Medicare + Choice

GAO found that 16 managed care organizations participating in the Medicare+Choice program--Medicare's alternative to fee-for-service--gave beneficiaries materials containing inaccurate or incomplete benefit information. For example, materials from five organizations said that annual screening mammograms required a physician's referral, even though Medicare explicitly prohibits this. One organization provided an outpatient prescription drug benefit that was substantially less generous than that agreed to in its Medicare contract. GAO found no errors about ambulance services but written materials often omitted important information about that benefit. Some organizations provided complete information on benefits and restrictions only after a beneficiary had enrolled. Each organization used its own format and terms to describe its plan's benefit package, making it difficult for beneficiaries to compare available options. Weaknesses in the processes the Health Care Financing Administration (HCFA) uses to review organizations' member literature led some reviewers to rely on the organization to help verify its accuracy, created opportunities for inconsistent review practices, and led HCFA to fail to ensure that errors reviewers identified were corrected. Beneficiaries would be helped by (1) full implementation of HCFA's new contract form describing the plans' benefit coverage; (2) new standards for terminology, formats, and distribution of key member literature; (3) standard forms for routine administrative functions; (4) standard marketing procedures to review material; and (5) requiring organizations to provide beneficiaries with a single standard brochure like that distributed to members of the Federal Employees Health Benefits Program. GAO summarized this report in testimony before Congress; see: Medicare+Choice: HCFA Actions Could Improve Plan Benefit and Appeal Information, by William J. Scanlon, Director of Health Financing and Public Health Issues, before the Senate Special Committee on Aging. GAO/T-HEHS-99-108, Apr. 13 (15 pages).

GAO noted that: (1) although HCFA had reviewed and approved the materials GAO examined, all 16 MCOs in GAO's sample from four HCFA regions had distributed materials containing inaccurate or incomplete benefit information; (2) almost half of the organizations distributed materials that incorrectly described benefit coverage and the need for provider referrals; (3) one MCO marketed (and provided) a prescription drug benefit that was substantially less generous than the plan had agreed to provide in its Medicare contract; (4) moreover, some MCOs did not furnish complete information on plan benefits and restrictions until after a beneficiary had enrolled; (5) other MCOs never provided full descriptions of plan benefits and restrictions; (6) although not fully disclosing benefit coverage may hamper beneficiaries' decisionmaking, neither practice violates HCFA policy; (7) as GAO has reported previously, it was difficult to compare available options using member literature because each MCO independently chose the format and terms it used to describe its plan's benefit package; (8) in contrast, the Federal Employees Health Benefits Program's (FEHBP) plans are required to provide prospective enrollees with a single comprehensive and comparable brochure to facilitate informed enrollment choices; (9) the errors GAO identified in MCO's member literature went uncorrected because of weaknesses in three major elements of HCFA's review process; (10) limitations in the benefit information form (BIF), the contract form that HCFA reviewers use to determine whether plan materials are accurate, led some reviewers to rely on the MCOs themselves to help verify the accuracy of plan materials; (11) additionally, HCFA's lack of required format, terminology, and content standards for member literature created opportunities for inconsistent review practices; (12) according to some regional office staff, the lack of standards also increased the amount of time needed to review materials, which contributed to the likelihood that errors could slip through undetected; (13) HCFA's failure to ensure that MCOs corrected errors identified during the review process caused some beneficiaries to receive inaccurate information; and (14) HCFA is working to revise the BIF and develop a standard summary of benefits for plans to use--steps that will likely improve the agency's ability to review member literature and other marketing materials--but other steps could be taken to improve the usefulness and accuracy of plan information.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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