Medicare Rules Possibly Violated by Agents Selling Fee-for-Service Plans

January 29, 2007 - Health care advocates say that some insurance agents might have violated Medicare rules by soliciting fee-for-service plans to businesses door-to-door and that some agents are targeting beneficiaries with cognitive problems or limited English skills, the San Francisco Chronicle reports.

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According to the Chronicle, the number of fee-for-service plans increased in the past year, and Congress in 2006 eased certain enrollment restrictions.

The Chronicle reports that advocates who have interviewed consumers said some agents focused their efforts on low-income beneficiaries who also are eligible for Medicaid or Medicare, which often provide more comprehensive and less expensive coverage.

Agents' commissions on Medicare fee-for-service plans can be as much as five times higher than commissions for some Medicare prescription drug plans.

At least two insurers are investigating complaints alleging inappropriate marketing practices by their agents and independent sales representatives. CMS also is investigating cases that have been reported. Neither advocates nor regulators know how many complaints have been made about fee-for-service plans.

Jeff Flick, regional CMS administrator in San Francisco, said beneficiaries who have been inappropriately enrolled in a plan will be allowed to change their coverage. He said, "We hold the plans responsible. They have to take responsibility for the things their agents or broker or representatives do" (Colliver, San Francisco Chronicle, 1/26).

CMS Proposes Increase in Medicare Reimbursements for Long-Term Care Hospitals

CMS on Thursday proposed a 0.71% increase in standard Medicare reimbursement rates for long-term care hospitals for 2008, CQ HealthBeat reports. In addition, CMS proposed to extend the "25% rule" -- which reduces Medicare reimbursements for LTCHs located within acute care hospitals that accept more than 25% of their patients from the host facilities -- to cover all LTCHs that accept more than 25% of their patients from one hospital.

Certification Criteria
In related news, lawmakers from both the House and Senate have introduced legislation (HR 562 and S 338) that would establish certification criteria for LTCHs.

The House bill would establish a system to identify which severely ill patients LTCHs should accept and would define the percentage of patients at the hospitals who must meet the criteria, according to the Acute Long Term Hospital Association.

The Senate bill would require the HHS secretary to identify which patients LTCHs should accept based on general medical conditions and severity of illness rather than diagnosis. The bills would reduce Medicare reimbursements for LTCHs by $1 billion to $2 billion over five years, according to William Walters, CEO of the Acute Long Term Hospital Association. Edward Kalman, general counsel for the National Association of Long Term Hospitals, said that the group is "closely studying" the legislation and "will have something to say about it in the future" (Carey, CQ HealthBeat, 1/26).

"Reprinted with permission from kaisernetwork.org You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2006 Advisory Board Company and Kaiser Family Foundation. All rights reserved.”

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