Medicare demonstration project previews drug benefit

The program comes at a time when some experts are still raising questions about how much savings seniors can expect from the reform effort.

By Joel B. Finkelstein, AMNews staff. July 19, 2004.

Washington -- As many as 50,000 patients will get a sneak peak at the Medicare prescription drug benefit, which does not officially start until 2006.

Over the next couple of months, physicians may find themselves in the position of helping patients navigate the demonstration project, which will provide coverage for self-administered drugs that replace medications previously administered in doctors' offices. Normally, Medicare Part B covers drugs only when administered by physicians.

The project, mandated by last year's Medicare reform law, requires the Centers for Medicare & Medicaid Services to spend 40% of the $500 million in funding on cancer-fighting drugs and the rest on medications for other serious chronic conditions, such as osteoporosis, rheumatoid arthritis, multiple sclerosis, pulmonary hypertension and hepatitis C. Patients who don't already have prescription coverage will be eligible to participate in the demonstration project.

"Many beneficiaries will get literally tens of thousands of dollars worth of help in purchasing these critical medicines right away," said CMS Administrator Mark McClellan, MD, PhD.

For example, the agency estimates that a patient with multiple sclerosis could save $12,260 a year for medicines that normally cost more than $16,298 annually.

But CMS officials also estimate that for every patient who gets into the Medicare drug program, nine potentially eligible patients will not. Because of this, participation will be determined by a lottery of eligible applicants.