Federal officials have given negative assessments to more than a quarter of Medicare's rated prescription drug plans that will be available to seniors in 2012, according to an analysis of Medicare data.
The Centers for Medicare and Medicaid Services is notifying the plans that, unless they improve their performance over the next few years, they face expulsion from Medicare.
This month, CMS revised the way it rates Medicare drug plans to focus more on quality, and many plans' ratings fell from 2011 to 2012.
The criteria changed to stress clinical outcomes, such as whether a patient takes his medication the way he is supposed to, in addition to process measures, such as how long a patient is kept on hold when calling the plan. It also considered complaints lodged against plans and the numbers of people who chose to leave plans.
While the new system labeled more plans as poor performers, CMS says this is likely to lead to better options for the 28 million elderly and disabled beneficiaries who rely on those plans to help pay for medications.
"We have raised our standards, and we are not apologizing for that," said Jonathan Blum, deputy administrator and director for Medicare at CMS, who stressed that benefits have not disappeared. "We will push as hard as we can to elevate performance. If plans are getting worse, we expect them to get better."
Traditional Medicare does not cover most prescription drug costs for beneficiaries, but they can voluntarily buy private Medicare Part D drug plans. CMS rates the prescription plans according to a star system, with five stars indicating the highest quality and one star the lowest. That system is similar to ratings for the private Medicare Advantage health plans that about a quarter of seniors choose instead of traditional Medicare.
This month, CMS proposed a new rule that would allow it to oust plans that score below three stars for three consecutive years.
The low-performing prescription plans are also a problem for many people who qualify for both Medicare and Medicaid, the joint federal-state health care program for the poor. If they don't choose a plan, they are by law randomly assigned to drug plans with average or below-average costs. More than half of those drug plans -- 52 percent -- get just two stars, according to Avalere Health, a health care consulting company.
There are nearly 9 million of these "dual eligibles" in the United States. Most are seniors, but about a third are younger people with disabilities, and more than half have annual incomes below $10,000.
Low-income beneficiaries can do their homework and switch plans, but like other seniors, most do not even look for new options.
Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.