Notebook: Medicare In Nursing Homes

(CBS)  CBS News correspondent Wyatt Andrews wrote this reporter's notebook as part of his ongoing examination of problems with the rollout of the new Medicare drug plan.

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Sometimes in journalism, the best way to understand someone's problems is to go watch them handle those problems. And so we decided to watch Dr. Jeff Kerr jump what he called the "hurdles" of the new Medicare drug benefit, called Medicare part D.

For three hours on April 25, our CBS News team watched as Kerr made his rounds and treated patients at the Rolla Presbyterian Manor, a nursing home and assisted living facility in Rolla, Mo. Kerr is the contract physician for 290 patients at six elder care homes in the area. One hundred percent of his patients are on Medicare and use part D.

Before I describe his morning, remember that Medicare part D is a government benefit administered by private insurance companies. Seniors must choose, or be assigned to, a private insurance company to get their drug coverage. Each insurance company offering the benefit (there are 40 in Missouri) has its own rules for which drugs are covered.

If you think that's complex, get this: insurance companies can "cover" a certain drug but still restrict access to that drug. They often demand "prior authorization" for a covered drug, meaning the nurse or doctor has to justify the prescription in advance and in writing. The companies demand "step therapy," basically demanding that a senior citizen try a cheaper drug and fail, before moving on to a more expensive drug.

Restricted access rules are applied for safety and cost control reasons. The companies want to make sure they are covering properly prescribed drugs and — to make more money — they want to steer seniors toward the cheapest effective drug.

But all these rules are driving Kerr and other nursing home doctors crazy.

Let's walk down the hall.

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Web Exclusive Video: More With Dr. Kerr

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As Kerr examines Gene Lister, an Alzheimer's patient, the doctor grows more convinced his patient is improving thanks to a drug called Aricept. Lister can eat by himself now and often recognizes his family members. He could not do either before the trial run on Aricept. Lister's wife and daughter are in the room, and agree with Kerr's observations.

Problem. Lister's insurance company won't cover any more Aricept unless Lister takes a mental health exam, part of which requires him to draw a diagram.

I'm thinking: do I have this right? Am I in a bad remake of "Catch 22"? No more Aricept unless he takes this exam. But he's too far gone to take any exam. Kerr says the insurance company is pushing him to use a lesser, ineffective drug. The family is both laughing at and angry with the company.

(Side note: When I called officials at Medicare, they justified the exam taking, because Aricept is only "labled" by the FDA for moderate dementia. Therefore if the exam proves Lister has severe dementia, which he does, the Aricept prescription would represent an "off label" use. However, Kerr's clinical observation of Lister's improvement on Aricept, would in the opinion of many geriatricians be appropriate, and there is no blanket prohibition on medically justified off label prescriptions.)

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