Medicare/Medicaid Administers Engaging in Stealth Regulation?

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CMS: Stealth Regulator?
By John Reichard, CQ HealthBeat Editor

Medicare officials quietly canceled the contract of a South Florida health plan July 20 on the grounds that its delays in providing care posed “an imminent and serious risk” to plan enrollees, including cancer patients awaiting chemotherapy. But officials issued the cancellation — the first of its kind — with little public notice and consumer advocates say the plan’s top rating remained on a Medicare Web site until late July despite the agency’s conclusion in early 2007 that there were “critical gaps” in its provider network, including shortages of hospitals and specialists.

CMS’s handling of problems at the health plan, part of America’s Health Choice (AHC), based in Vero Beach, Fla., “reeks of secrecy,” said Deane Beebe, public affairs director for the Medicare Rights Center, a New York City-based organization that advocates for Medicare patients. “Initially they weren’t saying what went wrong” with the health plan, Beebe said of the agency. “Obviously CMS is more interested in protecting health plans than elderly and disabled Americans.”

CMS provided only partial answers to requests for comments about the nature of problems with the plan and about why the public wasn’t notified more broadly about those problems. However, agency spokesman Steve Hahn confirmed that the cancellation marked the first time CMS has rescinded a contract with a private health plan on quality-of-care grounds since the Medicare Advantage program was launched under the 2003 Medicare overhaul law (PL 108-173). The Medicare Advantage program now enrolls 20 percent of Medicare’s 44 million beneficiaries. Enrollment stands at 8.7 million Medicare beneficiaries under 602 plan contracts with Medicare, up from 5.3 million across 285 contracts in 2003, according to the Henry J. Kaiser Family Foundation.

The chronology of CMS actions in deciding to terminate the plan’s contract and the lack of details about the plan’s problems raise troubling questions about the agency’s concern for enrollees, Beebe said. The lack of information is particularly noteworthy in light of the agency’s advocacy of a market model that stresses “transparency” to help consumers pick the best plan based on cost and quality, Beebe said.

Some 12,000 enrollees in the America’s Health Choice Medical Plan were notified by overnight mail on July 20 that they were no longer a part of the plan and had been “enrolled retroactively,” as of July 1, in a preferred provider plan operated by UnitedHealthcare’s Secure Horizons, according to a draft CMS press release obtained by CQ HealthBeat. A final version of the press release, dated July 26, now appears on the agency’s Web site, but it’s unclear when the agency posted it and the agency did not distribute it to reporters by e-mail as it has done routinely for other CMS announcements.

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