[Congressional Record (Bound Edition), Volume 152 (2006), Part 1]
[Senate]
[Pages 1195-1196]
[From the U.S. Government Publishing Office, www.gpo.gov]




                      RECOGNITION OF TOBEY SCHULE

  Mr. BAUCUS. Mr. President, I rise today to recognize Mr. Tobey 
Schule, of Kalispell, MT, for his valuable testimony today before the 
Senate Finance Committee.
  The Senate Finance Committee played a key role in enacting Medicare 
drug benefits. We must be diligent in overseeing their implementation. 
In 2003, after years of debate, Congress added prescription drug 
coverage to Medicare. I was proud to help pass that law. The law was 
not perfect. But it has the potential to do some good.
  The Medicare drug bill has the potential to make prescription drugs 
available to millions who could not otherwise afford them. It has the 
potential to make drugs available that will lessen pain. It has the 
potential to save lives.
  Unfortunately, the administration has implemented the new law poorly. 
After Congress passed the law, the Centers for Medicare and Medicaid 
Services--CMS--had the duty to ensure that Medicare drug benefits were 
up and running by January 1, 2006. I appreciate CMS's efforts to 
implement the new law. It is a huge task. CMS worked hard. But CMS's 
efforts have come up short, in two major areas.
  First, CMS made the new drug benefit needlessly confusing.
  As part of the new law, Congress passed a temporary drug discount 
card, available in 2004. The card was supposed to give temporary relief 
from high drug costs. Seniors of modest means were eligible for a 
$1,200 Federal subsidy for their drug purchases.
  But most Medicare beneficiaries did not sign up for the drug card. 
Why? They were paralyzed by the choices. CMS approved 40 Medicare drug 
cards in my State of Montana alone. Instead of celebrating their 
choices, most seniors in my State decided not to sign up.
  Less than a year later, CMS was approving drug plans for the new drug 
benefit. I urged CMS not to repeat the mistakes that they made with the 
drug card. I urged CMS to approve only plans meeting the highest 
standards.
  But CMS repeated the mistakes of the drug card. CMS approved dozens 
of plans for participation in the new drug program. CMS approved more 
than 40 drug plans in Montana. I support choice, competition, and the 
free market. It is great that Americans can choose from hundreds of 
different models when buying a new car. But when people don't know what 
they are buying, choice can lead to confusion. That is particularly 
true of health care.
  Ask elderly Americans whether they prefer a four-speed automatic or a 
five-speed manual, and they will probably choose the automatic. Ask 
them whether they prefer a drug plan with a four-tiered formulary to a 
plan with five, and they will probably look at you with a mixture of 
confusion and anger.
  My second concern relates to the warnings that CMS ignored. Last 
year, I asked the independent Government Accountability Office to 
report on CMS's plans for seniors eligible for both Medicaid and 
Medicare. I asked: What were CMS's plans for seniors whose drug 
coverage was moving from Medicaid to Medicare? In December 2005, GAO 
reported that CMS's plans were insufficient to avoid big disruptions in 
coverage.
  CMS disagreed. CMS said: ``[We have] worked diligently on the 
transition from Medicaid to Medicare drug coverage . . . and . . . 
these individuals will get effective, comprehensive prescription drug 
coverage . . . on January 1, 2006.''
  That did not happen. GAO was right. Data systems failed. Pharmacists 
and States were stuck with the bill for co-pays that should never have 
been charged. And some vulnerable seniors left the pharmacy without the 
medicines that they needed.
  Today the Finance Committee heard from Tobey Schule, an independent 
pharmacist from Kalispell, MT. Mr. Schule is one of thousands of 
pharmacists who have been burdened with the failed transition from 
Medicaid to Medicare. I will ask that his testimony from today's 
hearing be submitted in the Congressional Record, next to my remarks.
  Last month, Secretary Leavitt and Doctor McClellan briefed members of 
this committee on problems implementing the new drug program. They 
outlined seven specific problems. And they outlined plans to fix them. 
I appreciate CMS's attempts to fix the problems. But some problems 
remain unsolved. Dr. McClellan, I look forward to hearing how and when 
CMS plans to fix the problems.
  In addition to ensuring that the implementation flaws are fixed, 
Congress should also address the problem of confusion. We can do that 
by learning the lessons of Medigap. In 1980, Congress enacted 
amendments that I offered to fix marketing abuses and consumer 
confusion with Medigap. The reforms required Medigap issuers to meet 
minimum standards and have minimum loss ratios.
  Ten years later, Congress again took up Medigap reform, passing 
legislation to standardize Medigap policies. Ten different Medigap 
options would be offered, each with a basic set of benefits. This gave 
consumers an apples-to-apples comparison of Medigap coverage.
  We should do the same with the new drug program. We should 
standardize the drug plans. We should make it easier for people to make 
good choices about which plan is best for them. I intend to introduce 
legislation to do just that.
  I understand that the drug benefit is young. But I want this benefit 
to work. We simply cannot afford another round of confusion. We need 
broad participation. And that's not going to happen unless we make the 
program more accessible and understandable. I supported enactment of 
the Medicare drug benefit in 2003. I still support it. Health insurance 
needs to cover prescription drugs. But we need to make it work. And I 
look forward to hearing from our witnesses on how we can do so.
  I thank Mr. Schule for taking time from his important work to tell 
the committee about his experiences with the new Medicare drug benefit.
  Mr. President, I ask unanimous consent that Mr. Schule's testimony be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

       Chairman Grassley, Senator Baucus, members of the 
     Committee, I appreciate the privilege and opportunity to 
     speak about Medicare Part D and how it is affecting my 
     patients and pharmacy.
       I am the co-owner of a small independent pharmacy in 
     Kalispell, Montana that was established in 1981. There are 
     about 32,000 people in Kalispell and the surrounding areas; 
     we are 200 miles from the state capitol in Helena. Our 
     pharmacy employs two pharmacists, my son and me, and two 
     pharmacy technicians. There are five senior apartment

[[Page 1196]]

     buildings within three blocks of the pharmacy, and we serve 
     primarily geriatric patients. In addition, we provide weekly 
     medication box exchange for three assisted living facilities 
     and the mental health center in our community. About ninety 
     percent of our walk-in patients are elderly.
       Medicare Part D has become a major factor in my pharmacy. I 
     contracted with every company offering drug plans in Montana, 
     so I could continue to serve my patients. I would like to 
     address my concerns with this new benefit, in the following 
     four areas: confusion among patients and pharmacists, 
     education and outreach, coverage of dual-eligibles, and 
     burden on pharmacists.
       The implementation of Part D has caused confusion and 
     frustration for my patients. And it has caused confusion and 
     frustration for me. This program doesn't need to be so 
     complicated.
       The frustration and confusion for my patients began last 
     summer, when they started receiving information from 
     insurance companies offering Medicare Part D coverage. With 
     over 40 plans to choose from in Montana, my patients said 
     they were scared and intimidated by all of the options. Many 
     of my patients were not fortunate enough to have a family 
     member help them through the process of deciding which plan 
     was best for them. I work with the elderly every day, and 
     this has been overwhelming for them. Bewildered by the 
     complexity, some patients are choosing not to enroll.
       Those patients who could make sense of the Medicare 
     mailings faced new obstacles. They were instructed to check 
     the internet to see if the coverage was appropriate for their 
     individual situation. I question this approach, since the 
     vast majority of my elderly patients do not have computers 
     and cannot use the internet. Access to the information 
     through the 1-800 Medicare number was not much better. The 
     phone systems are automated, and many of my elderly patients 
     are unable to navigate through them. Others had the ability 
     to use the phone system but gave up because of long hold 
     times.
       Despite this enormous confusion, there were few 
     opportunities for Kalispell patients and pharmacists to get 
     answers. Several meetings were sponsored by the state of 
     Montana, by insurance companies and by senior citizen 
     advocates to help the elderly make their choices and explain 
     Medicare Part D. After attending these sessions, many 
     patients came back to my pharmacy saying they were even more 
     confused. Patients received different answers from different 
     people. They had trouble understanding the literature that 
     they received, and felt a lawyer was necessary to make heads 
     or tails out of it.
       On top of this complexity, elderly patients feared they 
     would select the wrong plan. At educational events, patients 
     were instructed to focus on the formularies and pick one that 
     had their medications on the list. But patients found only 
     some of their drugs listed on formularies, requiring patients 
     to choose between medications.
       Education for pharmacists wasn't much better. I heard of 
     only one event sponsored by CMS to educate pharmacists, and 
     that was in Billings, nearly 500 miles from my store. I could 
     not attend this meeting, although I did send a pharmacy 
     technician to a local educational event sponsored by an 
     insurance counselor. This seminar did not help us serve our 
     patients enrolling in Part D. But it did help us understand 
     why our patients were so frustrated.
       With little information coming from CMS or the insurance 
     plans, I relied on my drug wholesaler to learn how to handle 
     patient in Part D. For instance, in mid-December I called my 
     software vendor to ask how I would determine patients' Part D 
     drug coverage. It was only through this call that I learned 
     about the E-1 transaction, which shows patient plan 
     eligibility. I now use this system many times a day when 
     trying to figure out a patient's coverage, but I had to learn 
     about it on my own.
       Over the last few weeks, drug plans have been my only 
     source of information describing the administrative 
     procedures that I must follow to provide drugs and submit 
     claims. But this information is often incomplete. I recently 
     received a notice that patients enrolling in Part D in late 
     January wouldn't be in the system on February 1st. So the 
     problems we heard about at the beginning of January are 
     happening again.
       Many of my patients have both Medicaid and Medicare. These 
     ``dual-eligibles'' were automatically enrolled into the new 
     drug plans as their drug coverage was shifted from Medicaid 
     to Medicare. Unfortunately, these plans did not always meet 
     patients' medical needs. I found many patients' medications 
     were not covered by their plans.
       Further complicating matters, information systems did not 
     recognize these patients as dually-eligible. They could not 
     afford the high co-pays that the system said they should be 
     charged. I handled each patient on a case-by-case basis, and 
     it required a huge time commitment to sort out problems in 
     drug plan data and information systems. Fortunately, we are a 
     small pharmacy and we know all of our patients. So we were 
     able to give them their medications on the spot. I cannot 
     help but think of how many patients across the country must 
     have gone without their medications. Now we are working 
     through billing issues, trying to determine how we will be 
     reimbursed.
       I am very concerned for my patients because we are being 
     forced to change their medications to match the formulary for 
     their plan. By changing medication, I expect to see increases 
     in physician visits, labs, and hospitalizations. This will 
     increase costs to the program. Medicare should have a plan to 
     track the costs associated with medication changes.
       Some of the plans are offering the mail-order pharmacy, and 
     I do not think that mail-order should even be an option for 
     Medicare Part D. If patients are getting some medications 
     from mail-order and others from local pharmacies there is no 
     continuity of care. This lack of coordination between mail-
     order and bricks-and-mortar pharmacies increases the 
     likelihood of adverse events and noncompliance. If a patient 
     using mail-order pharmacy is hospitalized, it is very 
     difficult for doctors at the hospital to get drug information 
     when prescriptions are not filled locally. If patients need 
     drug information about a medication and are using mail order, 
     they must attempt to use automated phone systems. In 
     contrast, local pharmacists are readily available to answer 
     questions. The ordering process of mail-order is also 
     difficult for the elderly. These patients have trouble 
     remembering to order a medication before they run out, but if 
     they order too soon the script will not be processed.
       As a pharmacist I want to know how certain medications were 
     picked for the formularies. An example is why is one plan 
     using Zocor and another is using Lipitor. I would like to 
     know why some formularies use a branded drug when a generic 
     is available. This appears costly to the program.
       As the program began on January 1st, it became apparent 
     that the insurance companies were not prepared for the start. 
     Patients had not received their cards or enrollment letters. 
     When this documentation had been received, the information 
     was often incomplete. Missing data included BIN numbers, 
     group numbers, ID numbers and processor control numbers. When 
     I tried to access through the E-1 system, patients would come 
     back as not enrolled. I was not able to bill the appropriate 
     plan.
       We have spent a tremendous amount of time on the phones 
     with the different companies getting patient billing 
     information or prior authorization to fill. We have been on 
     hold to talk to a representative for as long as four hours 
     before we were able to get through. In other cases, we were 
     simply disconnected after hours on the phone. This is 
     unacceptable.
       Drug plans are sending out lists of the pharmacies 
     associated with their plan. While I have contracted with 
     every plan offered in Montana, my pharmacy is not on every 
     company's list. As a result, several of my patients have come 
     in very upset because they think they will have to change 
     pharmacies. I tell my patients that I can fill for them even 
     though I am not on the list. Insurance companies should not 
     send only a partial list of in-network pharmacies. It should 
     be all or nothing. Also, I think that it is totally 
     unacceptable for the drug plans to co-brand patient insurance 
     cards with Wal-Mart, Walgreens, or other chain drug stores. 
     It is confusing to the patient, leading them to think that 
     they can only go to those pharmacies.
       The insurance companies have created problems on the 
     business side of my practice. There is no ``negotiation'' 
     between pharmacists and drug plans on reimbursement rates. If 
     I am going to continue serving my patients, I am forced to 
     accept the low rates offered by insurance companies. Plans 
     are slow to pay claims, and my drug wholesaler requires that 
     I pay for drugs much more quickly than the plans pay me. My 
     pharmacy has over $45,000 in unpaid claims from Medicare Part 
     D.
       Pharmacist and pharmacy technician salaries are climbing 
     because of the shortage of available personnel. I am not sure 
     how long independent pharmacies will be able to stay in 
     business with the low reimbursement rates.
       I wish that before this program started on January 1st that 
     Medicare and the insurance companies would have taken the 
     time to truly consider the elderly. If the people setting up 
     the program had thought about the needs of their own elderly 
     parents, I am sure this plan would be different.
       Chairman Grassley, Senator Baucus and Members of the 
     Committee, thank you again for inviting me to appear before 
     you here today. I will now answer any questions you may have.

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