PALLONE, NJ LAWMAKERS CALL ON FEDERAL GOVERNMENT TO REIMBURSE STATE FOR MEDICARE PRESCRIPTIONS

Trenton, NJ -- U.S. Rep. Frank Pallone, Jr. (D-NJ) today announced legislation that he will introduce in the House next week requiring the federal government to reimburse the State of New Jersey the millions of dollars it is now spending to ensure Medicare beneficiaries receive the prescription drugs they were promised by the Bush administration.

The New Jersey congressman was joined at a Statehouse press conference by U.S. Sens. Frank Lautenberg (D-NJ) and Robert Menendez (D-NJ), Gov. Jon Corzine (D-NJ) and New Jersey seniors who have faced problems receiving their prescription drugs through the new plan. Pallone's legislation is identical to bipartisan legislation Lautenberg introduced in the Senate last week.

Since the new Medicare prescription drug benefit plan took effect on January 1, 2006, many beneficiaries, especially those eligible for both Medicare and Medicaid, have been unable to access their life-saving medications. To address this crisis, many states, including New Jersey, stepped in to help those who experienced problems. New Jersey has already spent nearly $17 million (approximately $1 million per day) to fill this unanticipated gap in coverage.

"This responsibility should never have fallen upon the states, especially considering the repeated assurances we received from the Bush Administration and private plans that they had programs in place to ensure a smooth transition," Pallone said. "It is only fair that New Jersey and other states are repaid the money they spent to offset the problems caused by this failed implementation. Accordingly, I will join my colleague - Senator Lautenberg - in introducing legislation that will reimburse states for the cost they have incurred, plus interest."

Prior to the implementation of the prescription plans, the Centers for Medicare and Medicaid Services (CMS) - whose responsibility it was to implement the new benefit - assured members of Congress and state officials that they had taken all the necessary steps "to ensure continuity of prescription drug coverage and care. Specifically, CMS required each Medicare prescription drug plan to establish an appropriate transition process for all new enrollees.

"As we ensure states are made whole, we also need to begin investigating why the system broke down," Pallone continued. "The Bush administration should bare most of the blame because they had the primary responsibility to ensure a seamless transition while implementing the new program. However it is also clear that the private prescription drug plans, which CMS contracted with to provide prescription drug coverage, should shoulder some of the responsibility for the failures."

Last week, Pallone sent a letter to the 19 insurance companies that offer prescription drug plans in New Jersey, requesting specific information on the role they played in the implementation of the new benefit and what went wrong.

Two years ago Pallone opposed the Republican prescription drug law because it did not provide a defined benefit to seniors within the Medicare system. He instead supported legislation that would create a drug plan provided directly by Medicare rather than private insurance companies and allow the Secretary of Health and Human Services to negotiate lower prescription drug prices for Medicare beneficiaries.

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