Complaints force suspension of marketing for some Medicare plans

Some physicians and beneficiary advocates say the move is a smokescreen to mask serious problems with private fee for service.

By David Glendinning, AMNews staff. July 9, 2007.

Washington -- Bowing to widespread outrage at recent allegations of abuses and illegal behavior, insurers sponsoring Medicare private fee-for-service plans have agreed to stop marketing them temporarily. Insurers say they'll use the time to work on making their sales agents compliant with federal rules and explaining the products more thoroughly to patients and doctors.

Some physicians and patient advocates are worried that the action does not go far enough.

BlueCross BlueShield of Tennessee, Coventry Health Care Inc., Humana Inc., Sterling Life Insurance Co., UnitedHealth Group, Universal American Financial Corp. and WellCare Health Plans Inc. independently have agreed to the voluntary suspension. Together, these companies have handled about 90% of the enrollments in Medicare private fee for service.

Officials at the Centers for Medicare & Medicaid Services, which coordinated the marketing hold, said the insurers' move would give firms the chance to get all agents completely in line when selling this alternative to traditional Medicare. Agents have been accused of such abuses as signing up seniors without their permission and misleading beneficiaries and physicians about how plans operate.

The suspension will continue for each insurer until it can demonstrate to the Medicare agency that it is meeting six federal requirements on plan marketing and sales. The firms must meet the requirements no later than Oct. 1, in advance of the November open enrollment period for established Medicare patients.