Final regs made for Medicare Rx program

March 1, 2005

Washington — The federal government has taken a major step toward implementing the new Medicare prescription drug program provided under the Medicare Modernization Act of 2003 (MMA) with the finalization of regulations to implement the new provisions.

In addition, the Centers for Medicare and Medicaid Services (CMS) proposed new regulations in late January to support electronic prescriptions for Medicare when the drug plan takes effect next January. As part of the MMA, Medicare will require participating drug plans to support electronic prescribing, but it will be voluntary for physicians and pharmacies.

While the electronic prescribing system can be expected to affect dermatologists and most other physicians participating in Medicare, another provision of the new Medicare law may also generate increased visits from Medicare beneficiaries. For the first time, Medicare now covers a one-time "Welcome to Medicare" physical exam, as well as cardiovascular and diabetes screening. That benefit took effect January 1, 2005.

Available to all The Medicare-approved drug discount card program remains active through 2005, explains CMS Administrator Mark B. McClellan, M.D., Ph.D. Under the new program that takes effect next January, the new prescription drug benefit will be available to everyone who is in Medicare, regardless of their income, whether they are in a fee-for-service or managed care Medicare Advantage plan, or how they currently obtain their drug coverage.

According to CMS, the new rules ensure that the drug benefit will:

Under the rules, employers whose coverage is at least as good as or better than the Medicare benefit and whose contribution to coverage is as good as or better than the Medicare subsidy can receive a tax-free subsidy for continuing that coverage. In addition, they are intended to help employers supplement or "wrap around" the Medicare drug benefit so comprehensive coverage can be provided at a lower cost.

Comprehensive coverage CMS says employers can also use their own customized prescription drug plan or Medicare Advantage plan to provide comprehensive coverage. For retirees in plans with little or no employer contribution, the new benefit allows them to lower drug costs because of the 75 percent subsidy it provides. Employers can provide assistance in this case as well by paying the Part B premium or supporting an account-based arrangement to provide tax-free payments for health costs.