Feds say they will reimburse the state for drug costs

| 29 Sep 2011 | 08:03

    TRENTON — Federal officials said last Tuesday that states would be reimbursed for money spent on medicines for residents wrongly denied coverage under the new Medicare prescription drug plan. The announcement came the same day New Jersey’s governor and Democratic congressional delegation called for such payments. Gov. Jon S. Corzine said New Jersey is spending $1.3 million a day buying drugs that should be covered under the plan, but aren’t because of glitches in the program. At a news conference Tuesday morning, he characterized the situation as “a real crisis for the state of New Jersey, but more importantly a real crisis for the human beings that are involved in a system that is out of control.” Lawmakers reported numerous instances of people being denied sometimes lifesaving drugs and computer glitches resulting in failures to recognize legitimate enrollees. In addition, only a fraction of those eligible for care under the program have thus far chosen a provider, officials said. The benefit began on Jan. 1. Under the program, Medicare beneficiaries enroll in private plans that get a government subsidy to provide prescription drug coverage. But the program got off to such a difficult start that more than 20 states opted to continue emergency coverage for some of their low-income residents. Those residents often didn’t show up in pharmacists’ computers as being enrolled in a plan. On other occasions, the residents were charged fees for their medicine that far exceeded what they were supposed to pay. Previously, officials said reimbursement to the states would come from the private plans themselves. But the states may have incurred some expense above and beyond what the plans are required to pay. In those cases, the federal government will step in. New Jersey Sen. Frank Lautenberg, co-sponsor of a measure aimed at forcing the Bush administration to reimburse states, said the announcement “is no solution.” “It is simply more red tape from the Bush administration,” Lautenberg said in a statement. “If anything, today’s announcement only makes the problem worse. First, states had to step in and spend millions to prevent the Medicare system from collapsing at the beginning of this year. Now the federal government wants the states to act as its bill collectors. The burden on the states keeps growing, when the Federal Government should just do its job and pay back the states immediately.” Lautenberg said 26 states and the District of Columbia have moved to help residents who are being denied coverage. Marilyn Askin, former president of the AARP New Jersey, said advocates for the elderly and disabled hoped the federal government would have chosen a simpler plan. “AARP’s position was always, ‘This bill is not perfect. Let’s get our foot in the door, then make it better,”’ Askin said.