GAO calls HHS's restrictions of MA plan communications 'unusual'

The Government Accountability Office in a new report calls the Obama administration's restrictions on Medicare Advantage communications "unusual."

During debate over healthcare reform in August and September 2009, health insurance company Humana sent letters to 930,000 beneficiaries enrolled in its Medicare Advantage plans warning that the Democrats' law could hurt seniors' benefits. The Centers for Medicare and Medicaid Services directed Humana to stop the mailings Sept. 18 and extended the order to all other Medicare Advantage groups three days later.

The agency is tasked with reviewing marketing material, such as information on benefits and coverage, that MA plans send to beneficiaries. But in this case, its actions raised accusations of political interference.

"Although CMS's actions generally conformed to its policies and procedures," the report says, "the ... memorandum requesting instructing all MA organizations to discontinue communications on pending legislation while CMS conducted its investigation was unusual."

The report was requested by House Republicans Joe Barton (Texas), Michael Burgess (Texas) and Greg Walden (Ore.).

"This report," Barton said in a statement, "is more evidence that in their efforts to pass health care legislation by any means necessary, the majority was willing to pressure CMS into taking the unprecedented step of halting all communications between Medicare Advantage providers and their beneficiaries." 

The CMS agency, which is part of the Department of Health and Human Services, told GAO the action was "appropriate under the circumstances" given "the degree of potential harm to beneficiaries." HHS also takes issue with the use of the word "unusual," which it says suggests "inappropriate" activity.

GAO stands by its wording.

"Our characterization of CMS's action as unusual is based on discussions with MA organizations and CMS staff," the report states. "They told us that they could not recall a previous example where CMS told all plans to stop an activity after a potential violation was discovered and prior to the completion of an agency investigation."