U.S. Warns Against Medicare Kickbacks

Monday, April 12th 2004, 12:00 am

By: News On 6

WASHINGTON (AP) _ Sponsors of Medicare drug discount cards who pay pharmacists to attract customers to their cards could violate federal fraud and abuse laws, health inspectors warned Friday.

With just a few weeks to educate and enroll older Americans in the Medicare drug cards program, some of the 28 companies offering the cards are considering payments to pharmacies for enrollment help and other activities.

For many Medicare clients, pharmacies are a natural place to seek information about the promised drug cards, which were part of the new Medicare law that President Bush signed in December.

New guidance from the Health and Human Services inspector general said, however, that the companies must ``ensure that payments are not being made improperly to influence pharmacies (directly or through their employees) to direct patients to a particular drug card.''

The inspector general said such payments and other financial incentives might limit the flow of information to people and could run afoul of a criminal anti-kickback statute.

``In at least one circumstance, a drug card sponsor proposes paying pharmacies a fixed fee for every completed enrollment application submitted to the drug card sponsor,'' the three-page guidance said.

Some drug card sponsors asked the government whether the practice was acceptable.

Enrollment starts May 3, and the cards can be used beginning June 1.

Medicare clients sign up for the drug discount cards with a private provider, not Medicare. Card providers can charge an annual enrollment fee up to $30. The fee is waived for those who qualify for low-income assistance.

Companies participating in the discount card program must offer drugs in 209 categories and offer three choices in each category. Officials said generic drugs will be offered where available.

To enroll in a drug discount program, Medicare beneficiaries will be asked to choose a prescription drug card and submit basic information to the sponsor about the drugs they take and their proximity to a pharmacies. Medicare will verify each applicant's eligibility.

Medicare beneficiaries can enroll in only one approved card. Except in special circumstances, seniors can switch to a different card only once during an open enrollment period between Nov. 15 and Dec. 31.

Medicare officials have created a Web site that will allow prospective users to compare prices offered by the different cards and pharmacies affiliated with each card. The same information will be available by calling 1-800-Medicare.

Pharmacies can expect to be inundated with questions because of the volume of information available by telephone or the Internet, said pharmacists, advocates for the elderly, consumer groups and researchers.