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Senate Aging Committee Wants GAO Investigation of Medicare Drug Plan Information; Opens Hearing

'Aggressive marketing tactics used by Medicare Advantage plans may be misleading senior citizens about the true cost and scope of benefits'

Sens. Bill Nelson (D-FL)

Sen. Bill Nelson (D-FL)

Sen. Susan Collins (R-ME)

May 22, 2013 – The bi-partisan leadership of the Senate Special Committee on Aging has requested an investigation of pricing and coverage details presented by sponsors of Medicare prescription drug programs on Medicare’s online Part D. prescription drug plan finder. The committee will also hold its own hearing today on the Medicare drug program, which is nearing its tenth anniversary.

Sens. Bill Nelson (D-FL) and Susan Collins (R-ME), the chairman and ranking member, sent a letter yesterday to the Government Accountability Office (GAO) asking for an examination of the job the government is doing to ensure the companies are not running afoul of Medicare marketing guidelines.

The lawmakers’ request was spurred, they report, in part by a U.S. Department of Health and Human Services Inspector General (HHS-OIG) report that found aggressive marketing tactics used by Medicare Advantage plans may be misleading consumers about the true cost and scope of benefits. 

Approximately 38 percent of all Medicare beneficiaries are enrolled in a Medicare Advantage plan that includes drug coverage.   But, for the remaining 62 percent enrolled in stand-alone Medicare drug plans, no such study has been undertaken to examine the accuracy and oversight of online marketing information these seniors rely on to select their coverage.


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“With more than $65 billion invested, and important personal coverage decisions at stake, ensuring plan sponsor compliance with fair marketing practices to seniors and the accuracy of the information provided to beneficiaries electronically is essential for both beneficiaries and the taxpayer,” wrote Nelson and Collins.


News of the request comes on the eve of a hearing the committee will hold today that will take a broader look at issues facing the Medicare prescription drug program as it approaches its ten-year anniversary.  Before Part D, about 30 percent of Medicare beneficiaries lacked any drug coverage and many more had very limited coverage. 

Today, ninety percent of Medicare beneficiaries have comprehensive prescription drug coverage and nine out of ten say that they are happy with that coverage.  

The costs of the program are also far below original projections. The hearing will focus on what is working well in the program as well as on areas that are in need of improvement.  

One issue Nelson intends to bring up at the hearing is legislation he’s sponsored to end the practice of drug companies charging the government more for prescriptions for low-income Medicare beneficiaries who also qualify for Medicaid.  Nelson, a sponsor of the Medicare Drug Savings Act, believes passing the bill that require manufacturers to pay the same rebates for dual-eligible beneficiaries in Medicare Part D as they used to do in Medicaid would save the federal government as much as $140 billion over ten years. 

When Congress created the Medicare prescription drug program in 2003, it allowed seniors to purchase coverage through private insurers or other companies approved by Medicare.   In 2010, some 17.6 million older Americans were enrolled in stand-alone Medicare approved prescription drug plans nationwide

Below are the details of today’s hearing and text of the Nelson-Collins letter to the GAO.


"Ten Years Later: A Look at the Medicare Prescription Drug Program"

2:30 p.m., EDT, Wednesday, May 22, 2013
Dirksen Senate Office Building, Room 366

  > Margaret Woerner, Medicare Beneficiary and Helpline Volunteer, Medicare Rights Center

  > Jack Hoadley, PhD, Research Professor, Health Policy Institute, Georgetown University

  > Richard Smith, Executive Vice President for Policy and Research, Pharmaceutical Research and Manufacturers of America

  > Robert G. Romasco, President, AARP

Letter to GOA

The Honorable Gene Dodaro
Comptroller General
U.S. Government Accountability Office
441 G Street, N.W.
Washington, D.C. 20548

Dear Mr. Dodaro:

This fall will mark the tenth year since Congress passed the Medicare Modernization Act, the landmark legislation that established a voluntary outpatient prescription drug benefit through private plans approved by the federal government.  Today, 49 million elderly and disabled beneficiaries will have a choice of more than 20 stand-alone prescription drug plans (PDPs) and multiple combination Medicare Advantage-Prescription Drug plans (MA-PD) available in their region.  With more than $65 billion invested, and important personal coverage decisions at stake, ensuring plan sponsor compliance with fair marketing practices to seniors and the  accuracy of the information provided to beneficiaries electronically is essential for both beneficiaries and the taxpayer.

The Medicare Part D program has grown significantly in size and complexity since the first year of open enrollment began. While ninety percent of seniors say that they are satisfied with the Medicare Part D prescription drug program, numerous independent studies demonstrate that seniors continue to overspend on, and remain confused by, their Part D plan options.[1] Additionally, in the Office of the Inspector General’s most recent compendium of unimplemented recommendations, the Medicare Part D program is cited as particularly vulnerable to fraud and abuse, and program integrity investments in Part D in those areas of the program that directly impact beneficiaries have been limited.[2]

To realize the benefits of expanded consumer information as the program continues to grow, the data displayed on the Plan Finder must be complete and accurate, and CMS must make certain that plan sponsors observe the Medicare marketing guidelines that safeguard consumer transparency. Such a body of work studying the accuracy of plan information given to Medicare Part D consumers is of critical importance in order for Congress and the federal government to continue to make targeted improvements that will help seniors to navigate and choose the right coverage.

Therefore, we respectfully request that GAO conduct a limited study prior to the start of this year’s open enrollment period to examine the following:

1) Is the information on plans and drug pricing provided to beneficiaries on the Part D Plan Finder accurate and up-to-date?  Is the data displayed in a way that it appears consistent to beneficiaries? How has the Plan Finder evolved, and what strategies could further improve usability?

2) What certification process is in place to ensure ongoing completeness of data in accordance with federal regulation? Is CMS conducting adequate oversight of private insurers’ compliance with information provided to consumers? 

3) Is current oversight focusing on the transparency and marketing of plans to seniors adequate and in accordance with CMS’ stated Medicare Marketing Guidelines?

Thank you for your attention to this request.

Bill Nelson                               Susan Collins
Chairman                                Ranking Member

Senate Special Committee on Aging


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