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Policy Newsletter

August 29, 2006 | IN THIS ISSUE:

WLF Sues CMS Over Nursing Home Part D Restrictions

The Washington Legal Foundation held a press conference today   to discuss a lawsuit it has filed against CMS.  The lawsuit charges CMS’  prohibition on long term care providers recommending Medicare Part D plans to nursing home residents is an unconstitutional violation of First Amendment.  Below is WLF’s press release regarding their lawsuit.  A copy of the lawsuit   and a link to a webcast of the press conference is available at http://www.wlf.org       

(Washington Legal Foundation v. Leavitt)    

The Washington Legal Foundation (WLF) has filed suit in U.S. District Court for the  District of Columbia against CMS (the federal Centers for Medicaid and Medicare Services),  alleging that CMS is trampling on First Amendment rights in seeking to suppress truthful speech  regarding insurance coverage available to senior citizens under Medicare Part D. Part D is the  recently enacted Medicare program that offers insurance for the cost of prescription drugs.  WLF filed suit on behalf of members who, as a result of CMS’s actions, are unable to  obtain accurate information about competing insurance providers. The suit seeks an injunction  against continuation of CMS's policy.    

WLF held a press briefing regarding its lawsuit on Tuesday, August 29, 2006.  Speaking at the briefing were WLF Chief Counsel Richard Samp and V. Thomas DeVille of  DeVille Pharmacies, Inc. in Dillsboro, Indiana. Samp and DeVille will discuss health-care  problems created by CMS’s speech-suppression policies, and why those policies violate the First  Amendment.    

“By blocking access to information and advice about Part D, CMS is making it extremely  difficult for WLF members to make informed choices regarding which insurance options best  suit their needs,” said WLF’s Samp after filing WLF’s suit. “Ironically, the groups that CMS  bars from providing truthful information – including nursing homes and pharmacies – are often  the very groups that have the most knowledge regarding the needs of Medicare recipients and the  intricate details relating to the benefits provided by Part D plans,” Samp said.    

Congress adopted the new Part D prescription drug benefit program in 2003. The  program provides that new entities, known as Prescription Drug Plans or “PDPs” are to offer  choices in prescription drug insurance coverage to Medicare beneficiaries and compete for the  patronage of each participant. Coverage under the PDPs began on January 1, 2006, with  enrollment beginning on November 15, 2005. Medicare beneficiaries have numerous Part D  plans to choose among – generally more than 40, and in some areas more than 80.    

Coverage offered by the various PDPs vary widely. For example, each PDP sets its own  monthly premium, the list of drugs for which coverage is available and/or for which coverage is  denied without “prior authorization,” required co-payments, and any “quantity limit” on the  number of pills for which coverage is provided. Accordingly, a Medicare recipient choosing  among PDPs needs to know, for example, which PDPs offer coverage for drugs the recipient is  regularly prescribed.    

In Marketing Guidelines first issued in August 2005, CMS has imposed severe  restrictions on the dissemination of information about PDPs – not only by the PDPs themselves,  but also by other organizations and individuals involved in the health-care delivery field. For example, “providers” (a term broadly defined to include any health-care provider that has entered  into a contractual relationship with a PDP, including pharmacists, doctors, hospitals, and nursing  homes) are barred from giving advice to their patients regarding which PDP best suits the  patients’ needs. The result is that Medicare beneficiaries – many of whom are ill-equipped to  undertake the complex analysis necessary to understand available options – often cannot obtain  meaningful advice regarding which plan best suits their needs.    

WLF’s suit charged that by suppressing truthful speech about Part D options, CMS is  violating the First Amendment rights of WLF members and supporters who wish to obtain such  information. WLF charged that CMS’s rationales for its speech-suppression policies – including  a concern that providers might accept kick-backs in return for recommending a particular PDP –  do not justify its infringement on free speech rights. WLF noted that CMS may enforce antikickback  statutes without suppressing speech. WLF asked the Court to enjoin CMS from  continuing to bar providers from providing truthful information.    

WLF is a public interest law and policy center located in Washington, with members and  supporters nationwide. WLF often advocates before CMS and the Food and Drug  Administration, and litigates against them in support of the health-care needs of all Americans.  Among WLF’s litigation successes are a landmark case that established a First Amendment right  to disseminate truthful information about off-label uses of FDA-approved products, and a recent  appeals court decision establishing that terminally ill patients have a constitutional right of  access to experimental drugs when no other treatment options are available.    

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The Washington Legal Foundation