Medicare Part D: Prescription Drug Plan Sponsor Call Center Responses Were Prompt, but Not Consistently Accurate and Complete
Released: 2006-07-10T00:00:00

Letter

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. 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. 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. 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. If the PDP denies that request, CMS regulations require that beneficiaries generally be able to appeal the decision to the sponsor.

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 pays their Medicare Part B 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. 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. 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. 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.

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.

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).

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).

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. 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).

Relatively few CSRs were able to accurately identify the least costly plan and calculate its annual cost. 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.

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. 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.

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. 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, 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. 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. 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 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. 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 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.

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

Appendix II: GAO Contact and Staff Acknowledgments

GAO Contact

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.