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TSCL Member Testifies On The Impact Of Drug Switching By HMOs Mary Jane Lathrop joined a Medicare Health Maintenance Organization (HMO), after confirming that the health plan would cover her high blood pressure medication, Zestril. For three years she had no problem. Then one day when she sent in for her monthly Zestril refill, she learned it was no longer covered. Her HMO never notified her of the change. In testimony before the Senate Special Committee on Aging in July of 1999, long-time TSCL member Lathrop painted a troubling picture of a dilemma that is becoming increasingly common for Medicare HMO members. Because Zestril was no longer covered, she was forced to try alternate blood pressure prescriptions. Over the following three weeks she was given three different prescriptions to control her high blood pressure. The first, Lotesin, had a hefty $60 co-payment which she could not afford. None of the alternates worked well, and her blood pressure shot up immediately. Lathrop finally left her HMO. Prescription drug coverage is one of the most compelling reasons that over six million of the approximately 39 million Medicare beneficiaries have enrolled in health plans offered by HMOs. Although traditional Medicare does not cover outpatient prescription drugs, about 90% of HMOs do provide this benefit. HMOs use a variety of techniques to control the costs of providing prescription drugs. Most use a "formulary" or list of "preferred" drugs. HMOs may cover only formulary drugs or provide financial incentives to use formulary drugs. HMOs routinely review the formularies and drugs may be dropped from the list, thus requiring HMO members to switch to alternate formulary drugs or increase their out-of-pocket spending, in some cases to the full price of the drug. At the same July hearing, William Scanlon, Director of Health Financing and Public Health Issues, testified that Medicare beneficiaries "need clear and easily understood information that includes the drugs the formularies cover, how formulary changes are handled, and policies and procedures for requesting coverage of nonformulary drugs. While particular formulary changes are not predictable, beneficiaries do enroll in Medicare+Choice plans (which include HMOs) with the knowledge that Medicare contracts do not allow benefits to be reduced during the course of the contract year. Beneficiaries thus also need a clear understanding of which formulary changes would constitute a reduction of drug benefits and therefore would be unallowable during a contract year." Source: Testimony of Mary Jane Lathrop, Hearing of the Special Committee on Aging, "Drugstore Surprise: The Impact Of Drug Switching On Older Americans,"July 20, 1999. "Prescription Drug Benefits: Impact of Medicare HMOs' Use Of Formularies On Beneficiaries," testimony of William J. Scanlon, Director Health Financing and Public Health Issues, before the Special Committee On Aging, U.S. Senate. This article first appeared in Volume 4, Issue 10 of "The Social Security and Medicare Advisor" newsletter (October/1999). To receive future editions of "The Advisor" in its special, free e-mail version, please click here. | ||||||||
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