[Congressional Record Volume 152, Number 3 (Friday, January 20, 2006)]
[Senate]
[Pages S19-S25]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LAUTENBERG (for himself, Ms. Snowe, Mr. Schumer, Mr. 
        Coleman, Mrs. Feinstein, Mr. Pryor, Mr. DeWine, Mrs. Boxer, Mr. 
        Menendez, Ms. Collins, Mr. Dayton, Mr. Reed, Mr. Jeffords, Mrs. 
        Lincoln, Mr. Leahy, Mr. Wyden, Ms. Stabenow, Mr. Johnson, Mr. 
        Kennedy, Mr. Dorgan, Mr. Lieberman, Mrs. Clinton, Mr. Chafee, 
        and Mr. Dodd):
  S. 2181. A bill to amend title XIX of the Social Security Act to 
provide for an offset from the Medicaid clawback for State prescription 
drug expenditures for covered part D drugs for Medicare beneficiaries; 
to the Committee on Finance.
  Mr. LAUTENBERG. Mr. President, I rise to introduce the Medicare State 
Reimbursement Act along with my colleagues, Senators Snowe, Schumer, 
Coleman, Feinstein, Pryor, DeWine, Boxer, Menendez, Collins, Dayton, 
Reed, Jeffords, Lincoln, Leahy, Wyden, Stabenow, Johnson, Kennedy, 
Dorgan, Lieberman, Clinton, Chafee and Dodd.
  There have been many difficulties surrounding implementation of the 
Medicare prescription drug benefit, however, few have experienced the 
severity of the problems that those who are dually eligible for both 
Medicare and Medicaid have faced.
  ``Dual Eligibles'' are the Nation's poorest seniors and the disabled. 
Many suffer from multiple, chronic, debilitating conditions and on 
average take between five and ten medications per day. Missing even one 
dose of medication could result in a life threatening situation.
  Across America, countless beneficiaries who tried to have their 
prescriptions filled for the first time under the new system were told 
that their enrollment could not be verified, their drugs were not 
covered, or they would be charged larger co-payments or deductibles 
than they could afford. As a result, many were at risk of not receiving 
lifesaving prescription drugs.
  Regardless of how Senators voted on the Medicare Drug bill, I think 
all Senators can agree on one thing: the flaws in the startup of this 
program are unacceptable.
  Fortunately, a number of States including New Jersey have taken 
actions to help those who have experienced problems with access to 
medications under the new prescription drug benefit. As of Wednesday 
this week, New Jersey had already spent $16.6 million dollars.
  Congress has been asking the Centers for Medicare and Medicaid 
Services whether New Jersey and other States will be paid back for its 
expenditures. The answers we have gotten so far are not satisfactory.
  That is why we need to legislate on this issue. It must be crystal 
clear to the Federal Government that it needs to repay these States 
that are bailing them out.
  Accordingly, I am introducing emergency legislation today that will 
reimburse States for the cost they have incurred for filling this 
unanticipated gap in coverage.
  Specifically, this legislation would: require the Federal Government 
to reimburse the states for the cost of prescriptions for low income 
seniors and people with disabilities (``dual eligibles'') who were 
eligible for coverage under Medicare Part D, but were improperly denied 
Federal coverage.

[[Page S24]]

  Reimburse states through an equivalent reduction in funds owed by 
each state under the ``claw back'' provision of the new Medicare law.
  Reimbursement will be at a rate equal to 100 percent of all State 
costs plus an interest rate equal to the market rate on 3-month 
Treasury Securities plus 0.1 percent.
  Directs the Secretary of HHS to recover overpayments by states to 
private prescription drug plans and return that money to the Medicare 
Trust Fund.
  This is not just about access to the Federal entitlement program--
it's about life and death.
  I urge my colleagues on both sides of the aisle to support this 
legislation and move for its immediate passage.
  I ask unanimous consent that the text of the bill be printed in the 
Record.

                                S. 2181

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Medicare State Reimbursement 
     Act of 2006''.

     SEC. 2. FEDERAL RESPONSIBILITY FOR STATE PRESCRIPTION DRUG 
                   EXPENDITURES FOR COVERED PART D DRUGS FOR 
                   MEDICARE BENEFICIARIES.

       Section 1935(c) of the Social Security Act (42 U.S.C. 
     1396v(c)) is amended--
       (1) in paragraph (1)(A), by striking ``Each of the 50 
     States'' and inserting ``Subject to paragraph (7), each of 
     the 50 States''; and
       (2) by adding at the end the following new paragraph:
       ``(7) Offset for state prescription drug expenditures for 
     covered part d drugs for medicare beneficiaries.--
       ``(A) In general.--The amount of payment for a month 
     (beginning with January 2006) under paragraph (1) shall be 
     reduced by an amount equal to the sum of--
       ``(i) the amount (as documented by the State) that the 
     State expended during the month for payment for covered part 
     D drugs for part D eligible individuals who are enrolled in a 
     prescription drug plan under part D of title XVIII but were 
     unable to access on a timely basis prescription drug benefits 
     to which they were entitled under such plan; and
       ``(ii) interest on such amount (for the period beginning on 
     the day after the date on which an expenditure described in 
     subparagraph (A) is made and ending on the date on which 
     payment is made under paragraph (1)) at a rate equal to the 
     weighted average of interest on 3-month marketable Treasury 
     securities determined for such period, increased by 0.1 
     percentage point.
       ``(B) Recovery of reduced payment from prescription drug 
     plans.--The Secretary shall provide for recovery of payment 
     reductions made under subparagraph (A) from those 
     prescription drug plans under part D of title XVIII or MA-PD 
     plans under part C of such title that would otherwise be 
     responsible for the expenditures described in subparagraph 
     (A)(i). Any such amounts recovered shall be deposited into 
     the Medicare Prescription Drug Account in the Federal 
     Supplementary Medical Insurance Trust Fund.''.

  Ms. SNOWE. Mr. President, I am pleased to join with Senator 
Lautenberg today to introduce urgent legislation to assist the many 
States which have stepped forward to provide an essential safety net to 
our Medicare Part D beneficiaries. Our States have acted as ``payers of 
last resort''--as beneficiaries faced unaffordable costs when errors in 
implementing their coverage denied them access to vital medications. 
The Medicare State Reimbursement Act will reimburse our States for 
their costs in assuring that millions receive their medications. So 
many of our colleagues have recognized the crisis which was averted--
Senators Coleman, Schumer, DeWine, Feinstein, Collins, Jeffords and 
many more have joined us in this bipartisan effort to support the 
States in the vital role they have played in countering a deficit of 
action by the Federal bureaucracy.
  The introduction of the prescription drug benefit is a landmark step 
in the progress of Medicare. This benefit will save the average senior 
about $1,000 per year. This is the relief that millions have needed for 
so long. It must eliminate the terrible choices so many have had to 
make between vital medications and the other essentials of life--not 
create new dilemmas.
  As we worked to ensure a prescription drug benefit, many of us worked 
hard to assure special help to those with the most limited resources. 
We enacted a benefit which provided additional help for those on 
limited incomes, including millions who rely on both Medicare and 
Medicaid--our ``dual eligibles''. It was essential that these 
individuals would see uninterrupted coverage of their essential 
medications. So we needed to ensure each would be enrolled in a drug 
plan. To do this, the Centers for Medicare and Medicaid Services, CMS, 
randomly assigned each of them to a plan. In a program based on 
competition--based on choices--plans are going to differ. To find the 
best plan, one must make an educated choice, not a random assignment.
  So the result of random assignment was predictable. Many 
beneficiaries wound up in plans which did not cover their drugs. My 
State of Maine immediately stepped forward to work to assure that every 
beneficiary was matched with the plan which best met their needs. As 
plans were reviewed, my State found a third of those reviewed--15,000 
beneficiaries--were not enrolled in the most appropriate drug plan. 
Getting each into the plan that met their medication requirements was 
essential to meeting their needs.
  Despite these best efforts to improve the situation, some 
beneficiaries were not in a plan at all, while others were in plans 
which seemed not to understand that every beneficiary was to be allowed 
a refill of their existing medications. So as beneficiaries came to 
their local pharmacies to get prescription refills, many faced great 
obstacles in getting the drugs they needed. We had heard of some 
problems in validating enrollment eligibility, but at year end, these 
just became worse, and we found beneficiaries were not properly 
enrolled, plans were not giving the proper transition refills, and co-
payments charged were often excessive. As individual faced co-payments 
of $100 or more--instead of the $5 or less they should have been 
charged--many simply couldn't afford their medications. Thankfully, our 
States have stepped in to make sure low income seniors received their 
medications. In Maine alone, approximately $5 million in assistance has 
been given to ensure medications are dispensed.
  This drug benefit must increase access, not make it more difficult. I 
am appalled, that with all the technology we have, so many have faced 
such difficulties in the implementation of this benefit. I salute the 
forbearance of our pharmacies, as they strived to meet essential needs, 
and the efforts of my State and others which have assured that these 
most vulnerable Americans not suffer from the failures of either the 
Federal bureaucracy or the plan administrators.
  So what this legislation does is simple. It authorizes CMS to 
reimburse the States their costs which they paid for providing 
medications to those who did not receive the benefits to which they 
were entitled. It does this by a simple mechanism: an adjustment in the 
``claw back'' payments which States make as their contribution for 
their dual eligibles. Accordingly, CMS is authorized to collect those 
funds from those who were obligated to serve our beneficiaries--the 
drug plans and managed care plans which deliver the drug benefit.
  It has been confirmed that CMS does not presently have this 
authority, and it simply is not acceptable to propose that CMS will 
simply help the States collect from the plans. It was CMS which 
approved the plans, and it is CMS which administers Part D. They are in 
the best position to assure plan compliance.
  I look forward to prompt consideration of this legislation, and look 
forward to continuing work with my colleagues to assure that the 
Medicare drug benefit meets the needs of all our beneficiaries, and 
that none of our most vulnerable citizens should suffer from such 
administrative failures as we have seen here.
  I call on my colleagues to join us in assuring our States are justly 
compensated.
  Mrs. FEINSTEIN. Mr. President, I am pleased to join with Senators 
Lautenberg, Snowe, Schumer, Coleman and many others to introduce 
legislation to reimburse States for prescription drug expenses they 
have incurred for their residents who are dually eligible for Medicare 
and Medicaid. States have had no other option but to step in and ensure 
seniors can still get their drugs because the implementation of the new 
Medicare drug benefit has been so poorly handled by the Bush 
administration.
  The faulty implementation of the new drug benefit has caused a major

[[Page S25]]

health emergency in California and States across the country, 
particularly for seniors with chronic and debilitating diseases who 
rely on multiple medications every day to keep them alive.
  It is incomprehensible to me that with all the money and time given 
to the Centers for Medicare and Medicaid Services, CMS, to implement 
this new drug benefit, stories emerge every day of seniors and disabled 
individuals being hospitalized because they are being told they have to 
pay hundreds of dollars for their medications which they cannot afford 
and thus don't take.
  Because of severe glitches in the database run by CMS, these 
individuals are leaving pharmacies without their medications or are 
making undue sacrifices to pay for costs they should not have incurred 
in the first place.
  So far, more than 24 States and the District of Columbia have stepped 
in to say they will cover the cost of prescription drugs for their 
residents who are dually eligible for Medicare and Medicaid and who 
cannot access lifesaving and life sustaining drugs as a result of 
Federal incompetence.
  Earlier this week, the Governor of California and California's State 
legislative leaders announced a plan to make $150 million available for 
30 days to cover drug costs for dual eligible individuals who have 
fallen through the system. In California, these individuals account for 
more than 1 million of the State's 4 million total Medicare recipients.
  Problems with the Bush administration's implementation of the drug 
benefit have cost California $5.5 million to fill 63,000 prescriptions, 
as of January 18. I have no doubt these costs are just the beginning.
  Unless these significant implementation errors are fixed immediately, 
the new drug benefit amounts to a massive unfunded mandate. The Bush 
administration must reimburse States, in full, for the drug costs they 
have absorbed as a result of major implementation errors that occurred 
on their watch.
  The legislation I am introducing today with Senators Lautenberg, 
Snowe, Schumer and Coleman will ensure that States are repaid in full 
by the Federal Government for all costs associated with prescription 
drugs for dual eligible individuals. The States did not create the 
crisis felt by our Nation's poorest and most vulnerable seniors and 
disabled and the States should not be responsible for costs associated 
with a Federal program that was intended to provide these individuals 
with comprehensive prescription drug coverage at little or no cost.
  It is simply unacceptable for the Bush administration to tell States 
and the Congress not to worry because the private health insurance 
plans will reimburse States for the costs they've incurred. States 
should not be made to wait to be reimbursed because of implementation 
foul-ups caused by CMS.
  I urge my colleagues to support this legislation.
                                 ______