CMS Fines Insurer for Misleading Medicare Part D Beneficiaries

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The federal agency that oversees Medicare’s prescription drug program has alleged that a major U.S. insurance company misled beneficiaries about the pharmacies included in the company’s drug plan, and imposed a $1 million fine.

According to a civil monetary notice issued by the Centers for Medicare and Medicaid Services (CMS), Aetna Inc. improperly reported that almost 7,000 retail pharmacies would be “in-network” pharmacies under Aetna’s 2015 Medicare Part D plans. CMS asserted that Aetna included these pharmacies in information it posted on its website and provided it to individuals through Aetna’s customer service representatives. However, once the 2015 plans took effect on January 1, 2015, many Aetna beneficiaries presented prescriptions at pharmacies only to learn the pharmacy was not in the plan’s network. Faced with this situation, enrollees either had to pay for their prescriptions out of pocket, or not get the medication.

According to CMS’s notice, Aetna misleading enrollees about which pharmacies would be part of the network resulted in a significant amount of complaints to CMS. The complaint rate for Part D issues related to Aetna was five times more than the complaint rate for other insurers offering Part D plans. In fact, the almost 3,800 complaints CMS received about Aetna represented a third of all complaints reported to CMS. Of those 3,800, CMS stated that almost 75 percent “were marketing complaints that beneficiaries were misled about in-network pharmacy coverage.”

Earlier this year, CMS issued a letter related to the same in-network pharmacy issue stating that Aetna failed to comply with its federally-mandated obligation to invite and allow into its network any pharmacy willing to participate in the plan. CMS also imposed a corrective action plan to bring Aetna into compliance.

As part of the recent notice, CMS is seeking to assist beneficiaries who had enrolled with Aetna by granting a special enrollment period during which individuals can dis-enroll from their Aetna’s plans and re-enroll in another Part D plan.

CMS stated its authority to issue the $1 million civil money penalty stems from Aetna violating federal regulations requiring it to disseminate clear and accurate information about the number, mix and location of in-network pharmacies that enrollees can use to obtain their covered Part D medications. This most recent penalty comes after a $400,000 fine CMS levied against Aetna in 2014 for problems with benefit administration that led to beneficiaries being delayed and denied access to medications and services.

Aetna has until June 2, 2015 to appeal the $1 million penalty.

Lowell Zeta contributed to this article.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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