CMS Puts Kibosh on Reform Mailings

Letters from Medicare Providers to Beneficiaries Forbidden

Debate over national healthcare reform continues, and private health plans contracting with the Centers for Medicare & Medicaid Services (CMS) are facing new restrictions on the type of information they can provide to their beneficiaries. After mailing a letter informing Medicare health plan members about possible consequences of proposed healthcare legislation that includes reductions in funding for Medicare Advantage, Humana Inc was ordered by CMS to stop its mailing, and other Medicare providers were instructed to refrain from disseminating similar materials. Although CMS asserts that Humana may have inappropriately used lists of Medicare enrollees for unauthorized purposes, insurers say the gag order prevents them from telling seniors how proposed legislation could affect their benefits.

The Humana mailer was sent to beneficiaries in August and September, a time of intense debate over healthcare reform. The letters stated that reform proposals being considered in Washington, DC, include billions of dollars in Medicare Advantage funding cuts, as well as spending reductions to original Medicare and Medicaid, and could result in a reduction of benefits. Recipients were asked to join Humana’s Partner program, which provides information on proposed Medicare changes, and to tell their congressional representatives why Medicare Advantage is important to them.

The passage that received the most criticism stated that although the efficiency of Medicare Advantage programs needs to be improved, “if the proposed funding cut levels become law, millions of seniors and disabled individuals could lose many of the important benefits and services that make Medicare Advantage health plans so valuable.”

On September 18, CMS’ Medicare Drug and Health Plan Contract Administration group informed Humana that CMS was investigating their communications and instructing them to end all mailings to beneficiaries and remove any related materials from their Web site. Humana agreed to discontinue the mailings. Based on the findings of the investigation, CMS says it will pursue appropriate compliance and enforcement actions.

CMS said that the information in the mailer is misleading and confusing to beneficiaries, represents information to beneficiaries as official communications about the Medicare Advantage program, and is potentially contrary to federal regulations and guidance for the Medicare Advantage and Part D programs and other federal law, including the Health Insurance Portability and Accountability Act.

“We are concerned that the materials Humana sent to our beneficiaries may violate Medicare rules by appearing to contain Medicare Advantage and prescription drug benefit information, which must be submitted to CMS for review,” said Jonathan Blum, acting director of CMS’ Center for Drug and Health Plan Choices. “We also are asking that no other plan sponsors are mailing similar materials while we investigate whether a potential violation has occurred.”

The investigation into the Humana letter was prompted by a request from Sen. Max Baucus (D-MT), chairman of the Senate Finance Committee, who accused Humana of misleading seniors. At press time, the proposed legislation receiving the most attention was Sen. Baucus’ Chairman’s Mark: America’s Healthy Future Act, which was undergoing voting and markup in the Senate Finance Committee.

After introducing his version of healthcare reform on September 16, Sen. Baucus said he was “looking toward the finish line. It’s time to get this done.” Sen. Baucus asked CMS to stop the Humana mailer on September 21, the day before the Finance Committee began to mark up his version of healthcare reform legislation.

In an interview with Managed Care – First Report (MC-FR), Robert Zirkelbach, spokesman for America’s Health Insurance Plans (AHIP), said that AHIP objects to CMS’ instructions halting the Humana mailer and precluding other insurers from similar communications. “This is a gag order, and it was done at a time when members of Congress are considering significant cuts to the Medicare Advantage program,” he said.

Mr. Zirkelbach said that health insurers that administer Medicare plans are working with CMS to address the issue of communicating with beneficiaries about how their benefits could be affected by healthcare reform. “CMS has an appropriate oversight role of the marketing of Medicare Advantage plans,” he told MC-FR. “What we’re talking about here is whether plans have the right to send information to seniors about how proposed legislation might affect the Medicare Advantage program that they rely on for their health security. Seniors have a right to this information. And the information that is being provided is consistent with what [the] CBO [Congressional Budget Office] testified would happen.”

An AHIP statement says that the current healthcare reform proposals include >$100 billion in cuts to Medicare Advantage that will have a devastating impact on the health security of the >10 million seniors enrolled in the program. “If these cuts are enacted, seniors will face premium increases, reduced benefits, and, in some parts of the country, will lose access to their Medicare Advantage plan altogether,” AHIP asserted.

Sen. Baucus disagreed about the potential impact of reducing funding for Medicare. “The healthcare reform bill we released last week strengthens Medicare and does not cut benefits covered under the Medicare program—and seniors need to know that. From lower prescription drug costs to free preventive care to better treatment for chronic conditions, seniors have so much to gain from health reform, and I’m not going to let insurance company profits stand in the way of improving Medicare for seniors,” Sen. Baucus said.

Reacting to CMS’ order and the refusal of legislators to vote for insertion of an amendment that would allow 72 hours for review before a final vote on healthcare legislation, Senate Minority Leader Mitch McConnell (R-KY) accused his Democrat counterparts of trying to rush through legislation and stifle debate.  Sen. McConnell asked in a statement, “Why else would the administration order an investigation into a private company for telling its clients the truth about what this legislation would mean for them? Seniors deserve to know what’s in this bill, and insurers should be free to tell them.”

The US Department of Health and Human Services (HHS) has previously maintained that CMS should not prevent any health plan “from informing its members of proposed legislation and exhorting them to express their opinions.” In 1997, a letter sent by HHS’ Center for Health Plans and Providers (CHPP), the agency that is now CMS, answered lawyers’ questions about rules governing communications between health plans and their beneficiaries.

Written by Bruce Merlin Fried, who was director of CHPP at the time, the letter stated that, “While it may be difficult for a reviewer to ascertain whether or not the information about legislation, for example, contained in a member’s newsletter issued by an HMO [health maintenance organization], is accurate and without slant or unrevealed self-interest, we believe that prohibiting such information would violate basic freedom of speech and other constitutional rights of the Medicare beneficiary as a citizen.”

Mr. Fried noted that any materials sent by health plans to members discussing proposed legislation must contain the following statement: “Neither the Health Care Financing Administration nor the Medicare program has reviewed the statement below for accuracy or misinterpretation.”

The Humana mailer contained the following statement: “Neither the Centers for Medicare and Medicaid Services nor the Medicare program has reviewed these materials for accuracy or misrepresentation. You are not required to provide any information to us, and the information that you choose to share will not affect your membership in any Humana health plan.”

On September 24, Republicans called on the HHS secretary to rescind the gag order. “America’s seniors and the health plans that serve them deserve to have their free speech rights respected. Their rights should not be subject to the whims of any administration, and the health plans that serve them should not be threatened with punishment if they speak out on a matter of public concern simply because the administration disagrees with their position,” they said in a letter signed by Sen. McConnell and others. “Until your department rescinds its gag order and allows seniors to receive information about matters before Congress, we will not consent to time agreements on the confirmation of any nominees to your department or associated agencies.”

In perhaps the most direct challenge to CMS’ gag order to date, Rep. David Camp (R-MI), ranking member of the House Ways and Means Committee, sent a letter to Daniel R. Levinson, inspector general of HHS, requesting “a formal investigation into recent and unprecedented regulatory actions CMS has taken against Humana and then more broadly applied to all Medicare Advantage health insurance plans.”

Rep. Camp argued that CMS actions involve possible inappropriate use of official authority for political purposes and create the impression of political influence overruling standing CMS policy. “Time is of the essence, as it is likely that one or both of the Chambers of Congress will consider legislation implementing cuts to Medicare Advantage within the next few weeks…. Any Agency action to rectify this inappropriate gag order after Congress has considered healthcare reform legislation is effectively meaningless.”—Charles Boersig