New Report on Medicare Advantage

Press Release

U.S. Rep. Diana DeGette (D-CO), Vice Chair of the Energy and Commerce Committee, today reacted to a comprehensive report by the Energy and Commerce Committee on the Medicare Advantage (MA) program. The report, which was prepared by the Committee's majority staff, analyzes the current regulatory framework and common marketing practices of MA plans. It also assesses recent proposals by the Centers for Medicare and Medicaid (CMS) to curb the egregious and abusive marketing tactics.

"The fraud and abuse within the Medicare Advantage plans is unacceptable," said DeGette. "While the rule promulgated by the Centers for Medicare and Medicaid Services (CMS) attempts to address some of the marketing concerns within the program, it fails to address the underlying problems of overpayment associated with the Medicare Advantage plans. These plans fall short when it comes to protecting seniors' health and access to quality health care. They also result in overpayments by taxpayers and cost more to administer than traditional Medicare."

Democratic Committee leaders requested the report following a Subcommittee on Oversight and Investigations hearing, entitled, "Predatory Sales Practices in Medicare Advantage," held on June 26, 2007. The hearing examined the aggressive, and often fraudulent, sales practices that have emerged since the passage of the Medicare Modernization Act of 2003. The hearing exposed the abusive, high-pressure sales tactics, including unsolicited calling, cross-selling, and outright fraud, commonly used to sell MA plans to seniors. It also explored the broad array of concerns associated with the current design, oversight, and cost of the MA program.

"The new Congress tried to address the abuse through the CHAMP Act, which would have corrected some of the imbalances by reducing overpayments to the Medicare Advantage program. We must continue strong oversight and implement needed reforms that protect our seniors in the program. This report concludes that CMS must place the protection of vulnerable beneficiaries ahead of the powerful insurance companies - and I cannot agree with that more."

On May 8, 2008, CMS released new regulations for MA plans. However, the staff report illustrates that the proposed rule changes will do little to address the underlying problems with MA plans and proposes recommendations to adequately protect patients and consumers.

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