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Medicare finalizes prescription drug rule

Ambulatory Surgery Reimbursement Update, January 25, 2005

The elderly may be able to save money and gain access to more prescriptions, thanks to Medicare rules issued on Friday, January 21.

The Centers for Medicare & Medicaid Service's (CMS) new regulations allow all Medicare beneficiaries to sign up for drug coverage through a prescription plan. The regulations also detail subsidies for employers maintaining benefits for retirees.

The regulations include the following, according to CMS:

- Creating the first prescription drug benefit for beneficiaries in fee-for-service Medicare. Medicare Advantage plans will continue to offer prescription drug coverage to enrollees and enhance their existing coverage.

- Helping to ensure that retirees who currently receive health and drug coverage from their former employers or unions will continue to be able to do so.

- Improving the Medicare Advantage program and for the first time offer a regional preferred provider organization (PPO) contracting option.

- Offering two new less costly options for Medigap coverage.

The new plans will initially save the elderly 15 percent on drug costs and about 23 percent in five years.

While the Medicare-approved drug discount card offered since last June remains active throughout 2005, the new regulations begin the shift from providing discounts and temporary assistance alone to providing broad-based drug coverage in 2006. Enrollment for the new drug plans will begin this November and the benefit begins January 2006.

For more information on the prescription drug plan and Medicare Advantage program, click here.

To read a statement from McClellan regarding the new system, click here.

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