government

CMS correct in stopping Humana anti-health reform bill letters, GAO says

The insurer warned 930,000 beneficiaries in its Medicare Advantage plans that health system reform could hurt them.

By Chris Silva — Posted Oct. 27, 2010

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The Centers for Medicare & Medicaid Services acted within its power when it directed Humana last year to immediately halt all communications to beneficiaries about the potential impact of health system reform on Medicare Advantage plans, the Government Accountability Office said in a September report.

Humana sent letters in August and September 2009 to about 930,000 beneficiaries enrolled in its Medicare Advantage plans, stating that health reform proposals could adversely affect them. The letters, signed by the insurer's chief medical officer, stated that if proposed funding cuts became law, "millions of seniors and disabled individuals could lose many of the important benefits and services that make [Medicare Advantage] health plans so valuable." The letters encouraged beneficiaries to contact their members of Congress and protect the plans' funding.

CMS, at the urging of Senate Finance Committee Chair Max Baucus (D, Mont.), directed Humana on Sept. 21, 2009, to stop its communications to seniors about Medicare Advantage plans while it investigated whether the insurer was violating any laws.

GAO said that because Medicare Advantage organizations are Medicare contractors, communications to beneficiaries must comply with certain requirements, including marketing guidelines and restrictions on the use of beneficiary information obtained from CMS databases.

"In general, CMS' handling of [Medicare Advantage] communications on pending health reform legislation appeared to adhere to the agency's policies and procedures," GAO wrote in the September report (link).

GAO examined CMS' actions at the request of Reps. Joe Barton (R, Texas); Michael Burgess, MD (R, Texas); and Greg Walden (R, Ore.).

Citing overpayments with the program, the health system reform law calls for reductions to Medicare Advantage of more than $100 million during the next 10 years.

Humana said in a statement that this "will have a negative impact on the popular program by limiting choices for people with Medicare." Last fall, "Humana let its [Medicare Advantage] members know that cuts of this magnitude would likely result in reduced MA benefits beginning in 2012, when the cuts are scheduled to begin to take effect."

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