THE COLOR OF MONEY
Medicare beneficiaries should beware of scams while seeking out drug discount cards

By Michelle Singletary

WASHINGTON — It's not enough that seniors have to pay high prices for the drugs they need. Now comes a warning of scams targeted specifically at seniors, and it makes me want to holler.

Using the drug discount card program as bait, crooks are trying to pry personal information out of seniors to commit identity theft or credit card fraud. According to federal and state officials, Medicare beneficiaries also face the risk of being sold bogus discount cards or being led to believe that a certain drug card is approved by the government when it's not.

For example, the Massachusetts attorney general issued a warning to seniors after receiving complaints about a company that sent solicitations crafted to look like an official government mailer — it could fool people into believing the company was selling a Medicare-approved drug discount plan.

"Anytime there is a new government program, unfortunately there are those out there who will try to take advantage of people," said Mark McClellan, the administrator of the Centers for Medicare & Medicaid Services, which along with the Office of Inspector General recently issued an advisory cautioning people to be careful if they are approached to buy a drug discount card.

Reported cases of possible fraud have come from Medicare beneficiaries around the country, McClellan said. Authorities are investigating cases in which people received calls as well as in-person solicitations from individuals attempting to gain personal information — a Social Security number, credit card number or bank account information.

"We haven't seen large-scale fraud yet, but we've seen enough to make us want to make sure Medicare beneficiaries are protected," McClellan said.

The introduction of the discount drug program is part of a new Medicare law. A number of companies will be offering the Medicare-approved cards, including HMOs and insurance and pharmaceutical firms. How much people save will depend on what drugs they take, what pharmacy they use, and the discount drug card they choose. That means it is going to be confusing just figuring out which discount card to get.

And confusion has always been the best tool to help con artists cheat people.

Just so you know, the prescription drug benefit goes into effect in two stages.

The first step includes the issuance of discount cards, which can be used starting June 1. The discount card program is only temporary and will be phased out by Jan. 1, 2006. At that point, the cards will no longer work and will be replaced by a Medicare drug benefit.

Card sponsors can advertise their cards on television and radio, in newspapers and via direct mail. But they can't make cold calls or send representatives door to door.

So, if you're a Medicare beneficiary, you should not be getting a call out of the blue from a card sponsor — unless you requested information in response to an ad you saw or direct mail you received.

Because it's so easy these days to fake almost anything, the best way to avoid being a victim of a discount drug scam is to contact Medicare first before responding to a direct mail offer or giving out any information to anyone claiming to offer an government-approved drug card.

A list of companies federally approved to offer discount drug cards is available on the Medicare Web site at www.medicare.gov or by calling the toll-free line at (800) 633-4227. If you do buy a drug card, it should carry a "Medicare Rx Approved" seal.

When deciding which Medicare-approved discount card to sign up for, the Medicare Rights Center and AARP recommend you consider the following:

• Look to see which pharmacies accept which cards.
• Check to see whether the drugs you take are covered. If you use several medications, it could take some time to figure out which cards cover most of your medications.
• If you travel often, you may want a card that will be accepted nationwide.
• If you have drug coverage through an employer or former employer, you may not need the discount card. However, you may still want to compare plans to find the best drug prices.
• If you have a Medigap plan with drug coverage, you may get lower prices using that discount plan.

Scams are so sophisticated and so hard to detect that your best defense is to just say no before ever saying yes to a deal. In the case of the new Medicare discount drug card program, call or go online before you give anybody any information or your money.