a CSR. The overall
accuracy and completeness rate for each call center ranged from 20 to
60 percent. CSRs were unable to answer 15 percent of the questions
posed, primarily those related to plan costs. Furthermore, CSRs within
the same call center sometimes provided inconsistent answers. For
example, in response to questions about PDP cost comparisons for
specified sets of drugs, CSRs at 3 call centers told GAO that it was
against the sponsors‘ policies to identify any of their plans as lowest
cost. However, other CSRs at each of these call centers did not cite
this policy and did identify a plan as lowest cost.
Figure: Percentage of 864 Calls With Accurate and Complete, Incomplete,
or Inaccurate Responses, and Those Where No Answer Was Provided, March
2006:
[See PDF for Image]
Source: GAO.
[End of Figure]
In commenting on a draft of this report, CMS criticized the analysis as
based on inaccurate, incomplete, and subjective methods that limit the
report‘s relevance and validity. GAO maintains that its methods are
sound and its findings are accurate. CMS officials told GAO at a May
2006 meeting that CSRs should have been able to accurately answer the
questions GAO posed.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-710].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Leslie G. Aronovitz at
(312) 220-7600.
[End of Section]
Contents:
Letter:
Results in Brief:
Background:
CSRs Generally Provided Prompt, Courteous, and Helpful Service:
PDP Sponsor Call Centers Did Not Consistently Provide Callers with
Accurate and Complete Information:
Concluding Observations:
Agency Comments and Our Evaluation:
Appendix I: Comments from the Centers for Medicare & Medicaid Services:
Appendix II: GAO Contact and Staff Acknowledgments:
Table:
Table 1: Questions, Scenarios, and Criteria Used to Assess Response
Accuracy and Completeness:
Figures:
Figure 1: Percentage of Calls by Wait Time to Reach a CSR, and
Percentage of Calls Where We Did Not Reach a CSR, March 2006:
Figure 2: Percentage of Calls with Accurate and Complete, Incomplete,
or Inaccurate Responses, and Those Where No Answer Was Provided, March
2006:
Figure 3: Lowest, Highest, and Average Sponsor Call Center Accuracy and
Completeness Rate, by Question, March 2006:
Figure 4: Percentage of Calls with Accurate and Complete, Incomplete,
or Inaccurate Responses, and Those Where No Answer Was Provided, by
Question, March 2006:
Abbreviations:
CMS: Centers for Medicare & Medicaid Services:
CSR: customer service representative:
MMA: Medicare Prescription Drug, Improvement, and Modernization Act of
2003:
PDP: prescription drug plan:
United States Government Accountability Office:
Washington, DC 20548:
June 30, 2006:
Congressional Requesters:
The Medicare Prescription Drug, Improvement, and Modernization Act of
2003 (MMA) established a voluntary outpatient prescription drug
benefit, known as Medicare Part D, beginning January 1, 2006.[Footnote
1] Seventy-nine sponsors, largely commercial insurers, have contracted
with the Centers for Medicare & Medicaid Services (CMS)--the agency
that administers Medicare--to provide this benefit in 2006. These
sponsors offer over 1,400 stand-alone Medicare prescription drug plans
(PDPs) in one or more of 34 CMS-designated PDP regions.[Footnote 2]
Depending on where they live, Medicare beneficiaries typically have a
choice of 40 to 50 PDPs, which vary in cost and coverage. Generally,
beneficiaries had until May 15, 2006, to enroll in Part D without the
risk of a penalty in the form of higher premiums; as of June 11, 2006,
about 16.4 million beneficiaries had enrolled in stand-alone PDPs.
MMA requires each PDP sponsor to staff a toll-free call center. These
call centers serve as key sources of the information that beneficiaries
need to make informed choices among competing drug plans. Beneficiaries
and others assisting them may contact call centers to obtain general
information on Part D, ask detailed questions or verify information
from other sources about a sponsor's PDPs, or enroll in a PDP.[Footnote
3] Because beneficiaries have an opportunity to switch to another PDP
during an annual open-enrollment period, sponsor call centers will
continue to play a significant role in informing current and
prospective enrollees.[Footnote 4]
You were interested in the quality of the service and information
provided to beneficiaries by PDP sponsor call centers, as inaccurate or
misleading benefit information could lead beneficiaries to choose a PDP
that does not meet their needs. In this report, we examined (1) whether
PDP sponsors provide prompt, courteous, and helpful service to Medicare
beneficiaries and others accessing their toll-free call centers, and
(2) the extent to which PDP sponsors provide accurate and complete
information to Medicare beneficiaries and other callers.
To address these objectives, we made 900 calls to 10 of the largest PDP
sponsor call centers, all of which operate in 30 or more PDP regions
and offer two or three PDPs per region.[Footnote 5] As of April 27,
2006, each of these sponsors served at least 100,000 beneficiaries.
Each of our 10 sponsors has one toll-free call center, which we
contacted from March 2 through March 31, 2006. We posed one of five
questions about their Part D plans during each call, asking each
question a total of 180 times--18 times to each of the 10 PDP
sponsors.[Footnote 6] We developed scenarios with zip codes and
fictional relatives for each of the questions. To make them sound
realistic and provide needed information, we specified additional
details, such as drug dosage and frequency information, lack of current
drug coverage, low-income subsidy eligibility, and preference for
retail purchasing, if asked.[Footnote 7]
In developing our five questions, we examined those addressed by the
Frequently Asked Questions section of CMS's Medicare.gov Web site. We
also reviewed materials from policy analysts that identified
information critical to making a choice among competing plans.[Footnote
8] In addition, we spoke with representatives of beneficiary advocacy
groups about the types of information beneficiaries need to consider
when selecting a PDP plan. Finally, we asked CMS officials what types
of information they required or expected call center customer service
representatives (CSR) to be able to provide the public and developed
our questions from this information. Although CMS does not have
requirements regarding the specific types of information CSRs must be
able to provide, agency officials told us that CSRs should be able to
accurately answer questions about the relative costs of a sponsor's
PDPs, the availability of a plan for beneficiaries eligible for
Medicare's low-income subsidy, actions that beneficiaries could take if
their drugs are not covered by the plan, and types of restrictions
plans use to manage their formularies.
To evaluate the extent to which sponsor call centers provided prompt,
courteous, and helpful service during our calls, we analyzed
information on the amount of time it took to reach a CSR and the number
of calls for which we could not reach a CSR. In addition, our callers
noted if they had concerns about the appropriateness and clarity of
CSRs' language. In such cases, we evaluated whether the CSR was
difficult to understand, impolite, or unprofessional. We also noted any
helpful suggestions or information provided to the caller.
We developed criteria for accurate and complete responses for each
question from information provided on CMS's Web-based PDP finder tool
on Medicare.gov[Footnote 9] and information that CMS has approved for
use by its 1-800-MEDICARE CSRs (see table 1). Excluding calls for which
we did not reach a CSR, we report results on the accuracy and
completeness of information obtained during the remaining
calls.[Footnote 10] We considered an answer accurate and complete if
the CSR's response met all of our criteria and we considered an answer
incomplete if the CSR's response met one, but not both of our criteria.
We considered an answer inaccurate if the CSR's response did not meet
any of our criteria. If the CSR stated that they did not know or could
not provide an answer, we classified the call as "no answer provided."
Table 1: Questions, Scenarios, and Criteria Used to Assess Response
Accuracy and Completeness:
Question: 1. PDP comparison for a low-utilization beneficiary[A];
Scenario: My mother takes the following drugs: Norvasc, Fosamax, and
warfarin sodium. Which of the sponsor's plans would cost her the least
amount annually and what is its annual cost?;
Criteria for an accurate and complete response: The name and annual
cost (within 5 percent) of the sponsor's PDP that would cost the
beneficiary the least annually for the three drugs she uses.
Question: 2. PDP comparison for a high-utilization beneficiary[A];
Scenario: My mother-in-law takes the following drugs: Aciphex, Benicar,
Evista, Levoxyl, Pravachol, Synthroid, Zetia, and Zoloft.[B] Which of
the sponsor's plans would cost her the least amount annually and what
is its annual cost?;
Criteria for an accurate and complete response: The name and annual
cost (within 5 percent) of the sponsor's PDP that would cost the
beneficiary the least annually for the eight drugs she uses.
Question: 3. Low-income subsidy;
Scenario: My mother automatically qualifies for extra help because
Medicaid[C] pays part of her Medicare premiums. Does the sponsor offer
a plan that she can join without having to pay a premium?;
Criteria for an accurate and complete response: The name of the
sponsor's PDP, if any, for which the beneficiary would not pay a
premium.
Question: 4. Nonformulary drugs;
Scenario: If some of my grandfather's drugs are not covered, will he
have to pay full price for them, or are there other things he can do?;
Criteria for an accurate and complete response: A beneficiary may (1)
switch to a covered drug, and (2) ask for an exception to the
formulary.
Question: 5. Utilization management tools;
Scenario: If some of my grandfather's drugs are covered, but subject to
restrictions, what does that mean?;
Criteria for an accurate and complete response: Descriptions of at
least two of the following: for some covered drugs (1) beneficiaries
need approval from their PDP before they can fill their prescription;
(2) the PDP limits the amount of the drug that it covers over a certain
period of time; (3) the PDP requires that the beneficiary first try a
less expensive drug for their condition before it will cover the
beneficiary's prescribed drug; or (4) when there is a generic
substitute available, the PDP will automatically provide the generic,
unless the beneficiary's doctor specifically orders the brand- name
drug.
Source: GAO.
Note: We considered an answer accurate and complete if the CSR's
response met all of our criteria. We considered an answer incomplete if
the CSR's response met one, but not both, of our criteria.
Specifically, for questions 1 and 2, a response was incomplete if the
CSR accurately named the lowest annual cost plan, but either
inaccurately calculated or could not provide the annual cost. An
incomplete answer was not possible for question 3, as it had only one
criterion for accuracy and completeness. A question 4 response was
incomplete if the CSR either stated that the beneficiary could switch
to a covered drug or that they could ask for an exception, but did not
state both these possibilities. Finally, a question 5 response was
incomplete if the CSR accurately described only one utilization
management tool. We considered an answer inaccurate if the CSR's
response did not meet any of our criteria. If the CSR stated that they
did not know or could not provide an answer, we classified the call as
"no answer provided."
[A] In 2003, 46 percent of all seniors reported taking five or more
prescription drugs. Based on this survey finding, we specified three
drugs for the low-utilization beneficiary and eight drugs for the high-
utilization beneficiary. See Health Affairs--Web Exclusive:
Prescription Drug Coverage And Seniors: Findings From A 2003 National
Survey, April 19, 2005.
[B] This scenario is based on a list of medications provided to us by a
Medicare beneficiary. We recognize that Levoxyl and Synthroid are the
same chemically, but retained both drugs in this scenario to make the
calls as realistic as possible. Specifying that a beneficiary is taking
both of these drugs did not preclude the ability of CSRs to determine
the least costly plan and its annual cost.
[C] Medicaid provides health care coverage to eligible low-income
people and is jointly financed by the federal government and the
states.
[End of table]
The results from our 900 calls are limited only to those calls and are
not generalizable to the population of calls routinely made to sponsor
call centers by beneficiaries and other callers. Although the five
questions we posed are among the most critical questions regarding PDP
comparison, they do not encompass all of the questions callers might
ask. We did not contact PDP sponsors other than posing questions to the
call centers. In addition, we did not examine other issues related to
the performance of call centers, such as CSR qualifications and
training, nor did we evaluate CMS oversight of sponsor call centers. We
conducted our work from February 2006 through June 2006 in accordance
with generally accepted government auditing standards.
Results in Brief:
Call center service was generally prompt and courteous, and many CSRs
offered helpful suggestions and information. We reached a
representative in less than 1 minute for 46 percent of the calls CSRs
fielded, and in less than 5 minutes for 96 percent of the calls
fielded. While we did not reach CSRs for 36 calls--4 percent of the 900
calls we placed--mainly due to disconnections, we found that 98 percent
of the CSRs with whom we spoke were easy to understand, polite, and
professional. Many CSRs also provided helpful suggestions related to
our questions. For example, for our question on the PDP comparison for
a high-utilization beneficiary, CSRs provided the caller with
information about lower-cost drugs in 41 percent of the calls.
CSRs at 10 of the largest PDP sponsor call centers did not consistently
provide accurate and complete responses to our five questions.
Excluding the calls for which GAO did not reach a CSR, GAO obtained
accurate and complete responses to about one-third of our 864 calls.
The overall accuracy and completeness rates for the 10 PDP sponsor call
centers varied widely, ranging from 20 to 60 percent. Only 1 sponsor
call center had an overall accuracy and completeness rate of greater
than 50 percent and 2 sponsor call centers had rates of 25 percent or
less. CSRs were unable to provide an answer for 15 percent of our
questions, primarily those related to plan costs. Furthermore, CSRs
within the same call center sometimes provided inconsistent answers.
For example, in response to questions regarding PDP comparisons, CSRs
at 3 call centers told us that it was against the sponsor's policies to
identify any of their plans as having the lowest annual cost. However,
other CSRs at each of these call centers did not cite this policy and
did identify a plan as having the lowest annual cost.
In written comments on a draft of this report, CMS stated that our
analysis was based on inaccurate, incomplete, and subjective methods
that limited our report's relevance and validity. We maintain that our
methods are sound and that our findings are accurate. In conducting
this review, we identified topics that CMS, policy analysts, and
beneficiary advocacy groups indicated were key to making an informed
plan choice, posed questions as we expected beneficiaries' family
members to do, and relied on information from CMS to develop criteria
to assess the accuracy and completeness of the responses we received.
Further, CMS officials told us at a May 2006 meeting that CSRs should
have been able to accurately answer the questions we posed. Our
findings indicate that beneficiaries may have difficulty getting
appropriate information from PDP sponsors' call centers. CMS also
stated in its written comments that we were right to be concerned about
whether beneficiaries are getting effective services from plan call
centers.
Background:
Medicare Part D coverage is provided through private sponsors that
offer a choice of PDPs with different costs and coverage. The largest
sponsors offer PDPs to beneficiaries throughout the United States and
generally have experience in providing Medicare coverage and with call
center operations.
Key Features of Medicare Part D:
Under Part D, each PDP may offer the standard prescription drug benefit
or coverage that is different, but at least actuarially equivalent, to
the standard benefit.[Footnote 11] According to the Medicare Payment
Advisory Commission, for 2006, 9 percent of PDPs offer the standard
benefit, 48 percent offer a basic plan that has the same actuarial
value as the standard benefit but with a different design, and 43
percent offer enhanced coverage that exceeds the standard
benefit.[Footnote 12] Therefore, the specific premium, deductible, and
copayment or coinsurance amounts, as well as the coverage gap--the
period during which beneficiaries must pay 100 percent of their drug
costs--of each PDP may vary.
In addition, MMA and CMS regulations require plan formularies--the list
of drugs a PDP covers--to meet certain standards, but within these
standards, the drugs that are covered and the utilization management
tools that are used to control costs may vary.[Footnote 13] If
beneficiaries' drugs are not on their PDP's formulary, rather than
paying full (retail) price for them, beneficiaries may switch to a
similar drug that is on the formulary. Beneficiaries may also request
that the plan make an exception to the formulary and cover their
drugs.[Footnote 14] If the PDP denies that request, CMS regulations
require that beneficiaries generally be able to appeal the decision to
the sponsor.[Footnote 15]
Although certain drugs may be on a PDP's formulary, they may be subject
to one or more of several utilization management tools--the most common
of which are prior authorization, quantity limits, step therapy, and
generic substitution. For drugs subject to prior authorization,
beneficiaries need approval from their PDP before they can fill their
prescription and for drugs subject to quantity limits, the plan limits
the amount of the drug it covers over a certain period of time. For
drugs subject to step therapy, the PDP requires that the beneficiary
first try a less expensive drug for their condition before it will
cover the beneficiary's prescribed drug. Finally, generic substitution
means that when there is a generic substitute available, the PDP will
automatically provide the generic, unless the beneficiary's doctor
specifically orders the brand-name drug.
To help cover costs under Part D, Medicare provides subsidies to
certain low-income beneficiaries. For example, Medicare beneficiaries
for whom Medicaid[Footnote 16] pays their Medicare Part B[Footnote 17]
premium automatically receive the full low-income subsidy. This subsidy
provides the beneficiary with reduced copayment amounts, covers any
deductible, provides drug coverage during the coverage gap, and helps
pay their PDP premium, up to a certain amount.[Footnote 18] Other
Medicare beneficiaries, however, must apply for the low-income subsidy
through the Social Security Administration, and may receive only a
partial subsidy.
Characteristics of PDP Sponsors:
For 2006, 79 sponsors are offering over 1,400 PDPs, each of which has
been approved by CMS to ensure that it meets established standards. Ten
of these sponsors are offering PDPs in all 34 PDP regions, and they
account for nearly 62 percent of PDPs nationwide.[Footnote 19] The
largest PDP sponsors are either in the commercial insurance or pharmacy
benefit management and services sectors and generally have prior
experience with call center operations.[Footnote 20] In addition, the
largest PDP sponsors all have some prior experience with Medicare. Most
offered a Medicare prescription drug discount card or partnered with a
company and most offer Medicare Advantage plans.[Footnote 21]
CSRs Generally Provided Prompt, Courteous, and Helpful Service:
Almost all of the calls we placed were answered by a CSR with minimal
delay. A limited number of calls were not answered by CSRs, mainly due
to disconnections. Further, we found that most CSRs with whom we spoke
were easy to understand, polite, and professional, and many provided
helpful suggestions and information.
Call centers generally provided prompt service in answering our calls.
The wait time to reach a CSR was generally short--46 percent of the 864
calls CSRs fielded were answered in less than 1 minute and 96 percent
of the calls were answered in less than 5 minutes (see fig. 1). Only 9
calls (1 percent) were answered in 10 minutes or more, with the longest
wait time being 25 minutes (1 call). For a small number of calls--36 of
the 900 calls we placed (4 percent)--we did not receive an answer to
our questions because we did not reach a CSR. For almost all of these
calls (33), this occurred because we were disconnected.[Footnote 22]
Figure 1: Percentage of Calls by Wait Time to Reach a CSR, and
Percentage of Calls Where We Did Not Reach a CSR, March 2006:
[See PDF for image]
Source: GAO.
Note: Percentages of calls by wait time to reach a CSR are based on the
864 calls for which we reached a CSR. Percentage of calls where we did
not reach a CSR is based on the total number of calls (900) we placed.
[End of figure]
CSRs generally provided courteous service. Our callers noted that many
were helpful and friendly, and we found that CSRs were easy to
understand, polite, and professional in 98 percent of the calls. In
addition, if a CSR did not know or could not answer a question, many
provided additional resources for obtaining the answer, most commonly
during calls on the low-income subsidy (question 3). While CSRs did not
provide an answer for over one-third of the calls for this question, in
over 80 percent of these cases, CSRs suggested another source the
caller could contact to obtain the answer--most commonly Medicare or
the Social Security Administration.
Many CSRs also provided callers with helpful suggestions that related
to our questions. For example, during question 1 calls on the PDP
comparison for a low-utilization beneficiary, CSRs provided information
about a mail-order option to obtain drugs in 22 percent of the calls.
For question 2 on the PDP comparison for a high-utilization
beneficiary, CSRs provided the caller with information about lower-cost
drugs in 41 percent of the calls and inquired as to whether the
beneficiary was eligible for the low-income subsidy in 24 percent of
the calls.
PDP Sponsor Call Centers Did Not Consistently Provide Callers with
Accurate and Complete Information:
CSRs at the 10 PDP sponsor call centers we contacted provided accurate
and complete responses to about one-third of the calls they fielded,
although the accuracy and completeness rates for each of the 10 sponsor
call centers and for each of the five questions varied. CSRs were
unable to provide an answer for 15 percent of the questions posed,
primarily those related to plan costs. In addition, we found that CSRs
within the same call centers sometimes provided inconsistent responses
to our questions.
About One-Third of CSR Responses Were Accurate and Complete:
Excluding the 4 percent of calls for which we did not reach a CSR, we
obtained accurate and complete responses to 34 percent of the calls--
294 of 864--and obtained incomplete responses to another 29 percent of
the calls (see fig. 2).
Figure 2: Percentage of Calls with Accurate and Complete, Incomplete,
or Inaccurate Responses, and Those Where No Answer Was Provided, March
2006:
[See PDF for image]
Source: GAO.
Note: Percentages are based on the 864 calls for which we reached a CSR
and exclude the 36 calls for which we did not reach a CSR. An
incomplete answer was not possible for question 3. Calls were
categorized as "no answer provided" if the CSR stated that they did not
know or could not provide an answer.
[End of figure]
The overall accuracy and completeness rates for each of the 10 PDP
sponsor call centers varied widely, ranging from 20 to 60 percent (see
fig. 3). Only 1 sponsor call center had an overall accuracy and
completeness rate of greater than 50 percent and 2 sponsor call centers
had rates of 25 percent or less. No sponsor's call center consistently
had the highest or lowest accuracy and completeness rate for all
questions. For example, although 1 call center had the highest accuracy
and completeness rate for both question 1 (the PDP comparison for a low-
utilization beneficiary) and question 2 (the PDP comparison for a high-
utilization beneficiary), it had the second-lowest accuracy and
completeness rate for question 4 (nonformulary drugs).
Figure 3: Lowest, Highest, and Average Sponsor Call Center Accuracy and
Completeness Rate, by Question, March 2006:
[See PDF for image]
Source: GAO.
Note: Percentages are based on the calls for which we reached a CSR and
exclude the calls for which we did not reach a CSR. We placed 180 calls
for each question; we reached a CSR 170 times for question 1, 169 times
for question 2, 174 times for question 3, 176 times for question 4, and
175 times for question 5.
[End of figure]
Variation across call centers was due, in part, to differences in the
resources that CSRs said were available to them. For example:
* In response to questions 1 and 2, CSRs at two call centers indicated
that they were able to compute the annual cost of the least expensive
plan because they had access to a computerized "cost calculator."
However, CSRs at other call centers stated that they could not compute
an annual cost because they did not have access to such a resource. We
located cost calculators on the Web sites of seven sponsors, each of
which had call center CSRs who stated that they did not know or could
not calculate an annual cost.
* CSRs at six different sponsor call centers stated that they could not
calculate the annual cost of the least expensive plan because they did
not have access to the retail prices of the beneficiary's
drugs.[Footnote 23] In contrast, CSRs at two other call centers stated
that they did have access to these prices, and were able to use them in
calculations.
For each of the five questions, accuracy and completeness rates varied,
but were generally low. They ranged from 14 to 60 percent (see fig. 4).
Figure 4: Percentage of Calls with Accurate and Complete, Incomplete,
or Inaccurate Responses, and Those Where No Answer Was Provided, by
Question, March 2006:
[See PDF for image]
Source: GAO.
Note: Percentages are based on the calls for which we reached a CSR and
exclude the calls for which we did not reach a CSR. We placed 180 calls
for each question; we reached a CSR 170 times for question 1, 169 times
for question 2, 174 times for question 3, 176 times for question 4, and
175 times for question 5. An incomplete answer was not possible for
question 3. Calls were categorized as "no answer provided" if the CSR
stated that they did not know or could not provide an answer. Total may
not add to 100 due to rounding.
[End of figure]
Relatively few CSRs were able to accurately identify the least costly
plan and calculate its annual cost.[Footnote 24] In addition, the
annual cost estimates that CSRs provided were often substantially
different from the plans' actual costs. For example:
* For the low-utilization beneficiary (question 1), about 1 in 3
responses were incomplete; that is, CSRs identified the least costly
plan, but either inaccurately calculated its annual cost or stated that
they could not provide any annual cost. Over half of the CSRs that
provided an inaccurate response quoted a cost that was greater than the
actual cost.
* For the high-utilization beneficiary (question 2), about 3 in 10
responses were incomplete. Among the 23 CSRs that correctly identified
the least costly plan, but gave an inaccurate annual cost, almost all
provided a quote that was less than the actual cost, and in 11 cases
over $1,000 less.[Footnote 25]
About two-thirds of the CSRs were unable to accurately report whether
the sponsor offered a PDP for which a Medicare beneficiary that
received help from Medicaid would not have to pay a premium (question
3). Specifically, CSRs fielding this call answered inaccurately 31
percent of the time and did not provide an answer 35 percent of the
time. For most of the inaccurate answers, CSRs stated that a certain
PDP would not require a premium from the beneficiary, but, in fact, it
would. Other inaccurate responses showed a poor understanding of the
low-income subsidy benefit; for example, two CSRs incorrectly stated
that the low-income subsidy did not help offset the premium at all.
Half of the CSRs responding to question 4 incompletely described the
options available to a beneficiary taking a nonformulary drug. Of the
incomplete responses, about 4 in 5 CSRs mentioned that the beneficiary
could request an exception to have the plan cover the nonformulary
drug, but not that the beneficiary could switch to a drug that the plan
covers.[Footnote 26] In addition, 15 percent of CSR responses included
neither possibility, with many CSRs stating that the beneficiary's only
option would be to pay full price for nonformulary drugs.
Finally, CSRs accurately described at least two utilization management
tools in 60 percent of our calls for question 5--the highest accuracy
and completeness rate of our five questions. Other CSRs identified, but
could not accurately describe, specific tools. For example, one CSR
incorrectly stated that quantity limits--a limit on the amount of a
drug that the plan will cover over a certain period of time--means that
a pharmacy may not have enough of a drug to fill the beneficiary's
prescription.
CSRs Did Not Provide Answers to 15 Percent of Calls, Most Often for
Questions regarding Plan Costs:
Overall, CSRs stated that they did not know or could not answer our
question for 15 percent of the calls. This was most common for the
questions related to PDP costs (the PDP comparison for a low-
utilization beneficiary, the PDP comparison for a high-utilization
beneficiary, and the low-income subsidy).
For question 2 calls regarding the PDP comparison for a high-
utilization beneficiary, 30 percent of the CSRs stated that they were
unable to tell the caller which PDP would cost the beneficiary the
least annually. In contrast, only 8 percent of CSRs provided this
response for question 1 on the low-utilization beneficiary. This
difference in the percentage of calls for which an answer was provided
is likely due to the added complexity of comparing PDPs and calculating
the annual cost for a beneficiary using eight drugs versus a
beneficiary using three drugs. However, reliance on at least five drugs
is common in the Medicare population.[Footnote 27]
Question 3 regarding the low-income subsidy had the highest "no answer
provided" rate--35 percent. Of the CSRs that did not provide an answer
to this question, almost all stated that they did not know the subsidy
amount the beneficiary would receive. Because they did not recognize
that beneficiaries with both Medicare and Medicaid automatically
receive the full low-income subsidy, they could not effectively
determine whether that subsidy would cover the sponsor's PDP premiums.
CSR Responses within Sponsor Call Centers Were Inconsistent:
CSRs within the same call center sometimes provided inconsistent
responses to our five questions. For example, within each of six
different call centers, among CSRs who accurately identified the least
costly plan for the low-utilization beneficiary (question 1), some CSRs
calculated an accurate annual cost, some calculated an inaccurate
annual cost, and others stated that they could not calculate an annual
cost. In response to question 2 regarding the high-utilization
beneficiary, different CSRs within five call centers identified each of
their sponsor's PDPs as the least costly. In addition, in response to
questions 1 and 2, CSRs at three call centers told us that it was
against the sponsor's policies to identify any of their plans as having
the lowest annual cost.[Footnote 28] However, other CSRs at each of
these call centers did not cite this policy and did identify a plan as
having the lowest annual cost.
In part, these inconsistencies were due to differences in CSRs'
knowledge about their sponsor's plans. For example, CSRs' varying
knowledge related to the low-income subsidy question (question 3)
produced contradictory responses. Within each of the 10 sponsor call
centers, different CSRs answered accurately, inaccurately,[Footnote 29]
or stated that they did not know or could not answer the question. When
asked about the options for a beneficiary using nonformulary drugs
(question 4), different CSRs within each of 6 sponsor call centers
stated that a beneficiary could either switch to a covered drug or
apply for an exception, stated only that the beneficiary could switch
to a covered drug, stated only that the beneficiary could apply for an
exception, or stated neither possibility. Among CSRs that stated
neither possibility, the specific responses differed. For example, at 1
of the above call centers, although five CSRs answered the question
accurately, one erroneously stated that the beneficiary's only option
was to pay full price for nonformulary drugs, and another erroneously
stated that any drugs not covered by the PDP would be covered under
Medicare Part B.
In answering question 5 on utilization management tools, different CSRs
within the same call center provided varying descriptions of the
utilization management tools PDPs use. For example, although four CSRs
within one call center provided accurate descriptions of at least two
tools, three other CSRs within this call center each provided a
different, and inaccurate, description of utilization management
tools.[Footnote 30] At another call center, two CSRs stated that they
could not describe any tools without knowing the specific drugs the
beneficiary was taking--even though eight other CSRs at that call
center were able to accurately describe at least one tool without
knowing the beneficiary's drugs.
Concluding Observations:
Our calls to 10 of the largest PDP sponsors' call centers show that
Medicare beneficiaries face challenges in obtaining the information
needed to make informed choices about the PDP that best meets their
needs. Call center CSRs are expected to provide answers to drug benefit
questions and comparative information about their sponsors' PDP
offerings. Yet we received accurate and complete responses to only
about one-third of our calls. In addition, responses to the same
question varied widely, both across and within call centers. Sponsor
call centers' poor performance on our five questions raises questions
about whether the information they provide will lead beneficiaries to
choose a PDP that costs them more than expected or has coverage that is
different than expected. Rather than consider PDP options solely on the
basis of the call centers' information, callers may benefit from
consulting other information sources available on Medicare Part D when
seeking to understand and compare PDP options.
Agency Comments and Our Evaluation:
CMS reviewed a draft of this report and provided written comments,
which appear in appendix I.
In its comments, CMS characterized our analysis as based on inaccurate,
incomplete, and subjective methods that limit the report's relevance
and validity. However, CMS went on to say that despite its view on the
study's limitations, GAO is right to be concerned about whether
beneficiaries are getting effective service from plan call centers.
CMS asserted that our questions did not reflect the usual questions
received by PDP sponsor call centers. As noted in the draft report, we
selected topics that were addressed in the Frequently Asked Questions
section of the Medicare.gov Web site and regarded by policy experts and
beneficiary advocates as important to making an informed plan choice.
Furthermore, at a May 2006 meeting with CMS officials, the agency's
Deputy Administrator stated that CSRs should be able to accurately
answer all of the specific questions we posed during the study.
CMS also stated that we asked for information that CSRs are not
required to provide. Specifically, for questions 1 and 2 on PDP
comparisons for low and high-utilization beneficiaries, CMS stated that
it does not require sponsor call centers to provide information on the
annual costs of their PDPs. However, while not necessarily required,
agency officials had indicated that the information we sought from CSRs
was within the scope of plan sponsor customer service efforts. In a
discussion held before we conducted our March calls, CMS officials told
us that the agency had not established any requirements regarding the
specific types of information plan CSRs must be able to provide, but
that it was reasonable to expect CSRs to give callers accurate
information on the topics we included in our review.
In addition, as noted in the draft report, some call centers were
relatively successful in providing accurate and complete answers to
questions 1 and 2, indicating that call center CSRs can handle such
questions appropriately. One call center's CSRs answered the question
accurately and completely in 88 percent of the calls for the low-
utilization beneficiary, and one call center's CSRs responded correctly
in 81 percent of the calls for the high-utilization beneficiary. In
addition, we found that 7 of the 10 PDP sponsors had cost calculators
on their Web sites that could have been used to answer these questions.
CMS commented that, to be counted as providing a complete response to
questions 1 and 2 on PDP comparisons, we expected CSRs to recommend a
specific plan to the caller, a practice that often constitutes
"steering," which is prohibited under Medicare marketing
guidance.[Footnote 31] As noted in the draft report, our callers
identified themselves as family members wishing to assist beneficiaries
in choosing a drug plan. Providing assistance to beneficiaries--which
is encouraged by CMS--generally consists of learning the
characteristics of various PDPs and assessing their relative merits
given the potential enrollee's needs. This is clearly allowed in CMS's
Marketing Guidelines, which distinguish between assistance based on
objective information and steering to a drug plan for financial gain.
CMS also took issue with how we counted a specific CSR response to
questions 1 and 2. The agency incorrectly claimed that a CSR's referral
to 1-800-MEDICARE was categorized as an incomplete response. As noted
in the draft report, we categorized responses as incomplete if the CSR
accurately named the lowest annual cost plan, but either inaccurately
calculated or could not provide the annual cost. If the CSR did not
answer the question and instead referred the caller to 1-800-MEDICARE
for information on PDPs, we classified the response as "no answer
provided."
CMS stated that the wording of question 3 on the low-income subsidy was
inaccurate and therefore misleading. This question specifies that the
beneficiary automatically qualifies for extra help because Medicaid
pays part of her Medicare premiums. According to CMS, the wording of
question 3 is incorrect because only Medicare pays the drug premium for
low-income beneficiaries and Medicaid would fully (not partly) pay the
Part B premium. However, CMS's comment conflicts with the information
we obtained from its Medicare.gov Web site in developing the wording
and answer for this question. Using the Web-based PDP finder tool on
this Web site, the user can select one of several options specifying
why the beneficiary qualified for extra help. We selected the option
specifying that the beneficiary automatically qualified for extra help
because they receive "help from [the] State paying Medicare premiums."
We agree that only Medicare, and not Medicaid, pays the Medicare Part D
premium for low-income beneficiaries and Medicaid would fully (not
partly) pay the Part B premium. Therefore, for such a beneficiary,
Medicaid would pay part of the beneficiary's Medicare premiums.
CMS also stated that, for certain questions, many reasonable answers
were not counted as correct. The agency cited our question regarding a
beneficiary's options should he or she be prescribed a nonformulary
drug, and asserted that our criteria for a correct response--switching
to a covered drug or asking for an exception--was too limited. The
agency stated that other reasonable answers should have been counted as
correct because we conducted our calls at a time when all plans covered
all Part D drugs.[Footnote 32] We obtained the answer to this question
from a script that CMS approved for use by CSRs operating its 1-800-
MEDICARE help line. In addition to the two options we used as criteria
for an accurate and complete answer, the script mentioned that PDPs are
required to provide beneficiaries with temporary transitional coverage
(generally for 30 days after enrollment) of drugs not on the PDP's
formulary. However, according to CMS, the purpose of this temporary
coverage is to provide beneficiaries with sufficient time to switch to
another drug or to request an exception to the formulary. Therefore, in
specifying our criteria for an accurate and complete answer, we chose
to include only the two options that CMS sees as longer-term solutions
for the beneficiary.
CMS stated that we did not examine certain features of the support
services that plan sponsors' call centers are required to provide, such
as hours of operation, wait times, disconnection rates, and language
services. It also noted requirements that plans report a range of
performance measures, such as beneficiary complaint rates and
timeliness of exceptions and appeals decisions. As noted in the draft
report, the scope of our review was limited to the accuracy and
completeness of information disseminated to the public by PDP sponsors'
call centers--a feature of plan customer service for which CMS has
established no performance requirements.
Finally, CMS believes that, as written, our study provides little
practical guidance of value in improving the drug benefit and that our
conclusion--that callers may benefit from consulting other information
sources available on Medicare Part D when seeking to understand and
compare PDP options--is obvious. In quoting our conclusion, CMS omitted
the key part of the paragraph preceding the quoted phrase where we
state that "sponsor call centers' poor performance on our five
questions raises questions about whether the information they provide
will lead beneficiaries to choose a PDP that costs them more than
expected or has coverage that is different than expected. . . ." We
continue to believe that plan sponsors should be accountable for the
accuracy of their information and make maintaining effective call
centers a priority.
CMS also provided us with detailed, technical comments, which we
incorporated where appropriate.
As agreed with your offices, unless you publicly announce the contents
of this report earlier, we plan no further distribution of it until 30
days from the date of this letter. We will then send copies to the
Administrator of CMS, appropriate congressional committees, and other
interested parties. We will also make copies available to others upon
request. This report is also available at no charge on GAO's Web site
at [Hyperlink, http://www.gao.gov].
If you or your staffs have any questions about this report, please
contact me at (312) 220-7600 or aronovitzl@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report. GAO staff who made contributions to
this report are listed in appendix II.
Signed by:
Leslie G. Aronovitz:
Director, Health Care:
List of Requesters:
The Honorable John D. Dingell:
Ranking Minority Member:
Committee on Energy and Commerce:
House of Representatives:
The Honorable Henry A. Waxman:
Ranking Minority Member:
Committee on Government Reform:
House of Representatives:
The Honorable Charles B. Rangel:
Ranking Minority Member:
Committee on Ways and Means:
House of Representatives:
The Honorable Sherrod Brown:
Ranking Minority Member:
Subcommittee on Health Committee on Energy and Commerce:
House of Representatives:
The Honorable Pete Stark:
Ranking Minority Member:
Subcommittee on Health Committee on Ways and Means:
House of Representatives:
[End of section]
Appendix I: Comments from the Centers for Medicare & Medicaid Services:
Department Of Health & Human Services:
Centers for Medicare & Medicaid Services:
200 Independence Avenue SW:
Washington, DC 20201:
Date: Jun 15 2006:
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 Part D: Prescription Drug Plan Sponsor Call Centers Do Not
Consistently Provide Accurate and Complete Information" (GAO-06-710):
Thank you for the opportunity to review and comment on the GAO's draft
report entitled, "MEDICARE Part D: Prescription Drug Plan Sponsor Call
Centers Do Not Consistently Provide Accurate and Complete Information."
Plan call center performance is very important for our beneficiaries,
and so any important gaps in plan performance must be addressed
promptly. Since the drug benefit began, we have identified areas where
plan performance has fallen short and have directed plans to correct
deficiencies. For example, we directed plans to reduce excessive call
center wait times at the beginning of the year. We are pleased that
your one-time evaluation in early March found results similar to our
ongoing plan monitoring: plans generally are achieving low caller wait
times and high call completion rates. But we are concerned about
inaccurate, incomplete, and subjective methods in GAO's analysis that
limit its relevance and validity. These problems appear to affect all
five questions in GAO's analysis.
As you note, customers must receive both timely and effective service
when they use a plan help line. However, while GAO's five questions
reflect topics of clear interest to many Medicare beneficiaries in
choosing a drug plan, they do not reflect the usual questions received
by plan call centers or the support services that plan call centers are
required to provide. In addition, some of the answers that GAO viewed
as right, wrong, or incomplete contradict the guidance and requirements
that Medicare has provided to plans.
Some GAO questions asked customer service representatives for
information that they are not required to provide, and may even be
prohibited from providing. For example, during the open enrollment
period, we strongly encouraged beneficiaries to contact 1-800-MEDICARE
or to use the computerized resources available at medicare.gov or
through literally thousands of independent counseling partners around
the country. These resources enable beneficiaries to get comparative
pricing information on all available plans. Contacting one plan after
another is an unnecessarily time-consuming approach that may not
provide consistent information. For this reason, Medicare has never
required drug plan call centers to provide detailed information about
the prices of specific combinations of drugs. Despite this fact, two of
GAO's five questions were on this topic. Moreover, according to GAO, a
"complete" answer required recommending a specific plan to a caller,
even though this practice often constitutes "steering" that is
prohibited under Medicare's marketing guidance. And GAO counted as an
incomplete answer what we recommend that plans do in these cases: refer
callers to 1-800-MEDICARE for one-stop, objective information on all
available plans.
Another GAO question was factually inaccurate, and therefore
misleading. It is not the case for any beneficiary that "My mother
automatically qualifies for extra help because Medicaid pays part of
her Medicare premiums." Only Medicare pays the drug premium for low-
income beneficiaries, and Medicaid would fully (not partly) pay the non-
drug, Part B premium. Because this is a statement that is unlikely to
occur among actual callers, it is understandable that the customer
service representative might not name a plan option for which the
beneficiary pays no premium, since the description would not obviously
apply to any beneficiary. Why didn't GAO simply phrase the question as:
"My mother automatically qualifies for extra help because she has
Medicare and Medicaid," or (what we hear much more commonly) "`My
mother has. Medicaid and Medicare"?
Finally, for some questions, GAO's questions were generally worded and
many reasonable answers were not counted. For example, when GAO
conducted its survey in March, every plan was covering every Part D
drug for every beneficiary. And some of the most popular plans have
open formularies that cover all or essentially all drugs. As a result,
the two specific answers counted as "correct" for GAO's question about
nonformulary drugs - switching to a covered drug or asking for an
exception - do not constitute a full set of reasonable answers.
In our Detailed Comments, we describe other questionable features of
GAO's methods that raise further questions about whether GAO's findings
reflect problems in study design rather than plan response.
Despite all of these limitations, GAO is right to be concerned about
whether beneficiaries are getting effective service from plan call
centers. Medicare beneficiaries should be able to count on the customer
service from their plans. For this reason, CMS has implemented a broad
set of requirements for call centers that reflect the services they
should be expected to provide reliably. Plan sponsors must maintain a
toll-free customer service call center that is open during usual
business hours and provides customer telephone service in compliance
with standard business practices. This means that the Plan sponsors
must comply with at least the following:
* Call center operates during normal business hours, but not less than
seven days a week from 8:00 AM to 8:00 PM for those time zones in which
the Applicant offers a PDP ;
* Eighty percent of all incoming customer calls are answered within 30
seconds;
* The abandonment rate of all incoming customer calls does not exceed 5
percent;
* Call center provides thorough information about the PDP benefit plan,
including co-payments, deductibles, and network pharmacies;
* Call center features an explicit process for handling customer
complaints; and;
* Call center shall provide service to non-English speaking and hearing
impaired beneficiaries.
In addition to these requirements, CMS requires plans to report on a
broad range of performance measures, many of which would indicate
problems in the practical uses of customer service lines. For example,
plans report complaint rates per 1,000 beneficiaries, timeliness of
exceptions and appeals reporting, and grievances to CMS on a quarterly
basis. Unfortunately, the GAO analysis did not look at any of these
practically important features of plan customer service lines. Further,
CMS is tracking complaints made through our 1-800 lines, regional
offices, or partner organizations to identify patterns that would
indicate a significant problem with a plan customer service line.
More generally, it is worth noting that CMS has implemented a
comprehensive Part D oversight program that incorporates training of
Part D sponsors on programmatic, systems, and compliance issues;
continuous oversight and formal compliance action as necessary, and
peer comparison and public reporting on key performance metrics. The
goals of CMS' oversight strategy are to assist with Part D plans' start-
ups, continuously identify Part D program vulnerabilities, assure
strict adherence to Part D regulatory and program requirements, to use
oversight and formal compliance actions as necessary, and to detect and
prevent fraud, waste, and abuse. CMS expects to accomplish these
objectives without impeding the ability of Part D contactors to deliver
industry standard performance. Since these strategies, we have seen
progress over the last several months in plans' responsiveness,
including improvement in call center wait times, as well as a
decreasing number of complaints made by beneficiaries and providers.
As a final general comment, we would again request that GAO share
details of their methods in advance, or at least in the course of
review, so that the validity issues and the disconnect between Medicare
requirements and GAO evaluation criteria can be avoided. Transparency
and clarity from GAO would also help CMS identify actual gaps in plan
performance that require further action; as written, the GAO study
provides little practical guidance of value in improving the drug
benefit.
Indeed, GAO's principal conclusion - "callers may benefit from other
information sources available on Medicare Part D when seeking to
understand and compare PDP options" - has been obvious from the start
and is the reason we have invested so much in providing objective
assistance to beneficiaries and in working with thousands of partner
organizations to do so. For many types of questions (i.e., 1-800-
MEDICARE, www.Medicare.gov, and individual counseling through a vast
network of partners), these other objective, independent sources can
provide more complete and efficient personalized assistance,
particularly for evaluating plan choices. Fortunately, millions of
Medicare beneficiaries took advantage of these sources. They are also
reporting relatively low rates of complaints about the plans,
indicating that plan customer service is effectively complementing
these additional sources of assistance for most people. As a
result, beneficiaries are filling around 3 million prescriptions daily
using their Medicare drug coverage, at a much lower cost than had been
predicted.
[End of section]
Appendix II: GAO Contact and Staff Acknowledgments:
GAO Contact:
Leslie G. Aronovitz, (312) 220-7600 or aronovitzl@gao.gov:
Acknowledgments:
In addition to the contact named above, Rosamond Katz, Assistant
Director; Manuel Buentello; Jennifer DeYoung; and Joanna L. Hiatt made
major contributions to this report. Other contributors include Lori D.
Achman, Diana B. Blumenfeld, Gerardine Brennan, Laura Brogan, Lisa L.
Fisher, M. Peter Juang, Martha R.W. Kelly, Ba Lin, and Michaela M.
Monaghan.
FOOTNOTES
[1] Pub. L. No. 108-173, § 101, 117 Stat. 2066, 2071-2152 (to be
codified at 42 U.S.C. §§ 1395w-101--1395w-152).
[2] Although beneficiaries may obtain drug coverage through either
stand-alone PDPs or Medicare Advantage (Medicare's private health plan
option) drug plans, this report addresses only stand-alone PDP sponsor
call centers. About 90 percent of Medicare beneficiaries are enrolled
in traditional Medicare, rather than Medicare Advantage. Therefore,
most beneficiaries will be making choices among stand-alone PDPs.
[3] Other sources of information about Part D and specific PDPs include
sponsors' Web sites, and CMS's Medicare.gov Web site and 1-800-MEDICARE
toll-free help line.
[4] The 2006 open enrollment period is November 15, 2006, through
December 31, 2006. Beneficiaries enrolling during this period will have
coverage effective January 1, 2007. Certain beneficiaries (such as
certain low-income beneficiaries) may switch PDPs at any time.
[5] We placed calls at different times of the day and days of the week
to match the typical pattern of calls reported by the 1-800-MEDICARE
help line for January 2006. (CMS requires that each PDP sponsor operate
its toll-free call center 7 days a week from at least 8:00 am to 8:00
pm in the time zones in which it offers PDPs.) The population
contacting 1-800-MEDICARE is likely to be very similar to the
population contacting PDP sponsor call centers.
[6] During our actual calls, CSRs were not aware that their responses
would be included in a research study.
[7] We used drug dosages and frequency information based on actual
prescriptions.
[8] See J. Antos, "Cutting through Confusion in Part D," American
Enterprise Institute for Public Policy Research: Health Policy Outlook,
no. 2 (2006): 1-7, and J. Hoadley, statement before the Government
Reform Committee Briefing on the Medicare Drug Benefit, January 20,
2006.
[9] For the three questions about PDP costs, the source of our answer
was Medicare.gov. We periodically checked that Web site and updated our
answers, as needed. We also confirmed the accuracy of these data by
checking PDP sponsor Web sites, where possible.
[10] CMS does not have performance standards governing the accuracy
rate of PDP call centers. However, the agency does have such a standard
for 1-800-MEDICARE CSRs, striving for a 90 percent accuracy rate. In
2004 and 2006, we reported on the accuracy of information provided by 1-
800-MEDICARE CSRs. See GAO, Medicare: Accuracy of Responses from the 1-
800-MEDICARE Help Line Should Be Improved, GAO-05-130 (Washington,
D.C.: Dec. 8, 2004) and GAO, Medicare: Communications to Beneficiaries
on the Prescription Drug Benefit Could Be Improved, GAO-06-654
(Washington, D.C.: May 3, 2006).
[11] As defined in MMA, for 2006, the standard benefit includes a $250
deductible, and 25 percent coinsurance for costs after the deductible
has been met, but before the initial limit of $2,250 in total drug
spending is reached. Once this initial limit is reached, beneficiaries
must pay 100 percent of their drug costs until total drug spending
reaches the catastrophic limit of $5,100 ($3,600 in out-of-pocket
spending). The amount between $2,250 and $5,100 is referred to as the
"coverage gap." Once beneficiaries reach the catastrophic limit, they
pay only 5 percent of their drug costs for the rest of the calendar
year, with Part D paying 95 percent.
[12] Medicare Payment Advisory Commission, Report to the Congress:
Increasing the Value of Medicare (Washington, D.C. June 2006), 145.
[13] MMA requires that formularies include at least two drugs in each
approved category and class (unless only one drug is available for a
particular category or class). MMA 117 Stat. 2085 and 69 Fed. Reg.
46,632, 46,660 (Aug. 3, 2004). Formularies often consist of different
"tiers," which are categories of drugs grouped according to their cost.
[14] 42 C.F.R. § 423.578(b) (2005).
[15] 42 C.F.R. § 423.580 (2005).
[16] Medicaid provides health care coverage to eligible low-income
people and is jointly financed by the federal government and the
states.
[17] Medicare Part B provides coverage for certain physician,
outpatient hospital, and other services to beneficiaries who pay
monthly premiums.
[18] The amount of the subsidy varies by PDP region and does not cover
the entire premium of all PDPs. Accordingly, not all PDP sponsors have
a plan for which the subsidy covers the plan's entire premium.
[19] The Henry J. Kaiser Family Foundation, The Landscape of Private
Firms Offering Medicare Prescription Drug Coverage in 2006 (Washington
D.C.: March 2006).
[20] Many employer-sponsored health plans and insurers contract with
pharmacy benefit managers for services such as negotiating price
discounts with retail pharmacies, operating mail-order prescription
services, and formulary development and management.
[21] The prescription drug discount card was a program authorized by
MMA to give beneficiaries access to lower-priced drugs from 2004
through 2005.
[22] We did not reach a CSR for the remaining three calls due to system
errors or because the calls were misdirected, such as if the
interactive voice response stated that the sponsor's call center was
closed and that the caller should call back during certain specified
hours. However, the call had been placed during those hours.
[23] In estimating the amount a beneficiary pays annually, information
on the plan's negotiated retail price is required, for example, to
account for the purchase of any nonformulary drugs or the purchase of
drugs during the coverage gap. In both these instances, the beneficiary
typically pays the plan's negotiated retail price for the drug.
[24] Inaccurately identifying the sponsor's least costly plan and its
annual cost could have financial consequences for beneficiaries because
the actual cost differences among sponsors' PDPs were often
substantial. In the low-utilization beneficiary scenario, for 8 of the
10 sponsors, the cost differences between the least costly and the next-
to-least costly PDP ranged from $106 to $388 per year. For the
remaining 2 sponsors, the differences were less than $25. In the high-
utilization beneficiary scenario, for 3 of the 10 sponsors, the cost
differences between the least costly and the next-to-least costly PDP
ranged from $517 to $2,346 per year. For the remaining 7 sponsors, the
differences were less than $200.
[25] For question 2 regarding the high-utilization beneficiary, the
annual cost of the least expensive PDP for each sponsor ranged from
$3,659 to $7,122.
[26] A few CSRs mentioned that certain drugs (such as barbiturates,
which are often used for seizure disorders or to relieve anxiety, and
benzodiazepines, which are often used to treat anxiety and insomnia),
are excluded from Part D completely and can never be covered.
[27] See Health Affairs--Web Exclusive: Prescription Drug Coverage And
Seniors: Findings From A 2003 National Survey, April 19, 2005.
[28] In three of these calls, the CSR further stated that it was the
individual's responsibility to determine the least costly plan.
[29] Inaccurate responses include CSRs that stated there was one plan
without a premium (when there was not), there was no plan without a
premium (when there was), and that none of the sponsor's plans had a
premium.
[30] Specifically, one CSR at the call center stated that, for drugs
subject to utilization management, the beneficiary may have to get a
new prescription each time they obtain their drugs, rather than
obtaining refills at the pharmacy. Another CSR at this call center
stated that, for drugs subject to utilization management, the
beneficiary will need a prescription for any "addictive" drugs. A third
CSR said that utilization management means that certain drugs may only
be covered at select pharmacies and specific strengths of certain drugs
may not be covered.
[31] Steering constitutes an attempt to guide beneficiaries to a
specific PDP or group of PDPs to further financial or other interests.
[32] Because all PDPs do not routinely include all Part D drugs on
their formularies, we assume that CMS's comment refers to the
requirement that all beneficiaries enrolled in January or February 2006
receive temporary drug coverage through March 2006, and that all
beneficiaries enrolled thereafter receive temporary drug coverage for
at least 30 days.
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