Audits Verify Problems With New Medicare Plans

The New York Times reviewed 91 audit reports which show problems in the plans created by George Bush’s Medicare plan:

Tens of thousands of Medicare recipients have been victims of deceptive sales tactics and had claims improperly denied by private insurers that run the system’s huge new drug benefit program and offer other private insurance options encouraged by the Bush administration, a review of scores of federal audits has found.

The problems, described in 91 audit reports reviewed by The New York Times, include the improper termination of coverage for people with H.I.V. and AIDS, huge backlogs of claims and complaints, and a failure to answer telephone calls from consumers, doctors and drugstores.

Medicare officials have required insurance companies of all sizes to fix the violations by adopting “corrective action plans.” Since March, Medicare has imposed fines of more than $770,000 on 11 companies for marketing violations and failure to provide timely notice to beneficiaries about changes in costs and benefits.

The companies include three of the largest participants in the Medicare market, UnitedHealth, Humana and WellPoint.

The audits document widespread violations of patients’ rights and consumer protection standards. Some violations could directly affect the health of patients — for example, by delaying access to urgently needed medications.

The more serious problem I’ve seen has come from dishonest marketing of Medicare Advantage plans. Under these programs private insurance companies receive huge subsidies to care for Medicare patients at a higher cost than under the government’s Medicare program despite cherry picking the healthier patients. Rather than being used to provide benefits to beneficiaries, the money is largely used to increase corporate profits at the taxpayers’ expense. This provides considerable motivation to deceive seniors into joining the plans:

The same insurance companies that offer stand-alone drug plans also sell Medicare Advantage plans, which provide a full range of benefits including coverage of doctor’s visits and hospital care. Enrollment in Medicare Advantage plans has grown rapidly, to more than 8 million, from 4.7 million in 2003. Federal auditors found the same types of violations in both parts of the program.

Of the audits conducted by the Department of Health and Human Services, 39 focused on drug benefits, 44 focused on managed care plans and 8 examined other types of private plans.

Medicare officials said that compliance problems occurred most often in two areas: marketing, and the handling of appeals and grievances related to the quality of care.

I have found it to be quite common for patients to be signed up in Medicare Advantage plans with no understanding that they have changed their coverage from Medicare to a private plan. Many wind up with less coverage than they had under Medicare and higher out of pocket expenses. They commonly say they were told that the plans were simply things to add to their Medicare coverage, as opposed to replacing it, which would save them money. The investigations have verified that such dishonest sales tactics are widespread.

Representative Bart Stupak, a Michigan Democrat who is chairman of the investigations subcommittee of the House Energy and Commerce Committee, said he had “verified countless stories of deceptive sales practices by insurance agents who prey upon the elderly and disabled to sell them expensive and inappropriate private Medicare plans.”

Kathleen Healey, a lawyer at the Alabama Department of Senior Services, said: “Despite the prohibition of door-to-door marketing, agents arrive on residents’ doorsteps stating that the president sent them, or that they represent Medicare. Some telemarketers insist they are calling from Medicare, and they tell beneficiaries that they will lose their Medicare if they do not sign up for the telemarketer’s plan.”

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