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. This testimony summarizes the April 1999 report, GAO/HEHS-99-92.

GAO noted that: (1) it found problems with the benefit information distributed by all of the 16 MCOs it reviewed; (2) although HCFA had reviewed and approved all of the information GAO examined, some MCOs misstated the coverage they were required by Medicare or their contracts to offer; (3) one MCO advertised a substantially less generous prescription drug benefit than it had specified in its Medicare contract; (4) some MCOs provided complete benefit information only after a beneficiary enrolled; (5) others never provided full descriptions of benefits and restrictions; (6) as GAO has reported previously, it is difficult to compare available options using literature provided to beneficiaries because MCOs use different formats and terminology to describe the benefit packages being offered; (7) the variation in Medicare plan literature contrasts sharply with the uniformity of plan information distributed by MCOs that participate in the Federal Employees Health Benefits Program (FEHBP); (8) MCOs participating in FEHBP are required to provide prospective enrollees with a single, comprehensive, and comparable brochure to facilitate informed choice; (9) in GAO's study of the appeals process, GAO found that when MCOs deny plan services or payment, they do not always inform beneficiaries of their appeal rights; (10) sometimes MCOs issue denial notices that do not contain all the information that HCFA requires; (11) GAO also found that some MCOs delay issuing denial notices until the day before discontinuing services, such as skilled nursing care; (12) this delay can increase a beneficiary's potential financial liability should the beneficiary appeal the plan's decision and lose; (13) many of the information problems GAO identified regarding plan benefit packages and beneficiaries' appeal rights went uncorrected because of shortcomings in HCFA's review practices; (14) in addition, HCFA has not exercised its authority to require MCOs to distribute plan information that is more complete, timely, and comparable; (15) agency officials recognize many of the shortcomings GAO identified and are beginning efforts to address them; and (16) however, GAO believes that the agency could do more.