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Government Says H.M.O.'s Mislead Medicare Recipients
By ROBERT PEAR, New York Times, April 13, 1999 (DOI: 19990412)
WASHINGTON -- Health maintenance organizations routinely distribute inaccurate information on benefits and costs to Medicare beneficiaries, and the government frequently approves such misleading documents, federal investigators said Monday.
The General Accounting Office, an investigative arm of Congress, said it had examined documents from 16 HMOs and found "significant errors
and omissions" in materials from all of them.Such documents, it said, are often the members' "only source of detailed information" about health benefits and coverage, but they are frequently "not accurate, timely or complete."
In a separate report, the GAO said HMOs often failed to inform Medicare beneficiaries that they could appeal decisions to deny care or payment for services. As a result, it said, many patients "may be unnecessarily exposed to substantial health care costs."
When an HMO refuses to pay for services, like nursing home care, it is supposed to inform patients that they can challenge the decision.The Senate Special Committee on Aging will investigate these problems at a hearing on Tuesday.
HMOs cover 7 million people who are elderly or disabled -- 18 percent of the 39 million Medicare beneficiaries. The number of beneficiaries in such managed care plans has nearly doubled in the last three years.
Total Medicare spending is expected to reach $216 billion this year, with HMOs expected to get $37 billion, or 17 percent, of that amount.Officials at the Department of Health and Human Services agreed with the report's conclusion that they should scrutinize HMO marketing materials more closely.
The GAO found that some Medicare HMOs provided benefits less generous than what they had agreed to in their contracts with the government.
Medicare officials review and approve all booklets, brochures and marketing materials sent to Medicare beneficiaries by HMOs. But errors often slip through because Medicare officials do not have detailed standards to evaluate the format, terminology and content of brochures, the accounting office said.
Clinton administration officials said they were trying to develop such standards.
Even when federal officials find errors in HMO literature and marketing materials,
they do not follow up to make sure the mistakes are corrected, the auditors said.The report said some HMOs told women that they needed a referral from a doctor to get a mammogram, even though federal rules explicitly prohibit such a requirement.
In addition, the accounting office found that some HMOs misrepresented the prescription drug coverage they were supposed to provide to Medicare beneficiaries.
For example, it said, one big HMO told members that it would cover $600 a year in prescription drug costs, even though the company's contract with the government required at least $1,200 a year in coverage, and Medicare was paying for the more extensive coverage.
Karen M. Ignagni, president of the American Association of Health Plans, which represents HMOs, vowed to take "a very serious look" at the report. "We have an obligation to provide Medicare beneficiaries with accurate information in an understandable form," she said.
The GAO said that one HMO continued to advertise and enroll new customers in some Ohio counties throughout 1998, without telling them that it intended to end its Medicare services in those counties on Jan. 1, 1999.
The accounting office did not name the health plan, but details in the report suggested that it was Anthem Inc. of Indianapolis. Lauren Green-Caldwell, a spokeswoman for Anthem, said federal rules required it to continue selling its Medicare HMO until the end of 1998.
The GAO said that no one document fully describes the services covered by a Medicare HMO. Typically, it said, patients must examine four or five documents to answer basic questions, and the documents sometimes contradict one another.
For years, Medicare beneficiaries have been allowed to quit an HMO on a month's notice. But in 2002, they will lose this privilege and will be able to change their decisions only once each year outside Medicare's annual open enrollment period.
For this reason, the GAO said, it is essential that HMOs provide more accurate information about the scope of coverage, beneficiaries' rights, copayments and other costs.
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