Medicare refunds point to a bigger problem

Health program and Social Security struggle to coordinate their computer systems to ensure fairness

September 25, 2006|By New York Times News Service

WASHINGTON -- When Medicare mistakenly sent premium refunds to 230,000 people who had signed up for prescription drug coverage, the Bush administration said the error resulted from a rare computer glitch. But government records and interviews with federal officials show it was the latest example of a strained, often dysfunctional relationship between two of the government's biggest programs.

For more than a year, officials who run the two programs, Social Security and Medicare, have struggled to mesh their computer systems so that Medicare premiums are correctly withheld from Social Security checks, and low-income people get the extra help to which they are entitled. The problems are compounded because this information is collected and used by scores of private Medicare drug plans, each with its own procedures and computer systems.

Lawmakers worry that similar problems will occur as millions of people sign up for new drug plans starting on Nov. 15.

Several recent surveys, including one by J.D. Power & Associates, the market research company, suggest that three-fourths of the people getting drug coverage through Medicare are satisfied with it. But officials predict that many beneficiaries will switch plans to lower their drug costs or get better coverage.

Under the 2003 Medicare law, people who sign up for drug coverage can pay premiums once a month on their own, or they can have the money withheld from their Social Security checks, just as basic Medicare premiums have for years been deducted from such checks.

Since the drug program began on Jan. 1, hundreds of thousands of beneficiaries have reported problems in getting the government to carry out their instructions to start or stop the withholding of premiums. Drug plans have repeatedly complained to Medicare officials that premiums were not being properly withheld, so beneficiaries were upset.

Medicare officials say Social Security and its computer systems bear much of the responsibility. And Social Security says the data it receives from Medicare is often full of errors and does not match the information it already has on beneficiaries. Without a perfect match, Social Security officials say they cannot order the Treasury to change the amount of a person's Social Security payment.

The commissioner of Social Security, Jo Anne B. Barnhart, and the Medicare administrator, Dr. Mark B. McClellan, discussed the problems with the Senate Finance Committee behind closed doors Sept. 7. After the briefing, lawmakers said they did not fully understand the interaction between the two agencies.

"There seems to be greater confusion, not less," Sen. Gordon H. Smith, an Oregon Republican, said after listening to the officials' explanations.

In an interview, Beatrice M. Disman, a Social Security official who has been with the agency for more than 40 years, said: "What the public has to understand is that Social Security is at the end of the trail. We rely on information provided by Medicare."

Medicare, in turn, relies on its own files and information supplied by beneficiaries and the drug plans in which they enroll. Drug plans often must contact beneficiaries to resolve discrepancies in data compiled by the two federal agencies.

Social Security and Medicare officials said they were working hard to solve the problems, which McClellan catalogued in a recent letter to Barnhart.

"In the past," McClellan wrote, "my staff has felt that significant concerns they have expressed have not been taken into account by Social Security." For example, he said, Social Security officials established "technical details of the data exchange" in 2004 without fully considering requirements of the new law or concerns expressed by Medicare officials.

In his letter, McClellan complained about "the unnecessary complexity" of the system devised by Social Security, which performs "more than 40 edits" on each transaction requested for a Medicare beneficiary.

Disman defended these "quality checks," saying: "We may have information that a person is in the ABC plan. Now Medicare tells us to withhold premiums for the XYZ plan. We have to verify that."

Some Medicare beneficiaries change plans frequently, and drug plans are continually sending fresh information to Medicare. But in his letter, McClellan said: "We have only been allowed to submit data to your systems for about 10 business days out of each month. Because of your system design, SSA will not process transactions outside of that window."

Constance S. Beskind, 80, of Westport, Conn., said it had taken her five months to get Social Security to stop withholding premiums for her drug coverage, provided by Humana. "It was a nuisance," said Beskind, who takes drugs for osteoporosis and high blood pressure. Humana told her that Social Security was responsible for the problem, she recalled.

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