This is the accessible text file for GAO report number GAO-06-710 
entitled 'Medicare Part D: Prescription Drug Plan Sponsor Call Center 
Responses Were Prompt, but Not Consistently Accurate and Complete' 
which was released on July 10, 2006. 

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Report to Congressional Requesters: 

United States Government Accountability Office: 

GAO: 

June 2006: 

Medicare Part D: 

Prescription Drug Plan Sponsor Call Center Responses Were Prompt, but 
Not Consistently Accurate and Complete: 

Medicare Prescription Drug Plan Sponsor Call Centers: 

GAO-06-710: 

GAO Highlights: 

Highlights of GAO-06-710, a report to congressional requesters. 

Why GAO Did This Study: 

The Medicare Prescription Drug, Improvement, and Modernization Act of 
2003 (MMA) established a voluntary outpatient prescription drug 
benefit, known as Medicare Part D. Private sponsors have contracted 
with the Centers for Medicare & Medicaid Services (CMS) to provide this 
benefit and are offering over 1,400 stand-alone prescription drug plans 
(PDP). Depending on where they live, beneficiaries typically have a 
choice of 40 to 50 PDPs, which vary in cost and coverage. MMA required 
each PDP sponsor to staff a toll-free call center, which serves as a 
key source of the information that beneficiaries need to make informed 
choices among PDPs. GAO examined (1) whether PDP sponsors provide 
prompt, courteous, and helpful service to Medicare beneficiaries and 
others and (2) the extent to which PDP sponsor call centers provide 
accurate and complete information to Medicare beneficiaries and other 
callers. 

To address these objectives, we made 900 calls to 10 of the largest PDP 
sponsor call centers during March 2006, posing one of five questions 
about their Part D plans during each call. We tracked the amount of 
time it took to reach a customer service representative (CSR), the 
number of calls that did not reach a CSR, and the appropriateness and 
clarity of CSRs’ language. We developed criteria for determining 
accurate and complete responses based on CMS information. 

What GAO Found: 

Call center service was generally prompt and courteous, and many CSRs 
offered helpful suggestions and information. GAO reached a 
representative in less than 1 minute for 46 percent of the calls CSRs 
fielded and in less than 5 minutes for 96 percent of the calls fielded. 
While GAO did not reach CSRs for 4 percent of the calls it placed, 
mainly because of disconnections, GAO found that 98 percent of CSRs 
with whom GAO spoke were easy to understand, polite, and professional. 
In addition, many CSRs provided helpful suggestions related to GAO’s 
questions, such as details about a mail-order option to obtain drugs or 
lower-cost drugs. 

However, CSRs at 10 of the largest PDP sponsor call centers did not 
consistently provide accurate and complete responses to GAO’s five 
questions, which GAO developed using information from CMS and other 
sources. GAO obtained accurate and complete responses to about one-
third of the 864 calls for which GAO reached a CSR. The overall 
accuracy and completeness rate for each call center ranged from 20 to 
60 percent. CSRs were unable to answer 15 percent of the questions 
posed, primarily those related to plan costs. Furthermore, CSRs within 
the same call center sometimes provided inconsistent answers. For 
example, in response to questions about PDP cost comparisons for 
specified sets of drugs, CSRs at 3 call centers told GAO that it was 
against the sponsors’ policies to identify any of their plans as lowest 
cost. However, other CSRs at each of these call centers did not cite 
this policy and did identify a plan as lowest cost. 

Figure: Percentage of 864 Calls With Accurate and Complete, Incomplete, 
or Inaccurate Responses, and Those Where No Answer Was Provided, March 
2006: 

[See PDF for Image] 

Source: GAO. 

[End of Figure] 

In commenting on a draft of this report, CMS criticized the analysis as 
based on inaccurate, incomplete, and subjective methods that limit the 
report’s relevance and validity. GAO maintains that its methods are 
sound and its findings are accurate. CMS officials told GAO at a May 
2006 meeting that CSRs should have been able to accurately answer the 
questions GAO posed. 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-710]. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Leslie G. Aronovitz at 
(312) 220-7600. 

[End of Section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

CSRs Generally Provided Prompt, Courteous, and Helpful Service: 

PDP Sponsor Call Centers Did Not Consistently Provide Callers with 
Accurate and Complete Information: 

Concluding Observations: 

Agency Comments and Our Evaluation: 

Appendix I: Comments from the Centers for Medicare & Medicaid Services: 

Appendix II: GAO Contact and Staff Acknowledgments: 

Table: 

Table 1: Questions, Scenarios, and Criteria Used to Assess Response 
Accuracy and Completeness: 

Figures: 

Figure 1: Percentage of Calls by Wait Time to Reach a CSR, and 
Percentage of Calls Where We Did Not Reach a CSR, March 2006: 

Figure 2: Percentage of Calls with Accurate and Complete, Incomplete, 
or Inaccurate Responses, and Those Where No Answer Was Provided, March 
2006: 

Figure 3: Lowest, Highest, and Average Sponsor Call Center Accuracy and 
Completeness Rate, by Question, March 2006: 

Figure 4: Percentage of Calls with Accurate and Complete, Incomplete, 
or Inaccurate Responses, and Those Where No Answer Was Provided, by 
Question, March 2006: 

Abbreviations: 

CMS: Centers for Medicare & Medicaid Services: 
CSR: customer service representative: 
MMA: Medicare Prescription Drug, Improvement, and Modernization Act of 
2003: 
PDP: prescription drug plan: 

United States Government Accountability Office: 
Washington, DC 20548: 

June 30, 2006: 

Congressional Requesters: 

The Medicare Prescription Drug, Improvement, and Modernization Act of 
2003 (MMA) established a voluntary outpatient prescription drug 
benefit, known as Medicare Part D, beginning January 1, 2006.[Footnote 
1] Seventy-nine sponsors, largely commercial insurers, have contracted 
with the Centers for Medicare & Medicaid Services (CMS)--the agency 
that administers Medicare--to provide this benefit in 2006. These 
sponsors offer over 1,400 stand-alone Medicare prescription drug plans 
(PDPs) in one or more of 34 CMS-designated PDP regions.[Footnote 2] 
Depending on where they live, Medicare beneficiaries typically have a 
choice of 40 to 50 PDPs, which vary in cost and coverage. Generally, 
beneficiaries had until May 15, 2006, to enroll in Part D without the 
risk of a penalty in the form of higher premiums; as of June 11, 2006, 
about 16.4 million beneficiaries had enrolled in stand-alone PDPs. 

MMA requires each PDP sponsor to staff a toll-free call center. These 
call centers serve as key sources of the information that beneficiaries 
need to make informed choices among competing drug plans. Beneficiaries 
and others assisting them may contact call centers to obtain general 
information on Part D, ask detailed questions or verify information 
from other sources about a sponsor's PDPs, or enroll in a PDP.[Footnote 
3] Because beneficiaries have an opportunity to switch to another PDP 
during an annual open-enrollment period, sponsor call centers will 
continue to play a significant role in informing current and 
prospective enrollees.[Footnote 4] 

You were interested in the quality of the service and information 
provided to beneficiaries by PDP sponsor call centers, as inaccurate or 
misleading benefit information could lead beneficiaries to choose a PDP 
that does not meet their needs. In this report, we examined (1) whether 
PDP sponsors provide prompt, courteous, and helpful service to Medicare 
beneficiaries and others accessing their toll-free call centers, and 
(2) the extent to which PDP sponsors provide accurate and complete 
information to Medicare beneficiaries and other callers. 

To address these objectives, we made 900 calls to 10 of the largest PDP 
sponsor call centers, all of which operate in 30 or more PDP regions 
and offer two or three PDPs per region.[Footnote 5] As of April 27, 
2006, each of these sponsors served at least 100,000 beneficiaries. 
Each of our 10 sponsors has one toll-free call center, which we 
contacted from March 2 through March 31, 2006. We posed one of five 
questions about their Part D plans during each call, asking each 
question a total of 180 times--18 times to each of the 10 PDP 
sponsors.[Footnote 6] We developed scenarios with zip codes and 
fictional relatives for each of the questions. To make them sound 
realistic and provide needed information, we specified additional 
details, such as drug dosage and frequency information, lack of current 
drug coverage, low-income subsidy eligibility, and preference for 
retail purchasing, if asked.[Footnote 7] 

In developing our five questions, we examined those addressed by the 
Frequently Asked Questions section of CMS's Medicare.gov Web site. We 
also reviewed materials from policy analysts that identified 
information critical to making a choice among competing plans.[Footnote 
8] In addition, we spoke with representatives of beneficiary advocacy 
groups about the types of information beneficiaries need to consider 
when selecting a PDP plan. Finally, we asked CMS officials what types 
of information they required or expected call center customer service 
representatives (CSR) to be able to provide the public and developed 
our questions from this information. Although CMS does not have 
requirements regarding the specific types of information CSRs must be 
able to provide, agency officials told us that CSRs should be able to 
accurately answer questions about the relative costs of a sponsor's 
PDPs, the availability of a plan for beneficiaries eligible for 
Medicare's low-income subsidy, actions that beneficiaries could take if 
their drugs are not covered by the plan, and types of restrictions 
plans use to manage their formularies. 

To evaluate the extent to which sponsor call centers provided prompt, 
courteous, and helpful service during our calls, we analyzed 
information on the amount of time it took to reach a CSR and the number 
of calls for which we could not reach a CSR. In addition, our callers 
noted if they had concerns about the appropriateness and clarity of 
CSRs' language. In such cases, we evaluated whether the CSR was 
difficult to understand, impolite, or unprofessional. We also noted any 
helpful suggestions or information provided to the caller. 

We developed criteria for accurate and complete responses for each 
question from information provided on CMS's Web-based PDP finder tool 
on Medicare.gov[Footnote 9] and information that CMS has approved for 
use by its 1-800-MEDICARE CSRs (see table 1). Excluding calls for which 
we did not reach a CSR, we report results on the accuracy and 
completeness of information obtained during the remaining 
calls.[Footnote 10] We considered an answer accurate and complete if 
the CSR's response met all of our criteria and we considered an answer 
incomplete if the CSR's response met one, but not both of our criteria. 
We considered an answer inaccurate if the CSR's response did not meet 
any of our criteria. If the CSR stated that they did not know or could 
not provide an answer, we classified the call as "no answer provided." 

Table 1: Questions, Scenarios, and Criteria Used to Assess Response 
Accuracy and Completeness: 

Question: 1. PDP comparison for a low-utilization beneficiary[A]; 
Scenario: My mother takes the following drugs: Norvasc, Fosamax, and 
warfarin sodium. Which of the sponsor's plans would cost her the least 
amount annually and what is its annual cost?; 
Criteria for an accurate and complete response: The name and annual 
cost (within 5 percent) of the sponsor's PDP that would cost the 
beneficiary the least annually for the three drugs she uses. 

Question: 2. PDP comparison for a high-utilization beneficiary[A]; 
Scenario: My mother-in-law takes the following drugs: Aciphex, Benicar, 
Evista, Levoxyl, Pravachol, Synthroid, Zetia, and Zoloft.[B] Which of 
the sponsor's plans would cost her the least amount annually and what 
is its annual cost?; 
Criteria for an accurate and complete response: The name and annual 
cost (within 5 percent) of the sponsor's PDP that would cost the 
beneficiary the least annually for the eight drugs she uses. 

Question: 3. Low-income subsidy; 
Scenario: My mother automatically qualifies for extra help because 
Medicaid[C] pays part of her Medicare premiums. Does the sponsor offer 
a plan that she can join without having to pay a premium?; 
Criteria for an accurate and complete response: The name of the 
sponsor's PDP, if any, for which the beneficiary would not pay a 
premium. 

Question: 4. Nonformulary drugs; 
Scenario: If some of my grandfather's drugs are not covered, will he 
have to pay full price for them, or are there other things he can do?; 
Criteria for an accurate and complete response: A beneficiary may (1) 
switch to a covered drug, and (2) ask for an exception to the 
formulary. 

Question: 5. Utilization management tools; 
Scenario: If some of my grandfather's drugs are covered, but subject to 
restrictions, what does that mean?; 
Criteria for an accurate and complete response: Descriptions of at 
least two of the following: for some covered drugs (1) beneficiaries 
need approval from their PDP before they can fill their prescription; 
(2) the PDP limits the amount of the drug that it covers over a certain 
period of time; (3) the PDP requires that the beneficiary first try a 
less expensive drug for their condition before it will cover the 
beneficiary's prescribed drug; or (4) when there is a generic 
substitute available, the PDP will automatically provide the generic, 
unless the beneficiary's doctor specifically orders the brand- name 
drug. 

Source: GAO. 

Note: We considered an answer accurate and complete if the CSR's 
response met all of our criteria. We considered an answer incomplete if 
the CSR's response met one, but not both, of our criteria. 
Specifically, for questions 1 and 2, a response was incomplete if the 
CSR accurately named the lowest annual cost plan, but either 
inaccurately calculated or could not provide the annual cost. An 
incomplete answer was not possible for question 3, as it had only one 
criterion for accuracy and completeness. A question 4 response was 
incomplete if the CSR either stated that the beneficiary could switch 
to a covered drug or that they could ask for an exception, but did not 
state both these possibilities. Finally, a question 5 response was 
incomplete if the CSR accurately described only one utilization 
management tool. We considered an answer inaccurate if the CSR's 
response did not meet any of our criteria. If the CSR stated that they 
did not know or could not provide an answer, we classified the call as 
"no answer provided." 

[A] In 2003, 46 percent of all seniors reported taking five or more 
prescription drugs. Based on this survey finding, we specified three 
drugs for the low-utilization beneficiary and eight drugs for the high- 
utilization beneficiary. See Health Affairs--Web Exclusive: 
Prescription Drug Coverage And Seniors: Findings From A 2003 National 
Survey, April 19, 2005. 

[B] This scenario is based on a list of medications provided to us by a 
Medicare beneficiary. We recognize that Levoxyl and Synthroid are the 
same chemically, but retained both drugs in this scenario to make the 
calls as realistic as possible. Specifying that a beneficiary is taking 
both of these drugs did not preclude the ability of CSRs to determine 
the least costly plan and its annual cost. 

[C] Medicaid provides health care coverage to eligible low-income 
people and is jointly financed by the federal government and the 
states. 

[End of table] 

The results from our 900 calls are limited only to those calls and are 
not generalizable to the population of calls routinely made to sponsor 
call centers by beneficiaries and other callers. Although the five 
questions we posed are among the most critical questions regarding PDP 
comparison, they do not encompass all of the questions callers might 
ask. We did not contact PDP sponsors other than posing questions to the 
call centers. In addition, we did not examine other issues related to 
the performance of call centers, such as CSR qualifications and 
training, nor did we evaluate CMS oversight of sponsor call centers. We 
conducted our work from February 2006 through June 2006 in accordance 
with generally accepted government auditing standards. 

Results in Brief: 

Call center service was generally prompt and courteous, and many CSRs 
offered helpful suggestions and information. We reached a 
representative in less than 1 minute for 46 percent of the calls CSRs 
fielded, and in less than 5 minutes for 96 percent of the calls 
fielded. While we did not reach CSRs for 36 calls--4 percent of the 900 
calls we placed--mainly due to disconnections, we found that 98 percent 
of the CSRs with whom we spoke were easy to understand, polite, and 
professional. Many CSRs also provided helpful suggestions related to 
our questions. For example, for our question on the PDP comparison for 
a high-utilization beneficiary, CSRs provided the caller with 
information about lower-cost drugs in 41 percent of the calls. 

CSRs at 10 of the largest PDP sponsor call centers did not consistently 
provide accurate and complete responses to our five questions. 
Excluding the calls for which GAO did not reach a CSR, GAO obtained 
accurate and complete responses to about one-third of our 864 calls. 
The overall accuracy and completeness rates for the 10 PDP sponsor call 
centers varied widely, ranging from 20 to 60 percent. Only 1 sponsor 
call center had an overall accuracy and completeness rate of greater 
than 50 percent and 2 sponsor call centers had rates of 25 percent or 
less. CSRs were unable to provide an answer for 15 percent of our 
questions, primarily those related to plan costs. Furthermore, CSRs 
within the same call center sometimes provided inconsistent answers. 
For example, in response to questions regarding PDP comparisons, CSRs 
at 3 call centers told us that it was against the sponsor's policies to 
identify any of their plans as having the lowest annual cost. However, 
other CSRs at each of these call centers did not cite this policy and 
did identify a plan as having the lowest annual cost. 

In written comments on a draft of this report, CMS stated that our 
analysis was based on inaccurate, incomplete, and subjective methods 
that limited our report's relevance and validity. We maintain that our 
methods are sound and that our findings are accurate. In conducting 
this review, we identified topics that CMS, policy analysts, and 
beneficiary advocacy groups indicated were key to making an informed 
plan choice, posed questions as we expected beneficiaries' family 
members to do, and relied on information from CMS to develop criteria 
to assess the accuracy and completeness of the responses we received. 
Further, CMS officials told us at a May 2006 meeting that CSRs should 
have been able to accurately answer the questions we posed. Our 
findings indicate that beneficiaries may have difficulty getting 
appropriate information from PDP sponsors' call centers. CMS also 
stated in its written comments that we were right to be concerned about 
whether beneficiaries are getting effective services from plan call 
centers. 

Background: 

Medicare Part D coverage is provided through private sponsors that 
offer a choice of PDPs with different costs and coverage. The largest 
sponsors offer PDPs to beneficiaries throughout the United States and 
generally have experience in providing Medicare coverage and with call 
center operations. 

Key Features of Medicare Part D: 

Under Part D, each PDP may offer the standard prescription drug benefit 
or coverage that is different, but at least actuarially equivalent, to 
the standard benefit.[Footnote 11] According to the Medicare Payment 
Advisory Commission, for 2006, 9 percent of PDPs offer the standard 
benefit, 48 percent offer a basic plan that has the same actuarial 
value as the standard benefit but with a different design, and 43 
percent offer enhanced coverage that exceeds the standard 
benefit.[Footnote 12] Therefore, the specific premium, deductible, and 
copayment or coinsurance amounts, as well as the coverage gap--the 
period during which beneficiaries must pay 100 percent of their drug 
costs--of each PDP may vary. 

In addition, MMA and CMS regulations require plan formularies--the list 
of drugs a PDP covers--to meet certain standards, but within these 
standards, the drugs that are covered and the utilization management 
tools that are used to control costs may vary.[Footnote 13] If 
beneficiaries' drugs are not on their PDP's formulary, rather than 
paying full (retail) price for them, beneficiaries may switch to a 
similar drug that is on the formulary. Beneficiaries may also request 
that the plan make an exception to the formulary and cover their 
drugs.[Footnote 14] If the PDP denies that request, CMS regulations 
require that beneficiaries generally be able to appeal the decision to 
the sponsor.[Footnote 15] 

Although certain drugs may be on a PDP's formulary, they may be subject 
to one or more of several utilization management tools--the most common 
of which are prior authorization, quantity limits, step therapy, and 
generic substitution. For drugs subject to prior authorization, 
beneficiaries need approval from their PDP before they can fill their 
prescription and for drugs subject to quantity limits, the plan limits 
the amount of the drug it covers over a certain period of time. For 
drugs subject to step therapy, the PDP requires that the beneficiary 
first try a less expensive drug for their condition before it will 
cover the beneficiary's prescribed drug. Finally, generic substitution 
means that when there is a generic substitute available, the PDP will 
automatically provide the generic, unless the beneficiary's doctor 
specifically orders the brand-name drug. 

To help cover costs under Part D, Medicare provides subsidies to 
certain low-income beneficiaries. For example, Medicare beneficiaries 
for whom Medicaid[Footnote 16] pays their Medicare Part B[Footnote 17] 
premium automatically receive the full low-income subsidy. This subsidy 
provides the beneficiary with reduced copayment amounts, covers any 
deductible, provides drug coverage during the coverage gap, and helps 
pay their PDP premium, up to a certain amount.[Footnote 18] Other 
Medicare beneficiaries, however, must apply for the low-income subsidy 
through the Social Security Administration, and may receive only a 
partial subsidy. 

Characteristics of PDP Sponsors: 

For 2006, 79 sponsors are offering over 1,400 PDPs, each of which has 
been approved by CMS to ensure that it meets established standards. Ten 
of these sponsors are offering PDPs in all 34 PDP regions, and they 
account for nearly 62 percent of PDPs nationwide.[Footnote 19] The 
largest PDP sponsors are either in the commercial insurance or pharmacy 
benefit management and services sectors and generally have prior 
experience with call center operations.[Footnote 20] In addition, the 
largest PDP sponsors all have some prior experience with Medicare. Most 
offered a Medicare prescription drug discount card or partnered with a 
company and most offer Medicare Advantage plans.[Footnote 21] 

CSRs Generally Provided Prompt, Courteous, and Helpful Service: 

Almost all of the calls we placed were answered by a CSR with minimal 
delay. A limited number of calls were not answered by CSRs, mainly due 
to disconnections. Further, we found that most CSRs with whom we spoke 
were easy to understand, polite, and professional, and many provided 
helpful suggestions and information. 

Call centers generally provided prompt service in answering our calls. 
The wait time to reach a CSR was generally short--46 percent of the 864 
calls CSRs fielded were answered in less than 1 minute and 96 percent 
of the calls were answered in less than 5 minutes (see fig. 1). Only 9 
calls (1 percent) were answered in 10 minutes or more, with the longest 
wait time being 25 minutes (1 call). For a small number of calls--36 of 
the 900 calls we placed (4 percent)--we did not receive an answer to 
our questions because we did not reach a CSR. For almost all of these 
calls (33), this occurred because we were disconnected.[Footnote 22] 

Figure 1: Percentage of Calls by Wait Time to Reach a CSR, and 
Percentage of Calls Where We Did Not Reach a CSR, March 2006: 

[See PDF for image] 

Source: GAO. 

Note: Percentages of calls by wait time to reach a CSR are based on the 
864 calls for which we reached a CSR. Percentage of calls where we did 
not reach a CSR is based on the total number of calls (900) we placed. 

[End of figure] 

CSRs generally provided courteous service. Our callers noted that many 
were helpful and friendly, and we found that CSRs were easy to 
understand, polite, and professional in 98 percent of the calls. In 
addition, if a CSR did not know or could not answer a question, many 
provided additional resources for obtaining the answer, most commonly 
during calls on the low-income subsidy (question 3). While CSRs did not 
provide an answer for over one-third of the calls for this question, in 
over 80 percent of these cases, CSRs suggested another source the 
caller could contact to obtain the answer--most commonly Medicare or 
the Social Security Administration. 

Many CSRs also provided callers with helpful suggestions that related 
to our questions. For example, during question 1 calls on the PDP 
comparison for a low-utilization beneficiary, CSRs provided information 
about a mail-order option to obtain drugs in 22 percent of the calls. 
For question 2 on the PDP comparison for a high-utilization 
beneficiary, CSRs provided the caller with information about lower-cost 
drugs in 41 percent of the calls and inquired as to whether the 
beneficiary was eligible for the low-income subsidy in 24 percent of 
the calls. 

PDP Sponsor Call Centers Did Not Consistently Provide Callers with 
Accurate and Complete Information: 

CSRs at the 10 PDP sponsor call centers we contacted provided accurate 
and complete responses to about one-third of the calls they fielded, 
although the accuracy and completeness rates for each of the 10 sponsor 
call centers and for each of the five questions varied. CSRs were 
unable to provide an answer for 15 percent of the questions posed, 
primarily those related to plan costs. In addition, we found that CSRs 
within the same call centers sometimes provided inconsistent responses 
to our questions. 

About One-Third of CSR Responses Were Accurate and Complete: 

Excluding the 4 percent of calls for which we did not reach a CSR, we 
obtained accurate and complete responses to 34 percent of the calls-- 
294 of 864--and obtained incomplete responses to another 29 percent of 
the calls (see fig. 2). 

Figure 2: Percentage of Calls with Accurate and Complete, Incomplete, 
or Inaccurate Responses, and Those Where No Answer Was Provided, March 
2006: 

[See PDF for image] 

Source: GAO. 

Note: Percentages are based on the 864 calls for which we reached a CSR 
and exclude the 36 calls for which we did not reach a CSR. An 
incomplete answer was not possible for question 3. Calls were 
categorized as "no answer provided" if the CSR stated that they did not 
know or could not provide an answer. 

[End of figure] 

The overall accuracy and completeness rates for each of the 10 PDP 
sponsor call centers varied widely, ranging from 20 to 60 percent (see 
fig. 3). Only 1 sponsor call center had an overall accuracy and 
completeness rate of greater than 50 percent and 2 sponsor call centers 
had rates of 25 percent or less. No sponsor's call center consistently 
had the highest or lowest accuracy and completeness rate for all 
questions. For example, although 1 call center had the highest accuracy 
and completeness rate for both question 1 (the PDP comparison for a low-
utilization beneficiary) and question 2 (the PDP comparison for a high-
utilization beneficiary), it had the second-lowest accuracy and 
completeness rate for question 4 (nonformulary drugs). 

Figure 3: Lowest, Highest, and Average Sponsor Call Center Accuracy and 
Completeness Rate, by Question, March 2006: 

[See PDF for image] 

Source: GAO.  

Note: Percentages are based on the calls for which we reached a CSR and 
exclude the calls for which we did not reach a CSR. We placed 180 calls 
for each question; we reached a CSR 170 times for question 1, 169 times 
for question 2, 174 times for question 3, 176 times for question 4, and 
175 times for question 5. 

[End of figure]

Variation across call centers was due, in part, to differences in the 
resources that CSRs said were available to them. For example: 

* In response to questions 1 and 2, CSRs at two call centers indicated 
that they were able to compute the annual cost of the least expensive 
plan because they had access to a computerized "cost calculator." 
However, CSRs at other call centers stated that they could not compute 
an annual cost because they did not have access to such a resource. We 
located cost calculators on the Web sites of seven sponsors, each of 
which had call center CSRs who stated that they did not know or could 
not calculate an annual cost. 

* CSRs at six different sponsor call centers stated that they could not 
calculate the annual cost of the least expensive plan because they did 
not have access to the retail prices of the beneficiary's 
drugs.[Footnote 23] In contrast, CSRs at two other call centers stated 
that they did have access to these prices, and were able to use them in 
calculations. 

For each of the five questions, accuracy and completeness rates varied, 
but were generally low. They ranged from 14 to 60 percent (see fig. 4). 

Figure 4: Percentage of Calls with Accurate and Complete, Incomplete, 
or Inaccurate Responses, and Those Where No Answer Was Provided, by 
Question, March 2006: 

[See PDF for image] 

Source: GAO. 

Note: Percentages are based on the calls for which we reached a CSR and 
exclude the calls for which we did not reach a CSR. We placed 180 calls 
for each question; we reached a CSR 170 times for question 1, 169 times 
for question 2, 174 times for question 3, 176 times for question 4, and 
175 times for question 5. An incomplete answer was not possible for 
question 3. Calls were categorized as "no answer provided" if the CSR 
stated that they did not know or could not provide an answer. Total may 
not add to 100 due to rounding. 

[End of figure] 

Relatively few CSRs were able to accurately identify the least costly 
plan and calculate its annual cost.[Footnote 24] In addition, the 
annual cost estimates that CSRs provided were often substantially 
different from the plans' actual costs. For example: 

* For the low-utilization beneficiary (question 1), about 1 in 3 
responses were incomplete; that is, CSRs identified the least costly 
plan, but either inaccurately calculated its annual cost or stated that 
they could not provide any annual cost. Over half of the CSRs that 
provided an inaccurate response quoted a cost that was greater than the 
actual cost. 

* For the high-utilization beneficiary (question 2), about 3 in 10 
responses were incomplete. Among the 23 CSRs that correctly identified 
the least costly plan, but gave an inaccurate annual cost, almost all 
provided a quote that was less than the actual cost, and in 11 cases 
over $1,000 less.[Footnote 25] 

About two-thirds of the CSRs were unable to accurately report whether 
the sponsor offered a PDP for which a Medicare beneficiary that 
received help from Medicaid would not have to pay a premium (question 
3). Specifically, CSRs fielding this call answered inaccurately 31 
percent of the time and did not provide an answer 35 percent of the 
time. For most of the inaccurate answers, CSRs stated that a certain 
PDP would not require a premium from the beneficiary, but, in fact, it 
would. Other inaccurate responses showed a poor understanding of the 
low-income subsidy benefit; for example, two CSRs incorrectly stated 
that the low-income subsidy did not help offset the premium at all. 

Half of the CSRs responding to question 4 incompletely described the 
options available to a beneficiary taking a nonformulary drug. Of the 
incomplete responses, about 4 in 5 CSRs mentioned that the beneficiary 
could request an exception to have the plan cover the nonformulary 
drug, but not that the beneficiary could switch to a drug that the plan 
covers.[Footnote 26] In addition, 15 percent of CSR responses included 
neither possibility, with many CSRs stating that the beneficiary's only 
option would be to pay full price for nonformulary drugs. 

Finally, CSRs accurately described at least two utilization management 
tools in 60 percent of our calls for question 5--the highest accuracy 
and completeness rate of our five questions. Other CSRs identified, but 
could not accurately describe, specific tools. For example, one CSR 
incorrectly stated that quantity limits--a limit on the amount of a 
drug that the plan will cover over a certain period of time--means that 
a pharmacy may not have enough of a drug to fill the beneficiary's 
prescription. 

CSRs Did Not Provide Answers to 15 Percent of Calls, Most Often for 
Questions regarding Plan Costs: 

Overall, CSRs stated that they did not know or could not answer our 
question for 15 percent of the calls. This was most common for the 
questions related to PDP costs (the PDP comparison for a low- 
utilization beneficiary, the PDP comparison for a high-utilization 
beneficiary, and the low-income subsidy). 

For question 2 calls regarding the PDP comparison for a high- 
utilization beneficiary, 30 percent of the CSRs stated that they were 
unable to tell the caller which PDP would cost the beneficiary the 
least annually. In contrast, only 8 percent of CSRs provided this 
response for question 1 on the low-utilization beneficiary. This 
difference in the percentage of calls for which an answer was provided 
is likely due to the added complexity of comparing PDPs and calculating 
the annual cost for a beneficiary using eight drugs versus a 
beneficiary using three drugs. However, reliance on at least five drugs 
is common in the Medicare population.[Footnote 27] 

Question 3 regarding the low-income subsidy had the highest "no answer 
provided" rate--35 percent. Of the CSRs that did not provide an answer 
to this question, almost all stated that they did not know the subsidy 
amount the beneficiary would receive. Because they did not recognize 
that beneficiaries with both Medicare and Medicaid automatically 
receive the full low-income subsidy, they could not effectively 
determine whether that subsidy would cover the sponsor's PDP premiums. 

CSR Responses within Sponsor Call Centers Were Inconsistent: 

CSRs within the same call center sometimes provided inconsistent 
responses to our five questions. For example, within each of six 
different call centers, among CSRs who accurately identified the least 
costly plan for the low-utilization beneficiary (question 1), some CSRs 
calculated an accurate annual cost, some calculated an inaccurate 
annual cost, and others stated that they could not calculate an annual 
cost. In response to question 2 regarding the high-utilization 
beneficiary, different CSRs within five call centers identified each of 
their sponsor's PDPs as the least costly. In addition, in response to 
questions 1 and 2, CSRs at three call centers told us that it was 
against the sponsor's policies to identify any of their plans as having 
the lowest annual cost.[Footnote 28] However, other CSRs at each of 
these call centers did not cite this policy and did identify a plan as 
having the lowest annual cost. 

In part, these inconsistencies were due to differences in CSRs' 
knowledge about their sponsor's plans. For example, CSRs' varying 
knowledge related to the low-income subsidy question (question 3) 
produced contradictory responses. Within each of the 10 sponsor call 
centers, different CSRs answered accurately, inaccurately,[Footnote 29] 
or stated that they did not know or could not answer the question. When 
asked about the options for a beneficiary using nonformulary drugs 
(question 4), different CSRs within each of 6 sponsor call centers 
stated that a beneficiary could either switch to a covered drug or 
apply for an exception, stated only that the beneficiary could switch 
to a covered drug, stated only that the beneficiary could apply for an 
exception, or stated neither possibility. Among CSRs that stated 
neither possibility, the specific responses differed. For example, at 1 
of the above call centers, although five CSRs answered the question 
accurately, one erroneously stated that the beneficiary's only option 
was to pay full price for nonformulary drugs, and another erroneously 
stated that any drugs not covered by the PDP would be covered under 
Medicare Part B. 

In answering question 5 on utilization management tools, different CSRs 
within the same call center provided varying descriptions of the 
utilization management tools PDPs use. For example, although four CSRs 
within one call center provided accurate descriptions of at least two 
tools, three other CSRs within this call center each provided a 
different, and inaccurate, description of utilization management 
tools.[Footnote 30] At another call center, two CSRs stated that they 
could not describe any tools without knowing the specific drugs the 
beneficiary was taking--even though eight other CSRs at that call 
center were able to accurately describe at least one tool without 
knowing the beneficiary's drugs. 

Concluding Observations: 

Our calls to 10 of the largest PDP sponsors' call centers show that 
Medicare beneficiaries face challenges in obtaining the information 
needed to make informed choices about the PDP that best meets their 
needs. Call center CSRs are expected to provide answers to drug benefit 
questions and comparative information about their sponsors' PDP 
offerings. Yet we received accurate and complete responses to only 
about one-third of our calls. In addition, responses to the same 
question varied widely, both across and within call centers. Sponsor 
call centers' poor performance on our five questions raises questions 
about whether the information they provide will lead beneficiaries to 
choose a PDP that costs them more than expected or has coverage that is 
different than expected. Rather than consider PDP options solely on the 
basis of the call centers' information, callers may benefit from 
consulting other information sources available on Medicare Part D when 
seeking to understand and compare PDP options. 

Agency Comments and Our Evaluation: 

CMS reviewed a draft of this report and provided written comments, 
which appear in appendix I. 

In its comments, CMS characterized our analysis as based on inaccurate, 
incomplete, and subjective methods that limit the report's relevance 
and validity. However, CMS went on to say that despite its view on the 
study's limitations, GAO is right to be concerned about whether 
beneficiaries are getting effective service from plan call centers. 

CMS asserted that our questions did not reflect the usual questions 
received by PDP sponsor call centers. As noted in the draft report, we 
selected topics that were addressed in the Frequently Asked Questions 
section of the Medicare.gov Web site and regarded by policy experts and 
beneficiary advocates as important to making an informed plan choice. 
Furthermore, at a May 2006 meeting with CMS officials, the agency's 
Deputy Administrator stated that CSRs should be able to accurately 
answer all of the specific questions we posed during the study. 

CMS also stated that we asked for information that CSRs are not 
required to provide. Specifically, for questions 1 and 2 on PDP 
comparisons for low and high-utilization beneficiaries, CMS stated that 
it does not require sponsor call centers to provide information on the 
annual costs of their PDPs. However, while not necessarily required, 
agency officials had indicated that the information we sought from CSRs 
was within the scope of plan sponsor customer service efforts. In a 
discussion held before we conducted our March calls, CMS officials told 
us that the agency had not established any requirements regarding the 
specific types of information plan CSRs must be able to provide, but 
that it was reasonable to expect CSRs to give callers accurate 
information on the topics we included in our review. 

In addition, as noted in the draft report, some call centers were 
relatively successful in providing accurate and complete answers to 
questions 1 and 2, indicating that call center CSRs can handle such 
questions appropriately. One call center's CSRs answered the question 
accurately and completely in 88 percent of the calls for the low- 
utilization beneficiary, and one call center's CSRs responded correctly 
in 81 percent of the calls for the high-utilization beneficiary. In 
addition, we found that 7 of the 10 PDP sponsors had cost calculators 
on their Web sites that could have been used to answer these questions. 

CMS commented that, to be counted as providing a complete response to 
questions 1 and 2 on PDP comparisons, we expected CSRs to recommend a 
specific plan to the caller, a practice that often constitutes 
"steering," which is prohibited under Medicare marketing 
guidance.[Footnote 31] As noted in the draft report, our callers 
identified themselves as family members wishing to assist beneficiaries 
in choosing a drug plan. Providing assistance to beneficiaries--which 
is encouraged by CMS--generally consists of learning the 
characteristics of various PDPs and assessing their relative merits 
given the potential enrollee's needs. This is clearly allowed in CMS's 
Marketing Guidelines, which distinguish between assistance based on 
objective information and steering to a drug plan for financial gain. 

CMS also took issue with how we counted a specific CSR response to 
questions 1 and 2. The agency incorrectly claimed that a CSR's referral 
to 1-800-MEDICARE was categorized as an incomplete response. As noted 
in the draft report, we categorized responses as incomplete if the CSR 
accurately named the lowest annual cost plan, but either inaccurately 
calculated or could not provide the annual cost. If the CSR did not 
answer the question and instead referred the caller to 1-800-MEDICARE 
for information on PDPs, we classified the response as "no answer 
provided." 

CMS stated that the wording of question 3 on the low-income subsidy was 
inaccurate and therefore misleading. This question specifies that the 
beneficiary automatically qualifies for extra help because Medicaid 
pays part of her Medicare premiums. According to CMS, the wording of 
question 3 is incorrect because only Medicare pays the drug premium for 
low-income beneficiaries and Medicaid would fully (not partly) pay the 
Part B premium. However, CMS's comment conflicts with the information 
we obtained from its Medicare.gov Web site in developing the wording 
and answer for this question. Using the Web-based PDP finder tool on 
this Web site, the user can select one of several options specifying 
why the beneficiary qualified for extra help. We selected the option 
specifying that the beneficiary automatically qualified for extra help 
because they receive "help from [the] State paying Medicare premiums." 
We agree that only Medicare, and not Medicaid, pays the Medicare Part D 
premium for low-income beneficiaries and Medicaid would fully (not 
partly) pay the Part B premium. Therefore, for such a beneficiary, 
Medicaid would pay part of the beneficiary's Medicare premiums. 

CMS also stated that, for certain questions, many reasonable answers 
were not counted as correct. The agency cited our question regarding a 
beneficiary's options should he or she be prescribed a nonformulary 
drug, and asserted that our criteria for a correct response--switching 
to a covered drug or asking for an exception--was too limited. The 
agency stated that other reasonable answers should have been counted as 
correct because we conducted our calls at a time when all plans covered 
all Part D drugs.[Footnote 32] We obtained the answer to this question 
from a script that CMS approved for use by CSRs operating its 1-800- 
MEDICARE help line. In addition to the two options we used as criteria 
for an accurate and complete answer, the script mentioned that PDPs are 
required to provide beneficiaries with temporary transitional coverage 
(generally for 30 days after enrollment) of drugs not on the PDP's 
formulary. However, according to CMS, the purpose of this temporary 
coverage is to provide beneficiaries with sufficient time to switch to 
another drug or to request an exception to the formulary. Therefore, in 
specifying our criteria for an accurate and complete answer, we chose 
to include only the two options that CMS sees as longer-term solutions 
for the beneficiary. 

CMS stated that we did not examine certain features of the support 
services that plan sponsors' call centers are required to provide, such 
as hours of operation, wait times, disconnection rates, and language 
services. It also noted requirements that plans report a range of 
performance measures, such as beneficiary complaint rates and 
timeliness of exceptions and appeals decisions. As noted in the draft 
report, the scope of our review was limited to the accuracy and 
completeness of information disseminated to the public by PDP sponsors' 
call centers--a feature of plan customer service for which CMS has 
established no performance requirements. 

Finally, CMS believes that, as written, our study provides little 
practical guidance of value in improving the drug benefit and that our 
conclusion--that callers may benefit from consulting other information 
sources available on Medicare Part D when seeking to understand and 
compare PDP options--is obvious. In quoting our conclusion, CMS omitted 
the key part of the paragraph preceding the quoted phrase where we 
state that "sponsor call centers' poor performance on our five 
questions raises questions about whether the information they provide 
will lead beneficiaries to choose a PDP that costs them more than 
expected or has coverage that is different than expected. . . ." We 
continue to believe that plan sponsors should be accountable for the 
accuracy of their information and make maintaining effective call 
centers a priority. 

CMS also provided us with detailed, technical comments, which we 
incorporated where appropriate. 

As agreed with your offices, unless you publicly announce the contents 
of this report earlier, we plan no further distribution of it until 30 
days from the date of this letter. We will then send copies to the 
Administrator of CMS, appropriate congressional committees, and other 
interested parties. We will also make copies available to others upon 
request. This report is also available at no charge on GAO's Web site 
at [Hyperlink, http://www.gao.gov]. 

If you or your staffs have any questions about this report, please 
contact me at (312) 220-7600 or aronovitzl@gao.gov. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this report. GAO staff who made contributions to 
this report are listed in appendix II. 

Signed by: 

Leslie G. Aronovitz: 
Director, Health Care: 

List of Requesters: 

The Honorable John D. Dingell: 
Ranking Minority Member: 
Committee on Energy and Commerce: 
House of Representatives: 

The Honorable Henry A. Waxman: 
Ranking Minority Member: 
Committee on Government Reform: 
House of Representatives: 

The Honorable Charles B. Rangel: 
Ranking Minority Member: 
Committee on Ways and Means: 
House of Representatives: 

The Honorable Sherrod Brown: 
Ranking Minority Member: 
Subcommittee on Health Committee on Energy and Commerce: 
House of Representatives: 

The Honorable Pete Stark: 
Ranking Minority Member: 
Subcommittee on Health Committee on Ways and Means: 
House of Representatives: 

[End of section] 

Appendix I: Comments from the Centers for Medicare & Medicaid Services: 

Department Of Health & Human Services: 

Centers for Medicare & Medicaid Services:  
200 Independence Avenue SW: 
Washington, DC 20201: 

Date: Jun 15 2006:

TO: Leslie G. Aronovitz: 
Director, Health Care: 
Government Accountability Office: 

From: Mark B. McClellan, M.D., Ph.D. 
Administrator: 
Centers for Medicare & Medicaid services: 

SUBJECT: Government Accountability Office's (GAO) Draft Report: 
"Medicare Part D: Prescription Drug Plan Sponsor Call Centers Do Not 
Consistently Provide Accurate and Complete Information" (GAO-06-710): 

Thank you for the opportunity to review and comment on the GAO's draft 
report entitled, "MEDICARE Part D: Prescription Drug Plan Sponsor Call 
Centers Do Not Consistently Provide Accurate and Complete Information." 
Plan call center performance is very important for our beneficiaries, 
and so any important gaps in plan performance must be addressed 
promptly. Since the drug benefit began, we have identified areas where 
plan performance has fallen short and have directed plans to correct 
deficiencies. For example, we directed plans to reduce excessive call 
center wait times at the beginning of the year. We are pleased that 
your one-time evaluation in early March found results similar to our 
ongoing plan monitoring: plans generally are achieving low caller wait 
times and high call completion rates. But we are concerned about 
inaccurate, incomplete, and subjective methods in GAO's analysis that 
limit its relevance and validity. These problems appear to affect all 
five questions in GAO's analysis. 

As you note, customers must receive both timely and effective service 
when they use a plan help line. However, while GAO's five questions 
reflect topics of clear interest to many Medicare beneficiaries in 
choosing a drug plan, they do not reflect the usual questions received 
by plan call centers or the support services that plan call centers are 
required to provide. In addition, some of the answers that GAO viewed 
as right, wrong, or incomplete contradict the guidance and requirements 
that Medicare has provided to plans. 

Some GAO questions asked customer service representatives for 
information that they are not required to provide, and may even be 
prohibited from providing. For example, during the open enrollment 
period, we strongly encouraged beneficiaries to contact 1-800-MEDICARE 
or to use the computerized resources available at medicare.gov or 
through literally thousands of independent counseling partners around 
the country. These resources enable beneficiaries to get comparative 
pricing information on all available plans. Contacting one plan after 
another is an unnecessarily time-consuming approach that may not 
provide consistent information. For this reason, Medicare has never 
required drug plan call centers to provide detailed information about 
the prices of specific combinations of drugs. Despite this fact, two of 
GAO's five questions were on this topic. Moreover, according to GAO, a 
"complete" answer required recommending a specific plan to a caller, 
even though this practice often constitutes "steering" that is 
prohibited under Medicare's marketing guidance. And GAO counted as an 
incomplete answer what we recommend that plans do in these cases: refer 
callers to 1-800-MEDICARE for one-stop, objective information on all 
available plans. 

Another GAO question was factually inaccurate, and therefore 
misleading. It is not the case for any beneficiary that "My mother 
automatically qualifies for extra help because Medicaid pays part of 
her Medicare premiums." Only Medicare pays the drug premium for low- 
income beneficiaries, and Medicaid would fully (not partly) pay the non-
drug, Part B premium. Because this is a statement that is unlikely to 
occur among actual callers, it is understandable that the customer 
service representative might not name a plan option for which the 
beneficiary pays no premium, since the description would not obviously 
apply to any beneficiary. Why didn't GAO simply phrase the question as: 
"My mother automatically qualifies for extra help because she has 
Medicare and Medicaid," or (what we hear much more commonly) "`My 
mother has. Medicaid and Medicare"? 

Finally, for some questions, GAO's questions were generally worded and 
many reasonable answers were not counted. For example, when GAO 
conducted its survey in March, every plan was covering every Part D 
drug for every beneficiary. And some of the most popular plans have 
open formularies that cover all or essentially all drugs. As a result, 
the two specific answers counted as "correct" for GAO's question about 
nonformulary drugs - switching to a covered drug or asking for an 
exception - do not constitute a full set of reasonable answers. 

In our Detailed Comments, we describe other questionable features of 
GAO's methods that raise further questions about whether GAO's findings 
reflect problems in study design rather than plan response. 

Despite all of these limitations, GAO is right to be concerned about 
whether beneficiaries are getting effective service from plan call 
centers. Medicare beneficiaries should be able to count on the customer 
service from their plans. For this reason, CMS has implemented a broad 
set of requirements for call centers that reflect the services they 
should be expected to provide reliably. Plan sponsors must maintain a 
toll-free customer service call center that is open during usual 
business hours and provides customer telephone service in compliance 
with standard business practices. This means that the Plan sponsors 
must comply with at least the following: 

* Call center operates during normal business hours, but not less than 
seven days a week from 8:00 AM to 8:00 PM for those time zones in which 
the Applicant offers a PDP ; 

* Eighty percent of all incoming customer calls are answered within 30 
seconds; 

* The abandonment rate of all incoming customer calls does not exceed 5 
percent; 

* Call center provides thorough information about the PDP benefit plan, 
including co-payments, deductibles, and network pharmacies; 

* Call center features an explicit process for handling customer 
complaints; and; 

* Call center shall provide service to non-English speaking and hearing 
impaired beneficiaries. 

In addition to these requirements, CMS requires plans to report on a 
broad range of performance measures, many of which would indicate 
problems in the practical uses of customer service lines. For example, 
plans report complaint rates per 1,000 beneficiaries, timeliness of 
exceptions and appeals reporting, and grievances to CMS on a quarterly 
basis. Unfortunately, the GAO analysis did not look at any of these 
practically important features of plan customer service lines. Further, 
CMS is tracking complaints made through our 1-800 lines, regional 
offices, or partner organizations to identify patterns that would 
indicate a significant problem with a plan customer service line. 

More generally, it is worth noting that CMS has implemented a 
comprehensive Part D oversight program that incorporates training of 
Part D sponsors on programmatic, systems, and compliance issues; 
continuous oversight and formal compliance action as necessary, and 
peer comparison and public reporting on key performance metrics. The 
goals of CMS' oversight strategy are to assist with Part D plans' start-
ups, continuously identify Part D program vulnerabilities, assure 
strict adherence to Part D regulatory and program requirements, to use 
oversight and formal compliance actions as necessary, and to detect and 
prevent fraud, waste, and abuse. CMS expects to accomplish these 
objectives without impeding the ability of Part D contactors to deliver 
industry standard performance. Since these strategies, we have seen 
progress over the last several months in plans' responsiveness, 
including improvement in call center wait times, as well as a 
decreasing number of complaints made by beneficiaries and providers. 

As a final general comment, we would again request that GAO share 
details of their methods in advance, or at least in the course of 
review, so that the validity issues and the disconnect between Medicare 
requirements and GAO evaluation criteria can be avoided. Transparency 
and clarity from GAO would also help CMS identify actual gaps in plan 
performance that require further action; as written, the GAO study 
provides little practical guidance of value in improving the drug 
benefit. 

Indeed, GAO's principal conclusion - "callers may benefit from other 
information sources available on Medicare Part D when seeking to 
understand and compare PDP options" - has been obvious from the start 
and is the reason we have invested so much in providing objective 
assistance to beneficiaries and in working with thousands of partner 
organizations to do so. For many types of questions (i.e., 1-800- 
MEDICARE, www.Medicare.gov, and individual counseling through a vast 
network of partners), these other objective, independent sources can 
provide more complete and efficient personalized assistance, 
particularly for evaluating plan choices. Fortunately, millions of 
Medicare beneficiaries took advantage of these sources. They are also 
reporting relatively low rates of complaints about the plans, 
indicating that plan customer service is effectively complementing 
these additional sources of assistance for most people. As a 
result, beneficiaries are filling around 3 million prescriptions daily 
using their Medicare drug coverage, at a much lower cost than had been 
predicted. 

[End of section] 

Appendix II: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Leslie G. Aronovitz, (312) 220-7600 or aronovitzl@gao.gov: 

Acknowledgments: 

In addition to the contact named above, Rosamond Katz, Assistant 
Director; Manuel Buentello; Jennifer DeYoung; and Joanna L. Hiatt made 
major contributions to this report. Other contributors include Lori D. 
Achman, Diana B. Blumenfeld, Gerardine Brennan, Laura Brogan, Lisa L. 
Fisher, M. Peter Juang, Martha R.W. Kelly, Ba Lin, and Michaela M. 
Monaghan. 


FOOTNOTES 

[1] Pub. L. No. 108-173, § 101, 117 Stat. 2066, 2071-2152 (to be 
codified at 42 U.S.C. §§ 1395w-101--1395w-152). 

[2] Although beneficiaries may obtain drug coverage through either 
stand-alone PDPs or Medicare Advantage (Medicare's private health plan 
option) drug plans, this report addresses only stand-alone PDP sponsor 
call centers. About 90 percent of Medicare beneficiaries are enrolled 
in traditional Medicare, rather than Medicare Advantage. Therefore, 
most beneficiaries will be making choices among stand-alone PDPs. 

[3] Other sources of information about Part D and specific PDPs include 
sponsors' Web sites, and CMS's Medicare.gov Web site and 1-800-MEDICARE 
toll-free help line. 

[4] The 2006 open enrollment period is November 15, 2006, through 
December 31, 2006. Beneficiaries enrolling during this period will have 
coverage effective January 1, 2007. Certain beneficiaries (such as 
certain low-income beneficiaries) may switch PDPs at any time. 

[5] We placed calls at different times of the day and days of the week 
to match the typical pattern of calls reported by the 1-800-MEDICARE 
help line for January 2006. (CMS requires that each PDP sponsor operate 
its toll-free call center 7 days a week from at least 8:00 am to 8:00 
pm in the time zones in which it offers PDPs.) The population 
contacting 1-800-MEDICARE is likely to be very similar to the 
population contacting PDP sponsor call centers. 

[6] During our actual calls, CSRs were not aware that their responses 
would be included in a research study. 

[7] We used drug dosages and frequency information based on actual 
prescriptions. 

[8] See J. Antos, "Cutting through Confusion in Part D," American 
Enterprise Institute for Public Policy Research: Health Policy Outlook, 
no. 2 (2006): 1-7, and J. Hoadley, statement before the Government 
Reform Committee Briefing on the Medicare Drug Benefit, January 20, 
2006. 

[9] For the three questions about PDP costs, the source of our answer 
was Medicare.gov. We periodically checked that Web site and updated our 
answers, as needed. We also confirmed the accuracy of these data by 
checking PDP sponsor Web sites, where possible. 

[10] CMS does not have performance standards governing the accuracy 
rate of PDP call centers. However, the agency does have such a standard 
for 1-800-MEDICARE CSRs, striving for a 90 percent accuracy rate. In 
2004 and 2006, we reported on the accuracy of information provided by 1-
800-MEDICARE CSRs. See GAO, Medicare: Accuracy of Responses from the 1-
800-MEDICARE Help Line Should Be Improved, GAO-05-130 (Washington, 
D.C.: Dec. 8, 2004) and GAO, Medicare: Communications to Beneficiaries 
on the Prescription Drug Benefit Could Be Improved, GAO-06-654 
(Washington, D.C.: May 3, 2006). 

[11] As defined in MMA, for 2006, the standard benefit includes a $250 
deductible, and 25 percent coinsurance for costs after the deductible 
has been met, but before the initial limit of $2,250 in total drug 
spending is reached. Once this initial limit is reached, beneficiaries 
must pay 100 percent of their drug costs until total drug spending 
reaches the catastrophic limit of $5,100 ($3,600 in out-of-pocket 
spending). The amount between $2,250 and $5,100 is referred to as the 
"coverage gap." Once beneficiaries reach the catastrophic limit, they 
pay only 5 percent of their drug costs for the rest of the calendar 
year, with Part D paying 95 percent. 

[12] Medicare Payment Advisory Commission, Report to the Congress: 
Increasing the Value of Medicare (Washington, D.C. June 2006), 145. 

[13] MMA requires that formularies include at least two drugs in each 
approved category and class (unless only one drug is available for a 
particular category or class). MMA 117 Stat. 2085 and 69 Fed. Reg. 
46,632, 46,660 (Aug. 3, 2004). Formularies often consist of different 
"tiers," which are categories of drugs grouped according to their cost. 

[14] 42 C.F.R. § 423.578(b) (2005). 

[15] 42 C.F.R. § 423.580 (2005). 

[16] Medicaid provides health care coverage to eligible low-income 
people and is jointly financed by the federal government and the 
states. 

[17] Medicare Part B provides coverage for certain physician, 
outpatient hospital, and other services to beneficiaries who pay 
monthly premiums. 

[18] The amount of the subsidy varies by PDP region and does not cover 
the entire premium of all PDPs. Accordingly, not all PDP sponsors have 
a plan for which the subsidy covers the plan's entire premium. 

[19] The Henry J. Kaiser Family Foundation, The Landscape of Private 
Firms Offering Medicare Prescription Drug Coverage in 2006 (Washington 
D.C.: March 2006). 

[20] Many employer-sponsored health plans and insurers contract with 
pharmacy benefit managers for services such as negotiating price 
discounts with retail pharmacies, operating mail-order prescription 
services, and formulary development and management. 

[21] The prescription drug discount card was a program authorized by 
MMA to give beneficiaries access to lower-priced drugs from 2004 
through 2005. 

[22] We did not reach a CSR for the remaining three calls due to system 
errors or because the calls were misdirected, such as if the 
interactive voice response stated that the sponsor's call center was 
closed and that the caller should call back during certain specified 
hours. However, the call had been placed during those hours. 

[23] In estimating the amount a beneficiary pays annually, information 
on the plan's negotiated retail price is required, for example, to 
account for the purchase of any nonformulary drugs or the purchase of 
drugs during the coverage gap. In both these instances, the beneficiary 
typically pays the plan's negotiated retail price for the drug. 

[24] Inaccurately identifying the sponsor's least costly plan and its 
annual cost could have financial consequences for beneficiaries because 
the actual cost differences among sponsors' PDPs were often 
substantial. In the low-utilization beneficiary scenario, for 8 of the 
10 sponsors, the cost differences between the least costly and the next-
to-least costly PDP ranged from $106 to $388 per year. For the 
remaining 2 sponsors, the differences were less than $25. In the high- 
utilization beneficiary scenario, for 3 of the 10 sponsors, the cost 
differences between the least costly and the next-to-least costly PDP 
ranged from $517 to $2,346 per year. For the remaining 7 sponsors, the 
differences were less than $200. 

[25] For question 2 regarding the high-utilization beneficiary, the 
annual cost of the least expensive PDP for each sponsor ranged from 
$3,659 to $7,122. 

[26] A few CSRs mentioned that certain drugs (such as barbiturates, 
which are often used for seizure disorders or to relieve anxiety, and 
benzodiazepines, which are often used to treat anxiety and insomnia), 
are excluded from Part D completely and can never be covered. 

[27] See Health Affairs--Web Exclusive: Prescription Drug Coverage And 
Seniors: Findings From A 2003 National Survey, April 19, 2005. 

[28] In three of these calls, the CSR further stated that it was the 
individual's responsibility to determine the least costly plan. 

[29] Inaccurate responses include CSRs that stated there was one plan 
without a premium (when there was not), there was no plan without a 
premium (when there was), and that none of the sponsor's plans had a 
premium. 

[30] Specifically, one CSR at the call center stated that, for drugs 
subject to utilization management, the beneficiary may have to get a 
new prescription each time they obtain their drugs, rather than 
obtaining refills at the pharmacy. Another CSR at this call center 
stated that, for drugs subject to utilization management, the 
beneficiary will need a prescription for any "addictive" drugs. A third 
CSR said that utilization management means that certain drugs may only 
be covered at select pharmacies and specific strengths of certain drugs 
may not be covered. 

[31] Steering constitutes an attempt to guide beneficiaries to a 
specific PDP or group of PDPs to further financial or other interests. 

[32] Because all PDPs do not routinely include all Part D drugs on 
their formularies, we assume that CMS's comment refers to the 
requirement that all beneficiaries enrolled in January or February 2006 
receive temporary drug coverage through March 2006, and that all 
beneficiaries enrolled thereafter receive temporary drug coverage for 
at least 30 days. 

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