Published Online: Sunday, January 1, 2006

The Government Accountability Office (GAO), a nonpartisan arm of Congress, recently uncovered serious, rampant problems in a government program that issued drug cards to Medicare beneficiaries. The cards were issued by insurance companies and pharmacy benefit managers (PBMs). The sponsors had contracts with the federal government, which approved their cards and regulated their operations.

The GAO's report highlighted the following issues:

  • Information about discount cards, posted on a government Web site and sent to beneficiaries, was inaccurate
  • Insurance companies and PBMs violated federal rules by sending out incomplete, erroneous information about their own Medicare-approved discount cards
  • Sponsors of 5 drug cards permitted beneficiaries to receive funding that exceeded the statutory maximum of $600 a year
  • Enrollment was lower than expected due to "confusion and misperceptions about the drug cards among Medicare beneficiaries"

In defense of the discount card program, Mark B. McClellan,MD, PhD, administrator of the Centers for Medicare and Medicaid Services, said that the problems have been addressed and "most submissions are now accurate."

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