Medicare blunder costs $50 million

So what’s a mere $49,665,000 among friends? That’s about how much was sent out by mistake to Medicare recipients after one big federal agency misinformed another big federal agency.

The Centers for Medicare and Medicaid Services (CMS) distributed checks last week averaging $215 each to 231,000 Medicare beneficiaries to reimburse them for prescription-drug coverage. Trouble was, the mailing was based on faulty information: CMS mistakenly placed those participants on a list of those who do not have money withheld from their Social Security check to cover premiums.

Of course, the pricey blunder was sent over to Social Security, the checks issued — and now Medicare wants the money back. CMS has issued a letter of apology, plus a polite request to recipients to return the funds.

But not to worry, the glitch is fixed and all is well, said CMS spokesman Jeff Nelligan.

“Everything is under control. We moved immediately after we found there was a problem,” he said yesterday. “Most importantly, no coverage has lapsed for any beneficiaries, and there will be no delays or disruptions. The letters advising people of the overpayment were already in the mail last weekend.”

The number of people affected is relatively small, Mr. Nelligan said, constituting about 1 percent of the total beneficiary population. But some say the system is an accident waiting to happen.

“It’s a mess, and this situation was inevitable,” said Vicki Gottlich of the District-based Center for Medicare Advocacy, a watchdog group that gave CMS tepid reviews last month in an analysis of the new Medicare Part D, which offers subsidies for medications.

The report deemed both benefits and myriad regulations confusing and a source of frustration for Medicare participants since the plan took effect in January, Ms. Gottlich said.

“For the last eight months, we’ve helped people who have had premiums improperly deducted, or were charged for plans they didn’t enroll in. We’ve seen plenty of glitches already,” she said. “This week’s glitch is evidence that federal government systems can’t support the complexities of Part D. We’re particularly concerned that people will conclude they’re not entitled to their benefits.”

Meanwhile, CMS director Mark McClellan said yesterday that insurers who administer the drug benefit will continue to be paid for beneficiaries affected by the error, according to the Associated Press. About 5 million people pay monthly drug-coverage premiums by having money withheld from their Social Security checks.

Mr. McClellan also said the government can’t make monthly premium deductions again until October. CMS plans to work with beneficiaries who face financial troubles because they either cashed the overpayment or can’t afford multiple premiums withdrawn from a single Social Security check.