Over the weekend, the Centers for Medicare and Medicaid Services (CMS) launched an investigation into Humana Inc.'s effort to enlist beneficiaries to fight proposed cuts to Medicare's private plans (the Medicare Advantage Plans). The investigation is looking at whether Humana, one of the largest providers of Medicare Advantage plans, violated marketing rules by sending letters to beneficiaries in Michigan, Florida and other states urging them to contact lawmakers to register their opposition to proposed cuts.
So, why was Humana upset in the first place? They are unhappy with the Medicare Advantage plan cuts that are in the House bill and both Senate bills. Humana has been profiting for years getting HIGHER fees for the Medicare services they provide than are paid in the traditional fee-for-service Medicare plan - 14% more, in fact. Medicare Advantage plans wrap physician and hospital services together and often provide extra benefits such as vision coverage and prescription drugs; unlike with traditional Medicare, the government pays insurers to manage beneficiaries' care. The plans currently cost the government 14% more on average per beneficiary than traditional Medicare does. The reform bills are returning Humana and other private insurance companies who administer Medicare to the same fees as everyone else.
The investigation by CMS was started because Humana sent letters to its seniors stating that "millions of seniors and disabled individuals could lose many of the important benefits and services that make Medicare Advantage health plans so valuable." CMS is also examining Humana's online Partner program, which automatically drafts letters that people can send to their lawmakers opposing cutbacks. Officials on Friday requested that the company stop the mailings and shut down the Web site.
The Finance bill put out last week is actually very favorable to seniors and Medicare. The Finance bill calls for lower prescription drug costs by closing Medicare's "doughnut" hole, improves chronic disease management, invests in pilots to prevent rehospitalization, and improve access to physician services in rural and underserved areas.
Funny how those things didn't make it into Humana's letter to their beneficiaries.