State Orders Help for Elderly as Medicare Glitches Spread

California officials ordered emergency action Thursday to cover drug costs for 1 million elderly citizens, many of whom have been denied life-saving medications or charged exorbitant amounts because of glitches in the new federal prescription drug program.

The action by Gov. Arnold Schwarzenegger’s administration capped a day in which the Medicare prescription drug program -- one of President Bush’s signature domestic policy initiatives -- came under sharp criticism from members of Congress and governors of both major political parties.

Critics said the program, which Bush has touted as the most significant advance in Medicare in 40 years, was fast becoming a public health emergency. California officials said that as many as one-fifth of the 1 million elderly, poor or disabled state residents who were switched into the federal program on Jan. 1 could be wrongly denied their medications because of flaws in the program.

In Illinois, Gov. Rod Blagojevich, a Democrat, took action similar to Schwarzenegger’s, ordering state funds to be used to provide emergency drug coverage for the elderly. Arkansas Gov. Mike Huckabee, a leading figure among Republican governors on health policy issues, took a similar step Wednesday. Nine states, including California, have stepped in to fill the gaps in the federal program.

Bush has staked considerable political capital on the Medicare program, and Democrats were quick to seize on its problems. Sen. Hillary Rodham Clinton (D-N.Y.) criticized the program at a news conference as “a bad policy poorly implemented.”

“It’s a double whammy,” Clinton said.

Medicare officials in Washington said they were dismayed by the problems and were working around the clock to resolve them. The program is working for most people, said Medicare spokesman Gary Karr, adding that up to 40,000 prescriptions an hour are being successfully dispensed during peak times.

“Many states are reporting they really don’t have any problems,” Karr said. “Most of the pharmacies seem to be reporting to us that things were easier this week than last week.”

The problems with the Medicare drug benefit do not yet seem serious enough to lead to an immediate repeal effort.

But the spectacle of governors bailing out Washington, poor people unable to get their medications and pharmacists angry over not getting paid could damage the Bush administration’s credibility on healthcare -- an important election-year issue that the White House wants to showcase in President Bush’s State of the Union speech, which is scheduled for Jan. 31.

James Firman, president of the National Council on the Aging and a supporter of the program, said that continued problems could cause deep trouble for the entire program.

“Right now the pressure isn’t to repeal it, but to get it right,” he said. “I think everybody underestimated the complexity involved. If these problems don’t get fixed in four to six weeks, it’s going to be very serious.”

The root of the current problems is a provision of the Medicare prescription drug law that automatically switched about 6 million elderly, low-income and disabled people into the new program Jan. 1.

Those people had previously been covered by Medicaid -- Medi-Cal in California -- the joint state-federal healthcare program for the poor.

Moving that many people into the new program, all at one time, appears to have overwhelmed the complicated Medicare drug benefit system.

In designing the program, the Bush administration did not want the Medicare drug benefit to be administered directly by the federal government.

Instead, it devised a public program run by hundreds of competing private drug plans, each with its own prices and coverage policies.

In many cases, pharmacists and patient-advocates say, elderly people are being denied benefits because of inaccurate or outdated information in computer databases used by the government and the individual health plans to interact with pharmacies.

In some cases, there is no information on a beneficiary, or the computer says the beneficiary is ineligible for coverage. In other cases, cost-sharing information is wrong, and pharmacists are being told to charge beneficiaries hundreds of dollars when in fact they have co-payments of only $1 to $5.

“We’ve been inundated with calls about this, so we’re thrilled” by the state’s action, said Sandy Risdon, program manager of the Center for Health Care Rights in Los Angeles, an advocacy organization for Medicare beneficiaries.

Staff attorney Deepti Sethi said the center had received as many as 40 emergency calls a day from patients who were told that they could not get their prescription drugs or were asked to pay unaffordable amounts.

“People are walking out without their medicine across the board -- high-blood-pressure medicine, insulin, pain medication,” she said, adding that the problems were putting people at risk for stroke and other health problems. “This is the most vulnerable population.”

Kim Belshe, secretary of California’s Health and Human Services Agency, said at a news conference announcing the state’s plan that the Bush administration’s implementation of the Medicare plan has been “troubling.”

“These individuals are some of the most vulnerable Californians,” Belshe said. “Because of the problems our residents are having accessing their prescription coverage, Gov. Schwarzenegger has decided to step up and provide temporary coverage.”

Under the plan, the state will use its own money to essentially continue the coverage that patients had under Medi-Cal before Jan. 1. Providing the coverage will cost the state as much as $70 million over the next two weeks.

State officials here and elsewhere said they would ask Congress and the Bush administration for reimbursement.

In a statement, Schwarzenegger said he would use emergency powers to cover the costs for five days and seek immediate legislation to ensure coverage for a total of 15 days.

Californians would be reimbursed for any out-of-pocket expenses that have exceeded their $1 to $5 co-payment, officials said. They encouraged those who had been denied medications to return to their pharmacies to try again and see whether the Medicare system can now accommodate their requests. If not, the state, as the “payer of last resort,” would cover the cost, officials said.

According to the Health and Human Services Agency, pharmacies should provide prescription drugs to anyone who was covered by Medi-Cal before Jan. 1. If reimbursement is denied by the new Medicare system, the pharmacy should seek reimbursement from the state.

Schwarzenegger, in a prepared statement, said: “While I am confident the federal government will resolve the problems with this transition, these people need our help now, and we’re going to be there for them.”

The Democratic leaders of the Assembly and Senate said Thursday that they would cooperate in the effort but expressed skepticism that the Bush administration would resolve the program’s problems as quickly as Schwarzenegger hoped.

“I don’t have a lot of faith in the Bush administration’s promises that this will be fixed anytime soon,” said Assembly Speaker Fabian Nunez (D-Los Angeles). “It says a lot when there’s such bipartisan outrage at the feds’ inability to implement a program that’s so vital to so many.”

Administration officials said they would examine the situation at month’s end. If the federal government has not improved service, the state would consider whether it should stop providing emergency help, said a spokeswoman for the state Health and Human Services Agency.

Healthcare advocates in California praised Schwarzenegger for stepping in to provide assistance, but questioned why it took nearly two weeks for the governor to act.

“We knew this train wreck was going to happen,” said Angela Gilliard, a lobbyist for the Western Center on Law and Poverty in Sacramento. “We’ve been saying there was no way when they flipped the switch on Jan. 1, people wouldn’t be harmed. No way. We’re glad the state acted now.”

Dr. Jack Lewin, chief executive of the California Medical Assn., said Schwarzenegger had “saved thousands of lives.”

“This may be the single most important healthcare action he has taken as governor for the nearly 1 million of the neediest patients in California,” Lewin said.

With Congress still away on its holiday recess, reaction in Washington to the program’s problems has been muted.

But Sen. Max Baucus (D-Mont.) wrote Health and Human Services Secretary Michael Leavitt on Friday to express disappointment with the transition for low-income seniors.

“Switching drug benefits from 50 state-based Medicaid programs to dozens of Medicare prescription drug plans would be complicated under any circumstance,” wrote Baucus, who voted in favor of creating the benefit in 2003.

“But this task is particularly challenging since these individuals are among the sickest and most vulnerable of all Medicare beneficiaries. Yet despite the awareness of potential problems, [Medicare] has failed to adequately protect these beneficiaries.”

Times staff writer Teresa Watanabe contributed to this report.