Medicare + Choice:

New Standards Could Improve Accuracy and Usefulness of Plan Literature

HEHS-99-92: Published: Apr 12, 1999. Publicly Released: Apr 13, 1999.

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Pursuant to a congressional request, GAO provided information on the Medicare Choice program, focusing on: (1) the extent to which managed care organizations' (MCO) member literature provides beneficiaries with accurate and useful plan information; and (2) whether the Health Care Financing Administration's (HCFA) review process ensures that beneficiaries can rely on MCOs' member literature to make informed enrollment decisions.

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 for Executive Action

  1. Status: Closed - Implemented

    Comments: HCFA has developed and implemented a standardized Summary of Benefits that managed care organizations are required to use. The Summary of Benefits includes a standardized one-page "Important Beneficiary Information" page, a matrix of benefits using standard categories, language, and order of benefits. The plans use a template of possible sentences to produce their Summary.

    Recommendation: In order to help Medicare beneficiaries make informed health care decisions and reduce the administrative burden on agency staff and MCOs, the Administrator, HCFA, should require MCOs to produce one standard, FEHBP-like document for each plan that completely describes plan benefit coverage and limitations, and require MCOs to distribute this document during sales presentations and upon request.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

  2. Status: Closed - Implemented

    Comments: For 2001, HCFA has implemented the Plan Benefit Package (PBP), which replaces the benefit Information File. The PBP includes much more information about each plan's benefit package including costs. Also, several sections of the Summary of Benefits have been integrated into the PBP and will be generated as output reports.

    Recommendation: In order to help Medicare beneficiaries make informed health care decisions and reduce the administrative burden on agency staff and MCOs, the Administrator, HCFA, should fully implement HCFA's new contract form for describing plans' benefit coverage, the plan benefit package, for the 2001 contract submissions to facilitate the collection of comparable benefit information and help ensure full disclosure of plans' benefits.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

  3. Status: Closed - Implemented

    Comments: In January 2002, CMS released two standardized appeals notices, one on denial of coverage and the other on denial of payment. CMS has drafts for two additional appeals notices, the practitioner notice and the case file forwarded for review notice. Both still need to be tested and should be available in 2003. CMS has explored standardizing enrollment forms, but decided instead to produce a model form that M+COs may adopt. CMS has also issued requirements for enrollment forms, including specific data elements that must be included if the model form is not used.

    Recommendation: In order to help Medicare beneficiaries make informed health care decisions and reduce the administrative burden on agency staff and MCOs, the Administrator, HCFA, should develop standard forms for appeals and enrollment.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

  4. Status: Closed - Implemented

    Comments: To help ensure that M+COs' marketing materials conform to M+C requirements, CMS has released updated National Marketing Guidelines as Chapter 3 in the new Medicare Managed Care Manual. CMS has begun to conduct Medicare Managed Care Manual training with M+CO and CMS regional office staff. CMS also offered an optional checklist to M+COs that they could follow in completing their Evidence of Coverage (EOC) for 2002. If an M+CO submitted the checklist with its EOC, CMS regional staff used it in their review of the M+CO's marketing material and member literature. CMS has also increased uniformity in marketing materials by standardizing the summary of benefits and by offering model materials for the EOC, enrollment and disenrollment notices, and the annual notice of change. CMS continues to enhance its automated tracking system for marketing materials. CMS regional office managers can use this system to track marketing reviews in their regions and generate reports on the reasons for disapprovals.

    Recommendation: In order to help Medicare beneficiaries make informed health care decisions and reduce the administrative burden on agency staff and MCOs, the Administrator, HCFA, should take steps to ensure consistent application of the agency's marketing material review policy.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

 

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