Medicare risk plans, along with HCFA, took it on the chin last week when a government review of the benefit information that 16 Medicare HMOs provided to seniors found that all the plans had distributed "inaccurate or incomplete" information.
The information was included in materials such as brochures, policy booklets, member handbooks and letters to beneficiaries about benefit changes, according to a General Accounting Office report to Congress.
Almost half the plans surveyed distributed inaccurate information about benefit coverage and the need for provider referrals, the GAO reported.
The congressional watchdog agency said HCFA had not detected the errors, because of shortcomings in HCFA's review process. Problem areas included limitations in the documents HCFA reviewers use to check the accuracy of HMOs' marketing materials, the lack of standard terminology and content in those materials, and HCFA's failure to ensure that errors were corrected.
According to the GAO report, five of the managed-care plans the agency reviewed told beneficiaries they needed a physician referral to get an annual mammogram, even though Medicare prohibits health plans from requiring a referral for that test.
Another health plan marketed a prescription drug benefit that was "substantially less generous" than what its contract with Medicare had said the plan would provide.
In addition, beneficiaries frequently did not receive important information until after they enrolled in a plan, the study found.
About 7 million Americans, or 18% of Medicare's 39 million beneficiaries, are covered by managed-care plans.
In response to the GAO's findings, Sen. John Breaux (D-La.) called on HCFA to step up efforts to protect Medicare beneficiaries from unfair or inadequate marketing practices by Medicare managed-care plans.
"The federal government needs to ensure that Medicare beneficiaries are put first and that Medicare+Choice plans present clear, accurate information that will help older Americans make informed decisions about their healthcare," said Breaux, a ranking member of the Senate Special Committee on Aging, which held a hearing on the report last week.
In testimony to the committee, Carol Cronin, director of HCFA's center for beneficiary services, agreed that her agency had not adequately addressed marketing abuses by managed-care plans.
She promised to tighten and standardize the review process and "send a loud and clear message" to the industry that HCFA is taking enforcement seriously.
Some of those steps are already under way, Cronin assured the committee.