Health insurers offering Medicare drug plans must provide beneficiaries with an additional 60-day emergency supply of medication, an extension that increases the emergency supply requirement under the Medicare prescription drug benefit to a total of 90 days, the Bush administration said on Wednesday, the AP/Long Island Newsday reports (Freking, AP/Long Island Newsday, 2/2). Last month, the administration instructed insurers to provide beneficiaries with a 30-day emergency supply of any drugs they were taking before the Medicare prescription drug benefit began Jan. 1 (Kaiser Daily Health Policy Report, 1/19). The 30-day transitional coverage is required under the 2003 Medicare law. In a news release, HHS said the 60-day extension will allow beneficiaries more time to consider switching to less costly alternatives to their current medications.

Progress Report
HHS Secretary Mike Leavitt announced the extension as part of a preview of a progress report on the first month of the Medicare drug benefit. CMS Administrator Mark McClellan will present the report to the Senate Special Committee on Aging on Thursday (Carey, CQ HealthBeat, 2/1). According to Leavitt, competition among private plans has led to lower costs under the new benefit (AP/Long Island Newsday, 2/2). The report states that the federal government will spend about 20% less per beneficiary in 2006 than previously estimated, and over the next five years, payments likely will be at least 10% lower than first estimated. Leavitt said that projected enrollment in the benefit "has not changed significantly." He also noted that although the drug benefit "has worked for the vast majority of participants, the first trip to the pharmacy has been frustrating for some, particularly for certain people with Medicare and Medicaid," he said in a statement. He added, "We make no excuses. These are our problems to solve and this report shows that we are making progress." Leavitt said wait times for pharmacists and beneficiaries calling the Medicare help line have been "unacceptable," adding that steps will be taken to reduce the delays. In addition, he said that most drug plans have worked to address wait times for their phone lines and that HHS will monitor the situation and take action if wait times for drug plans' phone lines do not improve (CQ HealthBeat, 2/1).

Lawsuit
In related news, California, Kentucky, New Jersey, Missouri and Texas plan to file a lawsuit against the federal government that would seek to block CMS from billing states for the cost of prescription drugs for dual eligibles, the Los Angeles Times reports (Halper, Los Angeles Times, 2/2). Under the "clawback" provision of the drug benefit, Medicare will assume the prescription drug costs for dual eligibles, but states will have to pay the federal government as much as 90% of the estimated amount that they would have spent on Medicaid coverage for medications for dual eligibles; the rate will decrease to 75% over time (Kaiser Daily Health Policy Report, 1/20). However, the states seeking to file the suit allege the federal government is overbilling them for the costs because of flaws in the formula for calculating the payments, according to the Times. California Attorney General Bill Lockyer said the states will appeal directly to the U.S. Supreme Court to attempt to block the payments. Lockyer, who announced the plan in a letter to lawmakers, said the states plan to file the suit later this month. According to the Times, at least 15 governors have said their states will spend more under the Medicare drug benefit through fiscal year 2006-2007 than they would have spent if they had continued providing prescription drug coverage to dual eligibles through Medicaid. In California, state officials estimate that by the middle of 2007, they will have spent $161 million more on providing prescription drug coverage under the drug benefit than they would have spent under the previous system.

Comments
California Gov. Arnold Schwarzenegger (R), who has endorsed the lawsuit, said, "Our state is poised to take action to ensure California does not pay more than its fair share." State Controller Steve Westly said California would not pay the bill from the federal government when it arrives in February. Westly spokesperson Yusef Robb said, "The controller is not going to cut this check," adding, "California is going to lead where Washington fails. We think changes need to be made." CMS spokesperson Gary Karr said, "Over the long haul, we believe the states will save money." Karr said states' calculations of losses do not take into consideration the assistance that the federal government is providing for the costs of prescription drugs for state employees (Los Angeles Times, 2/2).