Medicare Part D - Premium Problems Continue

The Centers for Medicare & Medicaid Services (CMS) recently announced that it was taking action regarding a number of problems experienced by beneficiaries who requested that 2006 Part D premiums be withheld from their Social Security checks. Some beneficiaries have never had premiums withheld from their Social Security checks as they requested, while others have had premiums withheld inappropriately. CMS mailed letters to beneficiaries on January 26, 2006 advising them that premium amounts may be recouped from their Social Security checks in February.

The letters are confusing and will likely result in financial hardships to beneficiaries as a result of erroneous payments. Moreover, beneficiary advocates were not given an opportunity to provide input as to the design and content of the letters, nor were they given advance notice of the letters in order to prepare to respond to beneficiary questions and concerns following the receipt of the letters.

The number of beneficiaries who received a letter and whose Social Security checks may be affected is unclear. An e-mail dated January 25, 2007, from CMS to CMS Region IX stakeholders, indicates that a year-end reconciliation process with the Social Security Administration (SSA) found about 200,000 beneficiaries nationwide whose premiums were not collected properly. The e-mail states that 120,000 of the 200,000 beneficiaries will be receiving explanatory letters. According to additional information sent by CMS, the largest concentrations of affected beneficiaries reside in Texas, Florida and Pennsylvania.

Beneficiaries who have experienced premium problems may be getting one of three letters, depending on their problem. They also may receive a reduced Social Security check in February.

Unfortunately, the CMS letters do not give beneficiaries all of the information they need. They fail to tell beneficiaries:

According to the January 25 e-mail, CMS will engage in a reconciliation process for the approximately 80,000 beneficiaries who experienced premium-withhold issues but who did not receive a letter. This process will be conducted “eventually” and will address “the appropriate payments, including government subsidies and beneficiary premiums, which should be made.” The process will also be used “to determine the appropriate method for recouping beneficiary premiums and issuing refunds if necessary.”

What Beneficiaries Should Do

Check their records to make sure that they do, in fact, owe Part D premiums for all or a part of 2006;
Verify that any amount withheld from their Social Security check is the correct amount;
Verify that any amount refunded to them is the correct amount;
Have the correct amount they believe they owe in premiums available if and when they contact their drug plan;
Request a payment schedule from the drug plan if they believe they owe their drug plan 2006 premiums and are able to repay the premium amounts;
If the payment of the premium(s) not previously withheld might cause a hardship, request a waiver of the repayment requirement.
Keep records of all written correspondence, phone calls, emails or other contact they have with their drug plan, CMS, or SSA regarding this money.

Conclusion

The Center for Medicare Advocacy continues to hear from beneficiaries who experience problems with their Part D premiums. Some have been told that they owe premiums that were not withheld from their Social Security checks, when in fact they have paid the plan directly. Others dispute the amount of premium that is owed. In some situations premiums that were withheld from Social Security checks may not have been sent to the Part D plan, so the drug plan is requesting payment from the beneficiary. In at least one situation a beneficiary received a separate letter from SSA about the amount of money owed and the amount to be withheld in February, although the letter did not break out the amounts owed for the separate months of 2006 or 2007.

Beneficiaries, their family members and their advocates who receive one of these letters, or who have Part D premium problems but who have not received a letter, may contact Vicki Gottlich in the Center for Medicare Advocacy’s Washington, DC office, at (202) 293-5760 or vgottlich@medicareadvocacy.org.

[1] Although CMS does not in fact recognize the right to waiver of recovery for mistaken payments arising from premium withholding in Part D, the issue is presently pending before the Court of Appeals for the District of Columbia Circuit, which heard oral argument in Action Alliance v. Leavitt, No. 06-5295 on January 18, 2007.