Seven Health Insurers Agree to Suspend Private Medicare Plan

Seven major healthcare providers agreed last week to suspend their Private-Fee-For-Service (PFFS) plans until the federal administrator of the Medicare program has certified that each of the hospital meet certain systems and management control guidelines.

PFFS plans offer Medicare beneficiaries the ability to go outside their network of service providers to find treatment. PFFS plans differ from Fee-For-Service plans in that the often provide added benefits such as prescription drug plans, according to Steven Hahn, a spokesman for the Centers for Medicare and Medicaid Services, (CMS).

The Centers announced on June 15 that United Healthcare, Humana, Wellcare, Universal American Financial Corporation (Pyramid), Coventry, Sterling, and Blue Cross/Blue Shield of Tennessee – would be suspending PFFS plans until CMS had had a chance to review and approve the plans.

At issue is the way PFFS plans are marketed to Medicare beneficiaries. CMS reported it logged 2,700 agent complaints on the plans from December 2006 through April 2007, primarily from beneficiaries who felt that they were coerced into paying for a program that they didn’t understand.

Hahn says the complaints come from patients and doctors. “Most are from consumers who didn’t have a clear understanding of the plans they were being offered.”  But some doctors were confused by the differences between a PFFS and an Fee-For-Service plan, and denied service because they thought the patient wasn’t covered.

CMS Acting Administrator Leslie V. Norwalk said in a statement that “(While) most health insurance agents are helpful and responsible in describing and explaining choices to beneficiaries, there are a few bad actors that need to be removed from the system for good.”

The agreement goes in to effect on June 26, 2007.  All PFFS plans must meet these provisions beginning October 1, 2007.