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Local Health Insurers Battle Medicare Program Woes

After spending tens of millions of dollars preparing and launching plans that take advantage of the new Medicare Part D prescription drug discounts, local health insurers have been forced to grapple internally with the many problems associated with the rollout of the plan. David Olson, spokesman for Woodland Hills-based Health Net Inc., said that his company spent $30 million preparing to launch its new prescription drug plans and established a senior products division early in the year to support the new plans. “This has been a massive change that’s involved a tremendous amount of information and data exchanged among several parties, but we’ve been working hard to make sure all our members are getting the prescriptions they need. We’ve increased our call center capacity by 50 percent,” said Olson concerning the company’s response to the problems. Earlier this month, Dr. Mark B. McClellan, administrator of the Centers for Medicare and Medicaid Services, said that several hundred thousand people who switched plans had difficult filling prescriptions during January. In California, estimates were that 200,000 of the 1.1 million low-income Medicare members had trouble getting their prescriptions filled. In order to help fix what elected officials in both political parties have called a poorly managed beginning to the prescription drug program, the federal government sent a directive to all of the Medicare drug plans with orders that insurers cover a 30-day emergency supply of drugs that people were using before the start of the new program. Gov. Schwarzenegger signed orders to guarantee payments to pharmacies in order to make sure that every prescription is filled. Governors of about 20 other states have signed similar orders. McClellan said that the latest corrections to the plan would ensure that drugs would reach the right patients. Olson said that as January progressed, the company was able to improve its communication with the federal government and greatly improve the functioning of its Part D claims management. “All indications are that, as time has gone on, the problems discussed in the press are definitely getting better, and the important thing is that people are getting the drugs they need when they need them,” Olson said. As of Jan. 19, Health Net was processing 35,000 Part D claims every day, and had enrolled more than 270,000 people for Part D plans alone and increased enrollment in its Medicare Advantage plans. Kellie Bernell, spokeswoman for Thousand Oaks-based Blue Cross of California, said the company’s parent, WellPoint Inc., had enrolled about one million members in its Medicare Advantage plans, and expects that number to double by the end of 2006. Bernell said the company did face some complications in launching its Part D plans but continued collaboration with the government, insurance brokers and pharmacists is helping. “It’s been a collaborative effort, the health plans have been working with CMS and other health industry partners to ensure that we are putting systems in place to work through some initial challenges,” Bernell said. Blue Cross has also increased its call center capacity, but Bernell said that the sheer volume of documents the company needs to transfer to pharmacists has been a complicated task. “We’re doing our best to educate our pharmacy partners on how to access the appropriate patient information,” Bernell said. “Over 42 million seniors now have access to new prescription drug benefits, and even with help we’re all still adjusting.” Dealing with national pharmacy chains like Walgreens and CVS has been more efficient, Bernell said, because insurers need to communicate only with corporate offices rather than each individual pharmacy. Independent pharmacies across the country, however, must be dealt with one by one. “We all understand that the rollout of any new program is complicated, but we appreciated what we have learned along the way,” Bernell said. “We are prepared to continue to make improvements where we see there’s a need.” Neither company is backing off from its marketing campaigns while they work to make the Medicare plans more efficient. Health Net has launched a national advertising campaign that features its new Medicare Part D plans and its executives have said diversifying membership along its different product lines is a key to the company’s financial success. Blue Cross, which relies on its broker and agent channels to generate much of its business, is providing those corporate partners with extensive training on the company’s Part D benefits in order to meet its enrollment goals.

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