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New Report On Medicare Advantage

May 21, 2008

WASHINGTON – U.S. Rep. Diana DeGette (D-CO), Vice Chair of the Energy and Commerce Committee, today reacted to a comprehensive reportby the Energy and Commerce Committee on the Medicare Advantage (MA)program. The report, which was prepared by the Committee's majoritystaff, analyzes the current regulatory framework and common marketingpractices of MA plans. It also assesses recent proposals by the Centersfor Medicare and Medicaid (CMS) to curb the egregious and abusivemarketing tactics.

"The fraud and abuse within the Medicare Advantage plans isunacceptable," said DeGette. "While the rule promulgated by the Centersfor Medicare and Medicaid Services (CMS) attempts to address some ofthe marketing concerns within the program, it fails to address theunderlying problems of overpayment associated with the MedicareAdvantage plans. These plans fall short when it comes to protectingseniors' health and access to quality health care. They also result inoverpayments by taxpayers and cost more to administer than traditionalMedicare."

Democratic Committee leaders requested the report following aSubcommittee 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, salespractices that have emerged since the passage of the MedicareModernization 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 toseniors. It also explored the broad array of concerns associated withthe 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 reducingoverpayments to the Medicare Advantage program. We must continue strongoversight and implement needed reforms that protect our seniors in theprogram. This report concludes that CMS must place the protection ofvulnerable 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 dolittle to address the underlying problems with MA plans and proposesrecommendations to adequately protect patients and consumers.

To view the full report, please click here.

DeGette Comments on New Report that Concludes "Insurance Industry Abuses are Abound in Medicare Advantage"