Swindlers see opportunities in drug-discount cards

By Jolayne Houtz
Times consumer-affairs reporter

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At least 17 states, including Washington, have reported scams involving the new cards: con artists selling fake cards or trying to get seniors' personal information.

Medicare officials say they will monitor the drug-card sponsors closely to make sure they don't take advantage of seniors.

Key ways to protect yourself • Never give out personal or financial information to someone you don't know. Approved Medicare card sponsors aren't allowed to come to your door or call you. • Look for this logo: All discount cards approved by Medicare will carry this seal. (Be aware, though, that there's little to keep con artists from counterfeiting this symbol.) • If a card provider pressures you to act fast or tries to scare you into making a quick decision, that's a tip-off that it's a scam. The same is true if the card costs more than $30. • To report possible drug-card scams, call the Medicare hotline, 800-MEDICARE (800-633-4227) or the state Attorney General's consumer hotline: 800-551-4636.

Card sponsors have access to an essentially captive audience of seniors who can switch cards just once in the next 18 months. The sponsors, however, have the ability to make weekly changes in the drugs they cover and the prices they charge.

Sponsors will have to post changes affecting the drugs they cover or their prices with the Medicare Web site, which will be updated weekly, said Peter Ashkenaz, a spokesman for the federal Centers for Medicare & Medicaid Services. The updates also will be available by calling the Medicare hotline.

Federal authorities also will monitor overall drug prices. Drug-card sponsors can increase the negotiated price for covered drugs only if there is a change in the sponsor's costs. Companies that raise prices in a way that "is not reflected in what's happening in the marketplace" could be sanctioned, fined or removed from the program, he said.

Medicare officials also will watch for "bait-and-switch" tactics and conduct "mystery shopping" by calling the toll-free numbers of card sponsors to ensure they are charging seniors the same enrollment fees and drug prices they advertise.

Some consumer activists say it may be too late. Prices for drugs used most often by the elderly have surged since mid-2001, when President Bush proposed the drug-discount cards, according to a report by The Wall Street Journal.

This is akin to a department store "marking up prices on products so that it can later offer them 'on sale' at tremendous 'savings,' " Families USA, a health-consumer advocacy organization, says on its Web site.

Seniors can expect a blizzard of mail, radio and TV ads that is likely to add to the confusion surrounding what Consumers Union, publisher of Consumer Reports magazine, is calling one of the most complicated government programs ever.

Con artists quickly spotted an opportunity in this morass. Some have gone door-to-door, purporting to offer discount cards and trying to sign up seniors in exchange for their bank or credit-card information.

In other cases, callers who have some of a senior's private health information have called seeking Social Security numbers or Medicare information, possibly to file false claims.

Copyright © 2004 The Seattle Times Company

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