States will be reimbursed for bailing
out drug plan Bush Administration says

The Bush administration says states will be reimbursed for millions spent to bail out the flailing drug benefit. More than 20 states intervened to cover drug costs for an alarming number of poor seniors and disabled patients who were denied their drugs under Part D plans.

Medicare officials claimed the law did not allow direct reimbursement and advised states to seek payments from individual Part D plans. But growing political pressure prompted Medicare chief Dr. Mark McClellan to announce on Tuesday that his agency would use its influence to ensure private insurers repaid states. In cases where states paid more than health plans would pay, Medicare would make up the difference. McClellan could not estimate how much that would cost but did say the reimbursements would end by February 15, insisting problems should be resolved by then. Democrats were less confident and warned that asking states to process claims with private health plans added an unnecessary administrative burden, particularly when the errors occurred on the federal level. Senator Max Baucus (D-MT) said he is looking for an acceptable timeline for when states will be repaid, otherwise legislation will be necessary.

"For the sake of the tens of thousands of vulnerable seniors and disabled persons who needlessly suffer because of a bungled rollout and bureaucratic nightmare, we hope this crisis is resolved soon," said Ruben Burks, secretary-treasurer of the Alliance for Retired Americans. "The reality is the drug benefit is so poorly conceived and designed this crisis will certainly not be the last.”