With the rampant auto insurance fraud we see today in Florida, it would be easy to believe that quote came from the Governor or Chief Financial Officer. Actually, it came from then-FBI Director Louis Freeh, speaking back in 1995. Here we are 17 years later, still grappling with the same problem of criminals looking to rob our personal injury protection insurance (PIP) system. These fraudsters are now ripping off the system to the tune of $1 billion per year, and we – the law-abiding citizens – pay the price for their misdeeds.
Had enough of this broken system? After almost two decades of battling to protect the interests of Florida’s consumers, I certainly have.
Insurance fraud is nothing new. The Great Depression saw fraud rings targeting auto and workers compensation insurance and staging slip-and-fall accidents in tenement buildings. The 1950s introduced a new scam called “sudden-stop accidents” – the precursor of staged accidents that are now so common in PIP fraud. By 1964 estimates suggested that fraudulent accident claims were inflating insurance costs by $350 million nationally – a staggering sum at the time, but practically pocket change by today’s fraud standards. In 1977, CBS’s relatively new show 60 Minutes devoted a segment to pervasive insurance fraud. That same year the Wall Street Journal estimated that half the cars in Miami were in some way connected to illegal insurance fraud.
So here we are in 2012, with Florida having the dubious “honor” of the No. 1 ranking for auto insurance fraud. The problem isn’t new, and previous attempts to fix it haven’t worked. The question now is, will we come up with a solution that is truly new and effective? Our Legislature needs to address this problem in groundbreaking fashion, or we will simply kick the can down the road – as we have done before.
In a poll conducted last year for the Consumer Federation of the Southeast, more than 90 percent of Floridians supported a crackdown on fraudsters who are robbing our PIP insurance system. These folks realize that it has become open season for dangerous staged accidents, and anyone driving a car is a possible target – especially senior citizens.
This is unfortunate, because our no-fault PIP system was designed to guarantee accident victims $10,000 to immediately take care of injuries and reduce litigation. But that $10,000 has become the brass ring that illicit clinics and sham medical providers keep trying to grasp. Florida Insurance Commissioner Kevin McCarty calls it a contagion. If you’re still not convinced, consider that four of the nation’s top 10 cities for automobile insurance are located right here in Florida.
Top state leaders, including Governor Rick Scott and Chief Financial Officer Jeff Atwater, agree that comprehensive, substantial changes must be made to reverse these alarming and expensive trends. At a time when consumers are still having to watch every dollar, PIP fraud is costing Florida families hundreds of dollars in additional insurance costs every year.
Special interest groups whose members have a financial stake in maintaining the status quo cannot be allowed again to prevent systematic reform. We need reform that once and for all punishes PIP criminals and takes the profit out of a system that now attracts fraudsters like insects to a light bulb.
I am hopeful that our lawmakers will put the consumers’ interests first. Our leaders know that hard-working Floridians don’t have the time or the resources to lobby in Tallahassee like the PIP special interest groups. But individuals can still do their part by going to http://gearupflorida.com and taking a few minutes to learn more about the diverse coalition that is supporting meaningful PIP reform.
Walter Dartland, a one-time Metro Dade Consumer Advocate and former Deputy Attorney General, is executive director of the Consumer Federation of the Southeast.

“Another year brings another challenging budget situation for Florida, and lawmakers are leaving big money on the table,” said Walter Dartland, executive director of the Consumer Federation of the Southeast. “Safety net services for sick and vulnerable Floridians sit on the chopping block. It’s time to end the favored status some cigarette makers enjoy in Tallahassee. A cigarette is a cigarette and, as responsible corporate citizens, Dosal and other non-participating cigarette makers should be willing to do their share to contribute to the well-being of our citizens.”

Dartland, who served as a Deputy Attorney General under Attorney General Bob Butterworth, noted that, according to current fiscal year data from the Florida Department of Business and Professional Regulation, Miami-based Dosal Tobacco  now ranks No. 2 in the Florida cigarette market.

According to the state information, non-settling manufacturers now make up 24 percent of the Florida market. Dartland encouraged lawmakers to consider Senate Bill 1414 by Senator Thad Altman to standardize fees across the tobacco industry and make every company pay for the damage their products do to the health of Floridians.

According to the bill language, the legislation aims to:

• Prevent non-settling manufacturers from undermining Florida’s policy of discouraging underage smoking by offering cigarettes and cigarette tobacco products at prices that are substantially below the prices of cigarettes of other manufacturers.

• Protect the tobacco settlement agreement and its funding, which has been reduced because of the growth of sales of non-settling manufacturer cigarettes, by recouping for the state revenue that is lost because of sales of cigarettes by non-settling manufacturers of cigarettes.

• Provide funding to enforce and administer any legislation relating to non-settling manufacturers.

• Provide funding for any other purpose the Legislature determines.

In the late 1990s, Governor Lawton Chiles and Attorney General Butterworth sued the tobacco industry to recoup health care dollars that the state spends on treating poor, sick smokers. Florida eventually settled with the major tobacco companies and won billions of dollars in payments based on the market share of the companies. Because it had less than 2 percent of the market at the time, Dosal Tobacco Corporation was excluded from the settlement. Over the last decade, Dosal has experienced huge growth and now manufactures nearly 20 percent of cigarettes sold in Florida.

Against Investing in Unvetted Indexed Annuities

~Educators among the top targets of those ensnared by unscrupulous brokers

selling unvetted indexed annuity plans~

2011 — In an era in which budgets are being cut drastically and public employees are being asked to carry a larger burden for their own retirement and healthcare costs, the Consumer Federation of the Southeast today issued a warning to educators to “beware” of purchasing unvetted investment plans.

“America’s educators are being targeted and are increasingly being sold investments that aren’t properly vetted and this can turn out to be a financial disaster for the unsuspecting teacher,” said Walter Dartland, executive director of the Consumer Federation of the Southeast. “Very few people understand what an annuity product is and how much the product costs.”

Indexed annuities are commonly sold to public employees, and in recent years, teachers have increasingly become the target of unscrupulous investment brokers selling funds with exorbitantly high and onerous fees. Dartland added, “Public employees should read, and become educated, about the high costs associated with certain types of indexed annuities before signing on the dotted line.”

Sales of equity-indexed annuities (EIAs) as investments have become increasingly common. The increased availability of funds with unreasonable fees has caused government entities such as the Financial Industry Regulatory Authority, Inc. (FINRA) to issue “investor alerts” to inform those at risk. FINRA’s investor alert cites the complexity of the investments. According to FINRA, “EIAs are anything but easy to understand. One of the most confusing features of an EIA is the method used to calculate the gain in the index to which the annuity is linked. To make matters worse, there is not one, but several different indexing methods.”

Barbara Roper, director of Investor Protection for the Consumer Federation of America, a lobbying group based in Washington, D.C., calls indexed annuities with high fees “one of the most abusively sold products on the market today.”

Recent reports have highlighted the dangers of these types of investments. According to a recent Bloomberg report: “When Helen Siswein, a retired teacher, heard about an investment that might earn 8 percent a year and never lose money, she was sold,” but Siswein struggled to recover her money when she tried to retrieve her investment. According to the story, “It cost Siswein fees of as much as 15 percent of her account balances to get out of the investments five years later, the contracts show. She says one annuity earned an average of about 3 percent a year after the penalty was subtracted, while the index it tracked, the Standard & Poor’s 500 Index, returned 6.3 percent including dividends.”

Many consumers have purchased these types of investments from unsavory investment brokers, who are incentivized to sell them through outrageous commissions and all- expense paid vacations. Unlike mutual funds, rewards for selling these types of funds are not required by law to be disclosed.

The Consumer Federation of the Southeast encourages making investment decisions, only after careful research, including by reading reports from trusted, third-party organizations to verify the validity of investment funds and fees related to them. In Florida, for example, public educators can rely on the Independent Benefits Council (IBC), which is a coalition of the Florida School Boards Association, Florida Association of District School Superintendents, Florida Association of School Administrators and the Florida Education Association. The IBC was formed to protect teachers by educating them and by vetting plans through a trusted process.

For more information about consumer issues and to read other consumer warnings, please visit the Consumer Federation of the Southeast online.

The Consumer Federation of the Southeast is a not-for-profit consumer advocacy group founded in 2003 and dedicated to consumer advocacy in the Southeastern United States. CFSE’s goal is to establish a vigorous, new, pro- consumer agenda built upon public awareness, consumer education and coalition-building.

To view the document as a PDF, click here: EducatorInvestmentWarning

~New survey finds one in three Boomers may move to another state~

SEE MASON-DIXON POLL RESULTS BELOW 

WASHINGTON, D.C. — Where will Baby Boomers go to retire? A revealing new survey shows this massive generation of imminent retirees is looking for a place where taxes and housing costs are low, the climate is good and quality health care is readily available.

Other considerations that are important to Boomers are the availability of diverse recreational activities and supportive senior services, arts and cultural opportunities, proximity to the beach and the availability of life-long learning educational experiences.

That’s the picture painted by the first major survey in 10 years of retirement relocation preferences of the 78 million-strong Baby Boom generation, released today by the Consumer Federation of the Southeast. And it comes just as the first Boomers, born in 1946, reach the age of eligibility for full Social Security retirement benefits.

According to the survey, conducted for the Consumer Federation of the Southeast by Mason-Dixon Polling & Research, a full third of Baby Boomers are open to moving across state lines to find the assets they are looking for, including a mid-size town that welcomes a diverse population.

“Already, thousands of Boomers are retiring every day nationwide,” said Walter Dartland, president of the Consumer Federation of the Southeast. “According to this survey, substantial numbers are interested in relocating in retirement. The decisions they make about where they will retire will have a huge impact not only on their families’ finances but on the communities to which they move.”

As the Boomer generation is so vast, a community need only attract three-tenths of one percent of relocating Boomers to add $1 billion per year in new income to its economy, creating jobs, new business and significant economic opportunities.

“This important survey, one of the most extensive of its kind in a decade, underscores the tremendous contribution that Americans aged 50 and older can offer to communities wherever they choose to live,” said Jeff Johnson, AARP Florida’s interim state director. “AARP Florida believes this research will help inform the efforts of many communities to better equip themselves to address issues important to a 50-plus population.”

The Consumer Federation’s survey of Boomers shows:

-       Some 96 percent say top-quality health care services are “very” or “somewhat” important to them in considering a relocation destination.

-       Affordable housing ranks second, with nearly 92 percent ranking that as a “very” or “somewhat” important criterion.

-       A warm, welcoming year-round climate is “very” or “somewhat” important to 85.5 percent – but a strong plurality of this group want their warm summers to be paired with a few cooler months.

-       Low local taxes are “very” or “somewhat” important to 81.1 percent.

-       Eight out of 10 relocating Boomers are looking for affordable recreational opportunities in a relocation destination, and about the same number seek strong local services for elder care.

Also important to relocating Boomers are the size of the community (seven in 10 prefer a mid-size city or small town); arts and cultural opportunities (very or somewhat important to three in four); beaches or ocean nearby (very or somewhat important to about six in 10), and about half are seeking access to life-long learning educational opportunities. About half say a community that welcomes diversity is very or somewhat important.

-       A large university is a plus for four in 10 Boomers willing to consider relocation.

-       And, more than half (58 percent) plan to buy a house in their retirement relocation destination.

“This survey offers important insights into what is significant to relocating Boomers,” Dartland said. “It underscores that for millions of Boomers who are considering relocating, good value, a welcoming community and thoughtful choices about their future are uppermost in their minds.”

Almost 54 percent of respondents indicated that the weak economy was not delaying their retirement plans. But, about 36 percent of respondents said that the economy had delayed retirement.

Pollsters asked respondents to name — unprompted and with no suggested options — a state they might consider relocating to for retirement. About 18 percent mentioned Florida as a top relocation destination.

The survey, conducted by Mason-Dixon Polling & Research between Nov. 14 and 22, 2011, surveyed 1,100 Americans ages 47 to 65 who said they would relocate in retirement, were considering relocation or weren’t sure. All respondents surveyed lived in the eastern half of the U.S., outside of Florida. The survey carries a margin of error of plus or minus 3 percent.

BABY BOOMER POLL

1,100 adults between the ages of 47 & 65 were interviewed by telephone from November 14 through November 22, 2011 by Mason-Dixon Polling & Research, Inc.  All respondents lived in the eastern half of the country (excluding Florida) and stated they were considering moving to another state when they retired.  The margin for error is +/-3%.

QUESTION: Within how many years are you planning to retire?

                                                 ALL       47-56     57-65

Already retired                              10%         1%        24%

Within next 2 years                    10%         3%        22%

Within 3-5 years                          16%       12%       22%

Within 6-9 years                           25%       23%       30%

10 years or more                           38%       60%        2%

Not Sure (NOT READ)               1%          1%          -

QUESTION: Is the current economy delaying your retirement, or will the economy have no significant effect on when you will retire?

                                                                   ALL       47-56     57-65

Economy delaying retirement                     36%          42%          25%

Economy not delaying retirement              54%          50%         59%

Not Sure (NOT READ)                               10%            8%          16%

QUESTION: Please tell me how important each of the following will be in making a decision about where to retire – very important, somewhat important, or not important?

                                                   VERY IMP    SW IMP    NOT IMP    DK

- Climate                               49%                        36%                 15%             -

- Local Taxes                         49%                      32%                 18%          1%

- Cost of Housing                  55%                       37%                7%            1%

- Recreation Activities               34%                  46%                19%          1%

- Arts & Cultural Activities       26%                 49%                 24%           1%

- Educational Opportunities    19%                  28%                52%          1%

- Services for seniors                   45%                30%                 19%          1%

- Quality of Healthcare               66%               30%                 3%             1%

- Size of the community             20%                48%                31%            1%

- Community’s diversity              25%              38%                  37%             -

- Near the ocean & beaches       31%              28%                  40%           1%

QUESTION: What type of climate would you prefer when you retire?

                                                                               ALL       47-56     57-65

Warm & sunny year round                                         21%          24%          17%

Warm, but with some cooler months                          53%          47%          62%

A four season climate                                                  25%          28%          21%

Cooler climate                                                         1%            1%            -

QUESTION: What type of community would prefer when you retire?

                                                        ALL       47-56     57-65

A large city or metro area        10%          11%            9%

A mid-size city                            40%          37%          44%

A small town                                32%          33%          30%

A rural area                                  17%          18%          16%

Not Sure (NOT READ)             1%            1%            1%

QUESTION: Are you likely to buy a home for your retirement years?

                              ALL       47-56     57-65

Yes                          59%          60          57%

No                          25%          23%          30%

Not Sure               16%          17%          17%

QUESTION: Would you consider having a large university to be a positive factor, a negative factor, or not a factor in determining whether or not to live in a particular community?

                                  ALL       47-56     57-65 

Positive factor     41%           41%          42%

Negative factor     8%          11%            4%

Not a factor          51%           48%          54%

QUESTION: Of the following factors, which one will be most important in determining where you will retire?  What would be the second most important? (ORDER ROTATED)

                                                     1ST CHOICE     2ND CHOICE     COMBINED

Climate                                                   15%                   20%                       35%

Cost of Housing                                   19%                  11%                         30%

Quality of Healthcare                         12%                  15%                         27%

Near the Ocean & Beaches                13%                   9%                          22%

Local Taxes                                          11%                    8%                          19%

Services for Seniors                            10%                   9%                          19%

Recreation Activities                           8%                   7%                            15%

Size of the Community                          8%                  6%                           14%

Arts & Cultural Activities                     1%                   8%                            9%

Community’s Diversity                         –                       1%                            1%

Educational Opportunities                    -                      -                                 -

Not Sure (NOT READ)                   3%                       6%                         9%

QUESTION: When you retire, what will be your primary source of income?

A pension                                 17%

Money you have saved for retirement     23%

Social Security                      18%

Other/Combination (NOT READ)               36%

Not Sure (NOT READ)                         6%

QUESTION: What do you estimate your annual pension income will be?

Will not receive a pension        15%

$<25,000                           16%

$25,000-$49,999                  24%

$50,000-$74,999                  9%

$75,000-$99,999                  8%

$100,000+                          1%

Not Sure/Refused                  27%

QUESTION: Currently, how much would you estimate you have personally saved for your retirement?

<$100,000                          39%

$100,000-$249,999                 14%

$250,000-$499,999                 7%

$500,000+                          14%

Not Sure/Refused (NOT READ)          26%

DEMOGRAPHICS:

AGE:           47-56          690 (63%)         

57-65          410 (37%)

EDUCATION:

High School (or less)               200 (18%)

Some College/Technical Program     282 (26%)

College Graduate                 361 (33%)

Graduate Degree                   257 (23%)

INCOME:

<$25,000                 136 (12%)

$25,000-$49,999        151 (14%)

$50,000-$74,999        237 (22%)

$75,000-$99,999        118 (10%)

$100,000+                288 (26%)

Refused                  170 (16%)

RACE/ETHNICITY:

White/Caucasian          864 (79%)

Black/African American     154 (14%)

Hispanic/Latino          70  (6%)

Other/Refused            12  (1%)

SEX:              

Male            535 (49%)

Female         565 (51%)

REGION:  

Northeast      413 (37%)

Midwest        347 (32%)

South          340 (31%)

Critic Faults FDA for Tardy Warning on Simvastatin Risk

By Richard Knox

Thu., June 9, 2011 12:30pm (EDT) 

The fact that 80 daily milligrams of simvastatin (brand name Zocor) can cause serious muscle damage has been known for years. So why did it take the Food and Drug Administration so long to tell doctors and patients they should avoid that dose?

The answer reveals a lot about the FDA’s reluctance to restrict use of a popular drug much less move to take it off the market even when there are safer alternatives.

The FDA on Wednesday said use of the 80 milligram dose of simvastatin should “be sharply curtailed because of the risk of muscle injury.” The agency says doctors should avoid starting patients on that dose, too, though patients who’ve been on it for a year or more without problems can continue.

Cardiologist Steven Nissen of the Cleveland Clinic, one of the FDA’s most persistent gadflies, says the label change is too little and far too late.

“Most knowledgeable experts were very worried about this dose of the drug,” Nissen told Shots. “I stopped prescribing it in 2004. Here we are, seven years later, and they’re finally getting around to restricting it.”

The stakes are high. Simvastatin is the second-most prescribed drug in the U.S. and by far the most widely prescribed cholesterol-lowering drug. Doctors write more than twice as many prescriptions for it as for Lipitor (atorvastatin, generically). The FDA says 2.1 million Americans take the 80-mg dose of simvastatin.

The risk of this dose is unusually clear.

Almost a decade ago, the FDA required a label change on 80-mg simvastatin warning that interactions with other common drugs could cause a muscle condition called rhabdomyolysis, which can cause kidney failure and death.

Then in 2004, a large randomized study called the A to Z Trial found a higher rate of muscle damage, including rhabdymyolysis and a less severe form, among patients on the 80-mg dose of simvastatin. Other, smaller studies were pointing the same way.

Four years later, in late 2008, an even larger study called SEARCH found 53 cases of muscle damage among 6,000 patients on 80-mg simvastatin, versus three cases among the 6,000 patients on a 20-mg dose.

The accumulating evidence eventually prompted the FDA to analyze reports it gets, on a voluntary basis, in its Adverse Event Reporting System.

Dr. Amy Egan, the FDA’s deputy director for safety in the division that deals with statin drugs, tells Shots that about half the 148 reports of death from rhabdomyolysis were among patients taking 80-mg simvastatin a danger signal, since simvastatin makes up 31 percent of statin use.

Egan acknowledges the process leading up to this week’s restriction on the drug has been slow.

“There’s been criticism as to why this took so much time,” Egan says. “But basically we had to go back to the statin sponsors and have them submit additional data from their large clinical trials.” Six companies market statin drugs.

Nissen says the agency should have taken 80-mg simvastatin off the market years ago, since there are safer alternatives.

But Egan says the FDA didn’t want to do that.

“We have been working with the sponsor (Merck) the past several months to come up with a plan that would allow us to keep the 80-milligram dose on the market so we would not disrupt the care of patients taking that dose,” Egan says.

Interestingly, the argument came down to the cost of the drug.

“While we cannot factor costs into our decision, this is the cheapest and most potent generic statin available,” Egan says. “We’re talking about four cents a day versus $1.20 a day. So for people who pay for medications on their own, those people would be certainly disadvantaged and may have to stop their statins. And we felt the public health impact of that was certainly worse than leaving the drug on the market.”

But that calculus is about to change. Generic Lipitor will become available in November.

And no study has suggested that patients who need high-dose atorvastatin to meet their cholesterol goal are at any risk of muscle damage.

Nissen says simvastatin’s low cost is what has kept many people on it, despite the accumulating evidence of risk. “It has been pushed very hard by pharmacy benefit managers as a means to save costs,” he says.

The FDA says it will monitor use of 80-mg simvastatin over the coming year to see if the new label change really does limit its use. Egan says the agency doesn’t know how many people have been taking it for less than a year, or “how many people out there are walking around with symptoms” of muscle damage.

Copyright 2011 National Public Radio. To see more, visit http://www.npr.org/.

“I am proud to stand with the Attorney General to introduce legislation that will further protect consumers who purchase timeshare properties in Florida and later lose their money due to fraudulent resale practices,” stated Senate Majority Leader Andy Gardiner.

“Timeshare properties are a vital part of Florida’s tourism and resort industry. People who purchase these properties should be protected from the misleading and deceptive practices being used by dishonest timeshare resale companies,” said Representative Eric Eisnaugle.

The most common complaints include: false claims that a specific buyer is ready to buy or rent the property once the consumer signs a contract; deceptive claims that property will sell or rent within a certain time; failure to honor stated-cancellation policies, including refunds of fees; and misrepresentations of the actual services provided to consumers.

The proposed legislation including the following provisions:

• A timeshare resale advertiser may not misrepresent a pre-existing interest in the owner’s timeshare.
• A timeshare resale advertiser may not mislead a customer as to the success rate of the advertiser’s sales.
• A timeshare resale advertiser may not provide brokerage or direct sale services.
• A timeshare resale advertiser must honor a cancellation request made within 7 days following a signed agreement.
• A timeshare resale advertiser must provide a full refund by a timeshare owner within 20 days of a valid cancellation request.
• A timeshare resale advertiser must not collect any payment or engage in any resale advertising activities until the timeshare owner delivers a signed written agreement for the services.
• A timeshare resale advertiser must also provide a full disclosure statement printed in bold type, with no smaller than a 12-point font, and printed immediately preceding the space provided for the timeshare owner’s signature.
• A timeshare advertising agreement must be put in writing.
• A company who violates these provisions has committed a violation of the Unfair and Deceptive Trade Practices Act with a penalty not to exceed $15,000 per violation.

August 12, 2011

Health insurers are increasingly charging patients sharply higher amounts for the most expensive drugs, often causing sticker shock for the sick people who need them.

Health plans that have hiked co-payments say affected patients must pay hundreds of dollars more per month for drugs that can cost thousands, in order to prevent big jumps in premiums for everyone else.

But patients and their advocates say the practice discriminates against people who are unlucky enough to have a disease that is expensive to treat, and forces some to stop taking life-saving medicine. Three reports out this month say the practice can devastate patients financially.

Florida has been hit hard, with its large population of seniors and a high proportion of younger patients with HIV, hepatitis, kidney disease and other chronic conditions that are treated with expensive medicines. One estimate says 12 percent of Florida prescriptions — and growing — are affected by the cost hikes.

Randall Rabbitt, a Delray Beach sales manager for an auto warranty firm, felt the co-pay shock. He had been paying $50 a month for Actemra, an intravenous drug for the crippling effects of rheumatoid arthritis, in which the body’s immune system attacks his joints. Then in June, with no notice, the insurer raised his share to $498.

“I scraped up the money. But I’m not in position to pay $498 a month,” Rabbitt said. “That’s on top of the $632 a month we pay for the premium. My family can’t afford that. I may have to stop taking it.

“If I’m not on this, I literally have severe neck pain every day, to the point where I can’t lift my head. My hips and ankles, I can’t walk,” Rabbitt said. “It makes all the difference between being able to do something or not. I’d have to go on disability and then what life would I have?”

What happened? The PPO at his job moved the drug into a “specialty tier,” a co-pay class typically reserved for pills and IV drugs costing more than $600 a month — such as Rabbitt’s Actemra at $1,100 to $2,100 a month.

Rather than a set co-pay of $5 to $100 a month, specialty tiers require patients to pay “co-insurance” of typically 25 percent to 33 percent of the total cost. A patient taking the hepatitis C drug Pegasys costing $2,400 a month could face co-insurance of $600 to $800.

Many specialty drugs needed lengthy or technology-heavy research to bring them to market or are developed from blood or biological products, all of which can be costly. Affected diseases include multiple sclerosis, the digestive disorder Crohn’s disease and hemophilia. The most expensive drug in the nation last year was the IV blood-disease drug Soliris, at a cost of $400,000 a year.

Specialty tiers — called tier 4 — were rare until Medicare started prescription drug coverage in 2006. The government allowed drug plans to use the high-price tiers as a way to hold down costs and monthly premiums. Today, 85 percent of Medicare plans have them.

Other health insurers and employers that offer coverage now are following suit. About 13 percent of employees last year were covered by plans with specialty tiers, up steadily from just 3 percent in 2004, according to the research group Kaiser Family Foundation.

In Florida, 12 percent of prescriptions in 2008 were from tier 4, and the number has grown since then, according to research by the nonprofit patient group Alliance for Biotherapeutics. That’s about average, nationally.

“I don’t think it’s a fad. It will just keep growing, said Debra Lage, executive senior director at Mahoney & Associates in Fort Lauderdale, which advises employers about benefit plans. “Companies are trying to save money.”

Insurers and employers need to act because more illnesses are being treated with high-cost biological drugs that work better than older pills, driving up costs for insurers and employers, said Robert Zirkelbach, press secretary for America’s Health Insurance Plans, which represents insurers.

“They’re trying to strike a balance. You want to have plans that are affordable but still give consumers access to the drugs they need,” Zirkelbach said.

Aetna and most employers that buy its coverage cushion the blow by setting a maximum on the patient’s monthly share, said Walt Cherniak, an Aetna spokesman. Modest-income patients also may qualify for discounts from drug manufacturers.

But despite all that, patients still take a big hit if their drugs go on tier 4, advocates said. Rabbitt’s insurer may agree to limit his share to $250 a month, but that’s still a five-fold increase.

He previously had tried a half-dozen other drugs, all of which worked for a while and then failed. He did well on a drug called Enbrel, but it’s also on tier 4 now and even more expensive.

Three reports this month — from the patient advocate groups National Minority Quality Forum and National Health Council and one sponsored by drugmaker Pfizer Inc. — found that specialty tiers financially disrupt and confuse patients. Kaiser reported that on average, patients taking tier 4 drugs shoulder 36 percent of the cost, 72 percent in HMOs.

New York last fall banned insurers from having specialty tiers, Vermont imposed a one-year moratorium. A bill is being written in Congress for a national ban. Five states are studying the problem and bills are being debated in 10 other states, said Michelle Vogel, executive director of the biotherapeutics alliance.

Advocates are trying to craft a bill for Florida that won’t cost the state any money. Vogel doubts the Republican-led state Legislature would ban tier 4, but they hope the state may set a maximum on patients’ payments or halt insurers from raising co-pays except at annual renewal time.

“We need action,” said Rabbitt’s arthritis specialist, Dr. Phillipe Saxe, who has patients who stopped taking tier 4 drugs. “People are paying for insurance to cover their catastrophic illnesses, and then it doesn’t cover anything.”

blamendola@tribune.com or 954-356-452

“The widespread abuse of prescription drugs is a serious problem facing communities throughout the southeastern United States,” said Dartland. “Health providers can be important partners in helping reduce the spread of abuse while ensuring the legitimate health needs of consumers and patients are met.

Dartland also added that, “creative solutions that benefit consumers and patient care, such as compound pharmacies, are part of positive new evolutions in health care.”

He urged more health care providers to take additional steps to reduce prescription drug abuse by using innovative techniques in pain management as alternatives to prescribing highly addictive pain medication.

One such company, Compound Care Pharmacy, based in Alabama, is meeting its patients’ needs by formulating customized medications tailored to meet each individual’s unique characteristics. In an effort to reduce dependence on highly addictive medications such as Oxycontin, Percocet and Vicodin, in appropriate cases, the company is customizing prescriptions in a topical form instead of pill form.

“As a provider of compounded medication and prescription drugs to many patients, we are sensitive to the widespread abuse of prescription drugs and are working to offer a range of treatment options that meet our patients’ unique needs,” said Ashley Hammond, R.Ph., owner, president and supervising pharmacist of Compound Care Pharmacy. “The flexibility provided to our patients through Compound Care is a model more pharmacies can use to improve the delivery of prescription drugs and help reduce abuse around the nation.”

There are only a handful of compound pharmacies that have received a seal of accreditation from the Pharmacy Compounding Accreditation Board ,Aei which administers a new system of standards created by some of the leading organizations in pharmacy.

Compounded medications are prescriptions that are written by physicians and other legally authorized prescribers and prepared for an individual patient by a specially trained pharmacist.

“Compounding medications have been a very useful addition to our practice. Not only does it allow us to combine medications we know will be effective, it delivers them directly to the site with much fewer side effects and drug interactions,” said J. Michael Burdine, MD., founder of The Spine Diagnostic & Treatment Center in Louisiana. “There is a broader margin of patient safety and I have never seen a reported case of diversion of compounded preparations.”

Compound prescriptions are provided to children who need smaller doses of medicine, to patients who cannot tolerate certain ingredients in manufactured medicines or to seniors who metabolize medications differently.

Prescription drug abuse is the nation’s fastest-growing drug problemaccording to the Office of National Drug Control Policy. The report also emphasizes the need for policies that “strike a balance between our desire to minimize abuse of prescription drugs and the need to ensure access for their legitimate use.”

Like Florida, Ohio has recently strengthened laws to prevent and reduce prescription drug abuse. A new law, HB 93, increases the state’s oversight of physicians who prescribe addictive, insurer-paid drugs. The bill includes stringent license requirements for pain clinics, fines for clinics operating improperly of up to $5,000, fines for doctors providing improper care of up to $20,000 and requires clinic job applicants to pass a criminal background check.

The CFSE urges consumers to educate themselves about viable options, such as compound pharmacies, when in need of prescription pain medications and they should ensure the provider is fully accredited. For more information about accredited compound pharmacies, please visitwww.pcab.info.

The Consumer Federation of the Southeast is a not-for-profit consumer advocacy group founded in 2003 and is dedicated to consumer advocacy in the southeastern United States. CFSE’s goal is to establish a vigorous, new, pro-consumer agenda built upon public awareness, consumer education and coalition-building.