Audit calls for revamping Senior Rx program

Wednesday, June 30, 2004 | 9:36 a.m.

CARSON CITY -- The state's program that provides prescription drugs at a reduced cost to an estimated 9,000 senior citizens should be restructured to save an estimated $1.3 million a year, according to a state audit released Tuesday.

The report, released by the state Division of Internal Audits Tuesday, said the state should administer the program without contracting with an insurance company.

An additional $900,000 a year could be saved by getting seniors to enroll in the new federal Medicare drug benefit program, thereby reducing Senior Rx costs, it said.

Gov. Kenny Guinn started the program when he took office. The audit said it saved seniors about $4.8 million in pharmacy costs last year.

Guinn's program relied in large part on private companies to administer the program. Assembly Majority Leader Barbara Buckley, D-Las Vegas, pushed for a fully state-run program. There was a compromise in the 2001 Legislature but the audit recommends the state take over more of the program.

The state has already started the switchover. State Human Resources Director Mike Willden, who oversees Senior Rx, said it has solicited bids to be opened July 22 to get one of the federally approved Medicare drug discount firms to take over operation of Senior RX.

The contract with Fidelity Security Life Insurance Co. of Kansas City, Mo., will not be renewed, he said.

The state paid for insurance coverage if the average drug cost per member per month exceeded $65. "Since the claims cost never reached $65 where insurance would cover claims, Senior Rx should eliminate using the insurance company," said the audit that noted the insurance company has kept the premium without paying out a benefit.

Willden told the Executive Branch Audit Committee headed by Guinn that 40 percent of those enrolled don't get any prescription drugs. He said the average for the others is that they spend $65 out of their own pocket and the state contributes $65.

Seniors make a co-pay of $10 for generic and $25 for a brand name drug offered by the program. They do not pay any premium to enter the program.

Senior Rx had a budget for this fiscal year of $8.2 million.