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Consumer group testifies that CMS’ lax oversight of Medicare Private Health Plans results in significantly more out-of-pocket costs for Americans with Medicare...Congress must end Medicare private Fee-for Service Plans’ exemptions from Bid and Benefit Packages Review --

New York, NY, October 16, 2007 –Today the Medicare Rights Center testified before Congress that the Centers for Medicare and Medicaid Services’ failure to audit Medicare private health plans, or to impose penalties on plans when audited, results in older and disabled Americans in the plans not getting the health benefits they are entitled to receive and taxpayers not getting what they pay for.

Paul Precht, Deputy Policy Director at the Medicare Rights Center, a national consumer service organization, testified that the sickest Americans enrolled in Medicare private health plans pay much more for their health care than if they had Original Medicare.

People who receive chemotherapy, inpatient hospital care, home health care and skilled nursing care through Medicare private health plans incur greater out-of-pocket costs than they would through the public Medicare program and cannot insure themselves against these prohibitive costs.

The Medicare Rights Center is calling for the Centers for Medicare and Medicaid Services to use its legal authority to prohibit plans from designing benefit packages that penalize sick people enrolled in the private plans or force them out of the plans entirely.

The Medicare private fee-for-service plans are exempt by Congress from the same review of plan bids and benefit packages that Medicare HMOs and other types of Medicare private health plans are required to get. This means that Congress, people with Medicare and taxpayers have no idea if they are “getting their money’s worth,” testified Mr. Precht.

The Medicare Rights Center recommends that Congress remove these special exemptions for the Medicare private fee-for-service plans.

The Medicare Rights Center is also calling for Congress to require the Medicare private health plans to standardize their benefit packages just as Congress required the standardization of Medigap plans to prevent confusion, and deceptive and fraudulent marketing practices.

The national consumer group also testified that the Centers for Medicare and Medicaid Services’ oversight of the Medicare private health plans’ appeals and grievances processes is sorely lacking. A recent review found that 94 percent of plans audited failed to meet such CMS requirements.  

A copy of the Medicare Rights Center’s testimony before the joint hearing on “Statutorily Required Audits of Medicare Advantage Plan Bids” before the United States House of Representatives Committee on Ways and Means and the Subcommittees on Health and Oversight is available at http://www.medicarerights.org/PrechtTestimony101507.doc