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CMS
investigates allegations that Humana encouraged its highest-cost
beneficiaries to join competing Medicare Prescription Drug Plan
CMS
officials are investigating whether
Humana inappropriately advised the highest-cost beneficiaries in
its Medicare prescription drug benefit plans to switch to plans
provided by
Sierra Health Services,
The Hill
reports.
Sierra officials on Feb. 27 alleged such practices during a
conference call with investment analysts. Sierra President and CEO
Anthony Marlon said that an "extraordinary amount of drugs" were
being used by some beneficiaries enrolled in one of the company's
new drug plans.
The plan, called SierraRx Plus, was introduced in
January and provides full coverage of brand-name and
generic drugs during the Medicare drug benefit
coverage gap known as the "doughnut hole."
Marlon said, "We believed our level of adverse selection was in part
due to certain high-utilizing members being referred to us by
another PDP provider. We did not agree to these referrals." Marlon
said the plan will be discontinued next year.
 Sierra executives on Feb. 28 discussed the matter with CMS
officials. Humana officials said beneficiaries were informed about
Sierra's new plan because the company was eliminating brand-name
doughnut hole coverage and increasing premiums to about $80 for its
Humana PDP Complete plan.
"Our goal was to make sure these people continued to have access to
prescription coverage," Humana Director of Media and Public
Relations Dick Brown said. He added that CMS had approved the
scripting that Humana representatives used in their calls to
beneficiaries.
Brown did not clarify whether the company contacted each of the
400,000 beneficiaries enrolled in the Complete plan or only those
who had the highest drug costs. Peter O'Neill, Sierra's vice
president of public and investor relations, said CMS has given
Sierra executives a "clear impression" that Humana's actions were
not consistent with CMS-approved referral practices.
Abby Block, director of CMS'
Center for Beneficiary Choices, said, "We are working very
closely with Sierra in examining their claims experience so far."
The Hill reports
that the dispute "highlights the difficulty of offering
comprehensive prescription drug coverage to the oldest, sickest and
costliest Medicare participants" (Young,
The Hill, 3/8).
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