Bush Administration Settles Nationwide Class Action in Medicare Prescription Drug Case



Federal Agency Agrees to Additional Protections for Poor Beneficiaries SAN FRANCISCO, June 19

SAN FRANCISCO, June 19 /PRNewswire/ -- Pursuant to a settlement agreement
filed in federal court today in the Medicare Part D class action lawsuit Situ
v. Leavitt, the Bush administration has agreed to make significant changes to
its administration of the prescription drug benefit for low-income
beneficiaries. If approved by the judge, the agreement will make it easier
for seniors and individuals with disabilities to access the full benefits of
the Medicare Part D program and the Low Income Subsidy.

The case was filed against Michael Leavitt, Secretary of the Department of
Health and Human Services, by the National Senior Citizens Law Center and the
Center for Medicare Advocacy in April 2006 and was certified as a nationwide
class action in January 2007. Pro bono counsel from the law firm of Wilson
Sonsini Goodrich & Rosati later joined the plaintiff team. Plaintiffs argued
that the Bush Administration failed to provide sufficient protections for low-
income senior citizens and persons with disabilities in developing the
Medicare Part D enrollment and low income subsidy deeming system.

The case was brought on behalf of 6.2 million low-income "dual eligible"
Medicare beneficiaries, who also receive Medicaid. Dually eligible
beneficiaries are elderly and/or disabled and very poor. The settlement
addresses chronic problems related to information management in the Medicare
Part D program. Plaintiffs argued that poor management created ongoing
barriers for low-income people struggling to obtain prescription medications.
Dual eligibles rely on an average of ten more prescriptions per month than
other Medicare beneficiaries. These beneficiaries receive a Low-Income Subsidy
(LIS), which entitles them to purchase prescription medication for a nominal
charge, and are automatically enrolled into a Part D plan.

"This settlement agreement is a victory for many of our nation's most
vulnerable citizens," said National Senior Citizens Law Center Staff Attorney
Kevin Prindiville. "These individuals have faced life-threatening delays in
receiving vital medication. They do not have the means to front the costs of
their prescription drugs while Medicare and the plans sort out paperwork. We
view the administration's agreement to this settlement as a sign that it is
now committed to providing adequate protections for these beneficiaries."

The information management system that notifies pharmacies of the
enrollment and low-income status of dual eligibles has been dogged by
extensive delays when enrollees join the system or change drug plans. In
addition to voluntary plan changes, a large proportion of beneficiaries have
been forced to change plans each year due to ongoing shifts in available
coverage. The system is dauntingly complex for beneficiaries and pervasive
flaws have left many in this vulnerable population with gaps in coverage of
essential medication while technical issues are resolved among the Centers for
Medicare and Medicaid Services (CMS, the federal agency responsible for
administering the Medicare program), state governments, pharmacies and drug
plans.

In exchange for the plaintiff's dismissal of their claims against the
Secretary, CMS agreed to make a number of changes that will streamline the
Medicare Part D enrollment process. The agency will:

-- Speed up the enrollment process for new dual eligibles. Instead of
waiting several weeks to process files received from states identifying new
dual eligibles, CMS will process these files within one business day of
receipt. CMS will also allow states to submit these files more frequently.

-- Require plans and CMS Regional Offices to provide additional assistance
to beneficiaries whose names are inadvertently missing from pharmacy or plan
computer systems. New protocols will shift the burden of proof away from
beneficiaries and to providers when eligibility is in question.

-- Educate pharmacy organizations about new policies intended to increase
protections for dual eligibles who are not automatically enrolled in a plan
and, therefore, are unable to obtain medications.



"We're anxious to see CMS successfully implement the changes outlined in
the agreement," said Gill Deford, Director of Litigation at the Center for
Medicare Advocacy. "CMS has taken the first step by agreeing to do more on
behalf of low-income recipients. We look forward to working with agency staff
to ensure that these improvements are integrated into its standard business
practices."

The settlement agreement does not prevent individual class beneficiaries
from filing separate claims for individual benefits. Under the terms of the
agreement, the court will retain jurisdiction over implementation of the
agreement for up to three years, during which time the plaintiffs will monitor
CMS activities to ensure the remedies are fully realized. The agreement must
be approved by the presiding judge in the case, the Honorable Thelton E.
Henderson, in order to take effect.

Wilson Sonsini Goodrich & Rosati joined the plaintiff team in June 2007.
Pro bono counsel from the firm played an integral role in developing the final
settlement agreement.

For further information on Medicare Part D or for a copy of the settlement
agreement, see http://www.nsclc.org or
http://www.medicareadvocacy.org/settlementagreement.pdf. Information about the
pro bono activities of Wilson Sonsini Goodrich & Rosati can be found at
http://www.wsgr.com/probono.


SOURCE National Senior Citizens Law Center