A move by federal officials and the health insurance industrys largest lobbying group to essentially self-regulate how some of its wealthiest members run their Medicare Advantage plans has come under attack. Critics charge that the groups want to pull an end-around on Capitol Hill in order to stave off much stricter legislation already being drafted.
On June 15, CMS officials, followed closely by Americas Health Insurance Plans, announced that they had signed agreements with Blue Cross and Blue Shield of Tennessee, Coventry Health Care, Humana, Sterling Life Insurance Co., UnitedHealth Group, Universal American Financial Corp. and WellCare Health Plans that require them to bolster training programs for brokers, agents and in-house marketers who sell Medicare Advantage private fee-for-service plans, or PFFS.
Taken together, their plans represent 90% of the 1.3 million Medicare beneficiaries enrolled in private fee-for-service plans, raising questions for some about whos in charge. A key question to ask is: Does CMS regulate insurance companies or does the insurance lobby regulate CMS? said Robert Hayes, president of the Medicare Rights Center, a national consumers service organization, hinting that its much more the latter than the former.
Hayes said that most insiders recognize that the initiative was the brainchild of the insurance lobby. He said the center handles loads of complaints from beneficiaries who got duped into enrolling in a PFFS plan. We are routinely trying to bail out the people who come to us after being tricked into a plan that does not cover their health needs, he said.
At deadline, the CMS had not returned phone calls seeking comment.
For some lawmakers, the cozy relationship between the federal agency and AHIPa side effect of the melding between private plans and the government-run programfalls far shy of what Congress would have them do.
The Bush administration and private health plans have finally acknowledged part of the problem, but they continue to refuse to be a meaningful part of the solution, said Rep. Pete Stark (D-Calif.), chairman of the House Ways and Means Health Subcommittee. Stark is a longtime critic of Medicare Advantage. The administrations response is to allow private companies to determine which crimes theyll plead to and which sentences theyll serve. This will do virtually nothing to protect Medicare beneficiaries and is a pathetic attempt to pre-empt congressional action.
Legislative sources in both the House and Senate have said that efforts are under way to draft bills that would, at least in part, impose stricter sales and marketing guidelines for the companies that deal in PFFS plans, which account for $13 billion in Medicare spending, according to the Congressional Budget Office. The Energy and Commerce Oversight and Investigations Subcommittee has scheduled a hearing for June 26.
The issue of unscrupulous sales and marketing practices first came to light during a May 16 hearing of the Senate Special Committee on Aging. Some of the most severe charges centered on allegations of questionable sales practices, such as sales agents removing seniors from traditional Medicare without their knowledge, signing seniors up for plans they could not afford or a general campaign of misinformation meant to steer seniors away from traditional Medicare and into the more lucrative Medicare Advantage PFFS plans.
Wisconsin State Insurance Commissioner Sean Dilweg, who also chairs the National Association of Insurance Commissioners Senior Issues Task Force, has said 37 states have gotten complaints about inappropriate or confusing marketing practices that led Medicare beneficiaries to enroll in a Medicare Advantage plan.
Twice now, AHIP and the CMS have seemingly acted in concert. Only hours prior to the meeting in May, AHIP announced that it had hashed out a self-policing agreement requiring its members to more closely train and monitor their contracted sales force. The CMS, too, announced new initiatives that targeted the PFFS plans. In both instances, the groups made it clear that the overwhelming majority of sales agents do uphold the standards set out in the Medicare marketing guidelines.
Weeks later, the CMS and AHIP again closely followed each other, this time in announcing the agreements between the plans that led to the moratorium on the marketing of PFFS plans.
AHIP Spokesman Mohit Ghose, however, said the move is less about politics and more about doing the right thing. Thats why were doing this, he said. Were not looking at hearings or what may or may not happen on Capitol Hill. The timing issue is not something we are looking at from a political standpoint.
Instead, he said, the AHIP rules are rooted in having the plans take very quick and immediate corrective action thats needed to address the concerns that have been raised by Medicare beneficiaries, advocacy groups and others.
But to longtime industry observers, the call from AHIP and its members to self-regulate hearkens back to 2001. Thats when the two groups that eventually would merge to form AHIP spent more than $10 million to lobby members of Congress to ensure that favorable provisions were included in that years so-called Patient Protection Act.