WASHINGTON, Nov. 26 — Early this year, while top Bush administration officials were boasting about the success of the new Medicare drug benefit, a middle-level manager named Abby L. Block held a telephone conference call with insurance companies.

“We have a real crisis situation looming here,” Ms. Block told the insurers, noting that many Medicare beneficiaries had been unable to fill prescriptions at their pharmacies. “We truly cannot let this situation go on much longer. I cannot stress enough how urgent this is.”

Ms. Block, a 75-year-old civil servant, is director of the Center for Beneficiary Choices at the federal Centers for Medicare and Medicaid Services. While some officials toured the country as cheerleaders for the drug benefit, Ms. Block stayed at her desk in Washington and made it work.

She solved many problems that plagued the program in its first weeks, when low-income people were often overcharged and some were turned away from drugstores without getting their medications. By September, according to several market research firms, three-fourths of the people receiving drug coverage through Medicare said they were satisfied.

Dr. Mark B. McClellan, former administrator of the Centers for Medicare and Medicaid Services, said that recruiting Ms. Block had been one of his priorities after he took charge of Medicare in the spring of 2004. “No one on the planet has as much experience providing access to a full range of health plan choices under a government program,” Dr. McClellan said.

For 25 years, Ms. Block had worked at the federal Office of Personnel Management, running the health insurance program for federal employees. Despite some criticism, the federal employee program is generally popular with government workers, and Congress used it as a model for Medicare’s drug benefit.

Janice R. Lachance, who was director of the personnel agency under President Bill Clinton, said: “Abby is the ultimate public servant. I don’t know her politics. I was always very careful not to ask.”

“When Abby took the Medicare job,” Ms. Lachance said, “many wondered why she would do this at her age, when most people are going off into retirement. That’s who she is. If there’s a big, thorny problem, Abby wants to be part of the solution.”

If Congress directs Medicare to negotiate with drug companies and seek lower drug prices, pharmaceutical executives could find themselves dealing with Ms. Block, as insurers already do.

The Federal Employees Health Benefits Program is, in effect, a supermarket through which more than 280 private health plans are offered to more than eight million federal employees, retirees and dependents.

Many insurers, like Humana, participate in Medicare and the federal employee program. They respected Ms. Block, so when she expressed alarm about the operation of Medicare’s drug benefit, they paid heed.

“We called on the plans to take extraordinary steps to meet the needs of beneficiaries,” Ms. Block said in an interview.

The government told insurers they must provide a temporary supply of any prescription that a person was taking prior to the start of the Medicare drug benefit on Jan. 1. The transition period was originally 30 days, but when problems persisted, Ms. Block extended it through March 31.

“When I was at the Office of Personnel Management,” Ms. Block said, “I viewed myself as a purchaser, like any other employer buying health insurance for its employees. Congress set up the program to offer choice. We never had standardized benefits. People could choose a plan that met their needs.

“In the federal employee program,” Ms. Block said, “the primary focus is to get the best deal for federal employees and retirees. In Medicare, the primary focus is to get the best deal for beneficiaries. The key, I think, is to treat the plans as partners, rather than adversaries, and to establish a mutual goal. This is a business relationship.”

That represents a radical change. For 40 years, Medicare has been a regulator and a payer but has not been seen as a reliable business partner.

Some observers suggest that the government may be too cozy with insurers, in Medicare and in the federal employees’ health program.

Jacqueline Simon, policy director at the American Federation of Government Employees, a union representing 600,000 federal workers, said Ms. Block could have obtained better benefits at lower cost had she taken “a more adversarial position” in negotiating with insurers.

“Our impression is that she was very indulgent and very inclined to let them have their way,” Ms. Simon said.

If Ms. Block has an aptitude for insurance, she may have inherited it. She grew up in Brooklyn and in Merrick, N.Y., on Long Island. Her father, Irving Barbanell, was in the insurance business.

A first cousin, Alexander S. Barbanell, recalled recently that her father “sold life insurance and went door to door collecting premiums of 25 to 50 cents a week in the Depression.”

Alexander Barbanell’s wife, Gloria Feldt, a former president of the Planned Parenthood Federation of America, said: “I related to Abby as one feminist to another. We both had to assert our abilities at a time when our society did not welcome women as executives.”

At the Medicare agency, Ms. Block’s job is ordinarily held by a political appointee, but she is a civil servant, a member of the Senior Executive Service.

“Sometimes a career civil servant can do the job better than a political appointee,” said Kay Coles James, who directed the Office of Personnel Management from 2001 to 2005.

Behind her desk, Ms. Block has several busts of Theodore Roosevelt, a champion of the Civil Service. She received them for outstanding performance in her prior job.

Medicare drug coverage, like health benefits for federal employees, is offered through private plans. But Medicare beneficiaries are, on average, older, sicker and more vulnerable. Insurers are more tightly regulated under Medicare, which has a much higher political profile than the federal employee program.

The 2003 Medicare law says that Medicare officials can negotiate with insurers on the “terms and conditions” of the drug benefit, just as the government negotiates with insurers on behalf of federal employees.

But it appears that Medicare has made only limited use of this authority in the first year of the drug benefit. “Under Medicare,” Ms. Block said, “some negotiations do occur, but there were only a few situations where the final price was different from the bid price.”

More than half of federal employees are in Blue Cross and Blue Shield.

Stephen W. Gammarino, senior vice president of the Blue Cross and Blue Shield Association, said: “What’s impressive about Abby is that she listens. She really wants to understand the industry she’s working with. She does not assume that the government always knows best. She sets out her expectations. How plans get there is less important to Abby than the overall objective, which is to provide better value and better service for beneficiaries.” Source: NY Times

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