By Darla Martin Tucker, The Business Press, San Bernardino, Calif.

Feb. 20--Since convoluted Medicare drug benefit laws took effect in January, local privately-owned pharmacies have been mired in red tape and fear they're losing money.

Druggists at Beeman's Highland Pharmacy and its sister operation, Beeman's Prescription Pharmacy, both in San Bernardino, wrote more than 2,000 fewer prescriptions during January.

Owner Robert Beeman attributed up to 75 percent of that loss to dramatic changes wrought by the new Medicare Part D benefit that provides federal subsidies for prescription drugs to Medicare beneficiaries through private insurance plans.

Some of Beeman's low-income Medicare clients were automatically switched from state-federal Medi-Cal, which had paid for all their drugs, to the new Part D program, which requires small co-payments. Some could not afford their medications, he said.

Other Part D enrollees went elsewhere for their medicines after discovering their new Sierra Rx and Humana Medicare Part D insurance plans were omitted from the list of 11 insurance companies accepted at the Beeman's stores. Beeman's accepts Blue Cross, Health Net, Aetna, PacifiCare, AARP, WellCare Health Plans, Coventry, Community Care, Prescription Pathway, UniCare, United Health Care and Cigna.

Sierra Rx and Humana insurance pay reimbursements that are too low for the Beeman's stores to cover costs, Beeman said. He can afford to refuse the low-paying insurers because his stores sell medicines primarily for children covered under Medi-Cal and other programs, and for the mentally ill.

The Part D prescription drug coverage portion of the Medicare Prescription Drug Benefit, Improvement and Modernization Act of 2003 took effect Jan. 1, promoted by President Bush, and provides discounts on drugs for seniors and the disabled.

As of Jan. 13, Part D plans covered 24 million out of 43 million Medicare beneficiaries , according to information from the Henry J. Kaiser Family Foundation in Menlo Park. The U.S. Department of Health and Human Services predicted that 39.1 million beneficiaries will havein Part D coverage this year, the foundation said.

"It wasn't very organized," Beeman said. "In typical Bush fashion, they just kind of implemented it in a rush."

Medicare and Medi-Cal patients provide about one-fifth of the revenue at Beeman's Prescription Pharmacy and about a third of the revenue at Beeman's Highland Pharmacy. Beeman will not know the financial impacts of the Medicare changes until March, he said.

Brand name drugs carry about the same reimbursement through the Part D plans, but reimbursements for generic drugs through the plans are lower than through Medi-Cal, Beeman said.

Pharmacy workers have spent hours on the telephone with insurance companies and Medicare, striving to determine which drugs the government will subsidize and in which plans patients need to enroll.

"A lot of times we've gotten disconnected or the people wouldn't have the answers," Beeman said.

The Web site for the U.S. Centers for Medicare & Medicaid Services provides a database of drugs covered under the Part D plans, but not all plans cover all drugs and the information on the site was often inaccurate, Beeman said.

Previously, Medicare recipients over age 65, whose hospital and doctor bills are subsidized by the federal government, paid cash for their medications or joined Medicare-contracted health maintenance organizations like Secure Horizons that covered prescription drugs separately.

Some seniors who previously had their prescriptions supplied by Medi-Cal , were automatically enrolled in the Medicare Part D program and must pay co-payments for their medicines.

"A lot of my patients make less than $1,000 a month. A lot of people are having to make choices between food and drugs," Beeman said. "G.W. has given the middle-class help, but not the poor."

"I've had people stare me in the face and say, 'I don't have the money'," said Rocco Massimiano, a pharmacist and part owner of Redlands Pharmacy.

Some so-called "dual eligible" patients who are covered by both Medi-Cal and Medicare have been unable to afford co-payments for multiple drugs that were once free. They frequently have no knowledge about which insurance plan they have been assigned. Pharmacists entering patient ZIP codes and social security numbers have sometimes discovered the customer was not listed with any plan, Massimiano said.

Calls to insurers resulted in long waits on hold. Their calls were often disconnected, Massimiano said.

"Either the patient went without, or the pharmacy lent out medications," he said.

Approximately 10 percent to 15 percent of customers at Redlands Pharmacy are dual eligibles and another 25 percent to 30 percent are Medicare recipients, many of whom were automatically enrolled in Part D plans, he said. "It's been a trying experience."

Reimbursements for dual eligible clients through Part D plans are $8 to $10 lower for each prescription, Massimiano said. He was uncertain how much money the store has lost. "We're still evaluating it, but we're getting real scared on what it means to our bottom line," he said.

"At the first of the year it was real bad," said Tom Battaile, owner of Palm Drug and Medical Supplies in Highland. Between 20 percent and 25 percent of the pharmacy's revenue stems from sales to Medicare and Medi-Cal/Medicare dual eligible recipients.

"The majority of these people don't know they were put on a different plan," he said.

California Medicare recipients sign up with a participating insurance company for "stand-alone" prescription drug coverage for as little as $5.41 a month and add it to Medicare subsidies that pay for hospital stays and doctor visits. Or they can enroll in Medicare Advantage plans through health maintenance organizations and preferred provider organizations that cover prescriptions and medical treatments. The advantage plans offer varieties of drug coverage options including coverage for generic drugs and for brand-name medications through breaks in Medicare coverage between annual spending limits, according to a release from the U.S. Center for Medicare & Medicaid Services in Baltimore.

Medicare regulations require health plans to pay on average 75 percent of drug costs after a $250 deductible, up to $2,250 in annual drug spending.

The plans are required to pay approximately 95 percent after $3,600 is paid in out-of-pocket costs, center officials said.

Medicare Part D is funded through general revenues, beneficiary premiums and state payments, the Kaiser foundation said.

The Henry J. Kaiser foundation pegs the average monthly beneficiary premium this year at $32.20, although premiums vary across plans, the organization said in a September report.

The foundation estimates the average monthly premium for the prescription rug benefit will rise to $64.26 by 2014.

The new law is the first comprehensive prescription drug benefit offered by the federal Medicare program in its 41-year history.

The net federal cost is projected to be $37.4 billion this year.

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Copyright (c) 2006, The Business Press, San Bernardino, Calif.

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