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Akron Univ. School of Law

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Sunday, October 7, 2007

Medicare Cheats

The New York Times has a front page story about some problems in the administration of the Medicare Part D program.  It reports,

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 article discusses some typical problems found in the audits:

¶UnitedHealth, which serves more than six million Medicare beneficiaries, did not have an “effective program” to supervise its marketing representatives, agents and brokers. In some cases, United improperly denied claims without giving any explanation to beneficiaries. Peter L. Ashkenaz, a company spokesman, said, “We terminated a few agents and brokers for misrepresenting our products.”

¶WellPoint, one of the nation’s largest insurers, had “a backlog of approximately 354,000 claims” at certain Medicare plans offered through its UniCare subsidiary. The company’s call center took an average of 27 minutes to answer phone calls from its members and 16 minutes to answer calls from health care providers. More than half the callers hung up before speaking to a company representative. Karen Brown, a spokeswoman for WellPoint, had no immediate comment.

¶In March, Sierra Health Services ended drug coverage for more than 2,300 Medicare beneficiaries with H.I.V./AIDS, saying they had not paid their premiums. In many cases, the premiums had been paid, and beneficiaries had canceled checks to prove it. Sierra initially refused to reinstate them, but eventually agreed to do so after repeated requests from federal officials. Peter O’Neill, a vice president of Sierra, said this particular drug plan, which attracted people with very high drug costs, would not be offered in 2008.

¶Humana, which covers more than 4.5 million people on Medicare, promised to investigate every complaint about its marketing practices, but it received so many complaints that it could not keep up. Many beneficiaries said they had received incorrect information from Humana agents. Medicare officials said some agents had not been adequately trained or supervised. Thomas T. Noland Jr., a senior vice president of Humana, said the company had taken “corrective action to improve the situation.”

¶Humana did not always tell beneficiaries about changes in its list of covered drugs. In some cases, Humana did not explain its reasons for denying claims and did not inform beneficiaries of their appeal rights.

¶The Sterling Life Insurance Company, a subsidiary of the Aon Corporation, did not pay claims correctly or handle appeals in a timely way. The company has “a demonstrated pattern of failure” to meet Medicare performance standards. Problems were compounded by a rapid growth in enrollment. Sterling said it had taken steps to improve compliance.

¶Two sponsors of popular Medicare drug plans, MemberHealth and Bravo Health, did not act on requests for coverage of specific drugs within 72 hours, as required by the government. Bravo did not comply with federal rules requiring doctors to review all claims denied for a “lack of medical necessity.”

Chris in Paris, writing at Americablog asks a good question, "Why are these companies even allowed to continue doing business with the US government? If they are cheating the US government and cheating their customers, cut them off completely. Let them round up business elsewhere, but of course, they love working with the government and raking in government money so they won't be going anywhere. They all may talk about the fear of national health care, but in a hybrid public-private system (as in France) they do just fine and still make healthy profits. Cut these companies out of government contracts for five years,  . . . make it two or even one year, and let's see how they react. I'd be able to hear the screaming and crying all of the way over here in Paris. If only someone would stand up to these America-hating businesses."

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