Government warns medicare drug card sponsors

Apr 10 2004

Medicare card sponsors of drug discount cards who pay pharmacists to attract customers to their cards could violate federal fraud and abuse laws, health inspectors warned Friday.

In one instance, a drug card sponsor offered to pay pharmacies a fixed flat rate fee for every completed enrollment application submitted to the drug card sponsor. Other drug card sponsors questionened the government to the legality of this process.

Enrollment to the drug card scheme starts May 3rd, and the cards can be on June 1st. Medicare clients sign up for the drug discount cards with a private provider, not Medicare. Card providers can charge an annual enrollment fee up to $30. The fee is waived for those who qualify for low-income assistance.

Companies participating in the discount card program must offer drugs in 209 categories and offer three choices in each category. Officials said generic drugs will be offered where available. To enroll in a drug discount program, Medicare beneficiaries will be asked to choose a prescription drug card and submit basic information to the sponsor about the drugs they take and their proximity to a pharmacies. Medicare will verify each applicant's eligibility.

Medicare drug card applicants can enroll in only one approved card. Except in special circumstances, seniors can switch to a different card only once during an open enrollment period between Nov 15th and Dec 31st. Medicare officials have created a Web site that will allow prospective users to compare prices offered by the different cards and pharmacies affiliated with each card. The same information will also be available by calling 1-800-Medicare.

Pharmacies are expecting to be inundated with enquiries due to the shear volume of information available by telephone or the Internet, said pharmacists.