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Medicare Won't Repay States for 
Emergency Purchases 


By Tony Pugh, The Mercury News

January 18, 2006

The federal government will not repay states that are making emergency purchases for hundreds of thousands of poor, sick people whose new 
Medicare prescription-drug coverage is not yet working, Medicare officials say.

Instead, those states must recoup the money from the private plans that began providing drug coverage Jan. 1 on behalf of Medicare.

Medicare administrator Mark McClellan said the new Medicare legislation was clear: ``Under this program, we don't have the authority to pay states directly. People are in Medicare drug plans, and it's the Medicare plans that are supposed to pay for the medications.''

That could create an administrative nightmare for states such as California that stepped up to safeguard the health of low-income elderly and disabled people whose Medicare coverage has not materialized because of administrative problems and poor planning by Medicare officials.

``That's going to be very complicated,'' said Arkansas Gov. Mike Huckabee, the chairman of the National Governors Association, who was frustrated and disappointed by the news.

In California on Tuesday, lawmakers said they will pass stopgap legislation this week authorizing the state to pay for medications for those denied coverage by Medicare.

Senate President Pro Tem Don Perata, D-Oakland, predicted the Legislature would have a bill on Gov. Arnold Schwarzenegger's desk by Thursday afternoon allocating $150 million to cover the prescriptions for up to 30 days.

The bill is likely to benefit about 200,000 low-income elderly Californians who are being transferred from Medi-Cal, the state-federal health care program for the poor, to Medicare.

Schwarzenegger said Tuesday that the new federal program had been operating with ``an error rate of 20 percent'' in California.

Since announcing emergency action to help its residents Thursday, 
Schwarzenegger said, California has paid 34,000 drug claims that Medicare was supposed to pay.

Over the weekend, the Bush administration told insurers to provide a temporary supply of any prescription that a person was previously taking, and it said that co-payments for low-income people must not exceed $5 for a covered drug.

The Associated Press and New York Times contributed to this report. 


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