In the news ... 2006 archive

Governor Schwarzenegger Extends Emergency Program
to Ensure California's Most Vulnerable Residents
Have Access to Life-Saving Medications

Governor Arnold Schwarzenegger today extended an emergency program to ensure low-income seniors and persons with disabilities receive the prescription drugs they need when they are unable to obtain them through Medicare coverage.

"While the federal government has stepped up and is working to fix problems with their prescription drug program, Californians are still having trouble accessing the critical medications they need to stay alive," said Governor Schwarzenegger. "Vulnerable Californians need our help, that's why I am taking the action necessary to ensure low-income seniors and persons with disabilities walk out of the pharmacy with the drugs they need. We will continue to work with the federal government to ensure all the problems in this system are fixed and that states are made whole for the costs of protecting our residents."

To ensure continuity of coverage, the Department of Health Services is notifying pharmacies across the state about the extension of the emergency program immediately.

On January 1, 2006, under the Medicare Modernization Act, the federal government took responsibility for prescription drug coverage for the nearly one million Californians dually eligible for Medi-Cal and Medicare. The transition of these individuals to federal Medicare plans in just one day resulted in an error rate of 20 percent.

To ensure Californians had access to the medications they need, the state initiated an emergency program making it the payer of last resort since January 12. To receive reimbursement, a pharmacy must certify that it was either unable to obtain necessary information from Medicare to submit a claim, its claim was incorrectly denied or that the beneficiary's deductible or co-payment was higher than the $1 to $5 amount established by Medicare. This program was authorized by legislation for an initial 15-day period which could be extended for an additional 15-days if problems in the federal system were not resolved. This initial 15-day period expires tomorrow, January 27. Due to the continuing problems in the federal system, Governor Schwarzenegger decided to take action today to extend the state's emergency program for an additional 15-days.

This week, the federal government committed to working with states to ensure they are fully reimbursed for the costs of the emergency prescription drug coverage. California's Medi-Cal Director Stan Rosenstein, will be a lead negotiator with the federal government to ensure states receive full payment.

AB 132, the legislation authorizing California's emergency program was signed last week by Governor Schwarzenegger. Specifically, the legislation:

• Authorized the Department of Health Services to be the payer of last resort for dual eligibles unable to get their medications through the Medicare program effective January 12, 2006.
• Established an initial 15-day emergency program and provided the Governor with the authority to extend the emergency program an additional 15-days.
• Allocated $150 million dollars from the state's general fund to fund this emergency program for up to 30 days.
• Provided the Department of Health Services the authority to seek reimbursement from the federal government and the Medicare Part D plans for the cost of this emergency action.
• As of 11:59 p.m. on January 25, 2006, the state had filled 141,211 prescriptions at a cost of $11.4 million under this emergency plan.