For Immediate Release                                            

January 9, 2009

Organizations that represent Medicare beneficiaries are dismayed by the CMS release today of the Medicare Advantage/Prescription Drug Plan Call Letter. The Call Letter, which provides instructions to the private insurance companies that want to contract with Medicare to provide drug and health coverage in 2010, was released two weeks earlier than last year, and two months earlier than the previous year. Beneficiary organizations see the early release as an attempt by the Centers for Medicare & Medicaid Services (CMS) to assure continued leniency in the oversight of private plans for at least another year and as a last-ditch effort to promote private Medicare Advantage plans.

"The draft Call Letter issued today is another example of how CMS has failed to properly oversee private Medicare plans that receive billions of dollars above traditional Medicare without providing the extra benefits they tout," Judith Stein, Executive Director of the Center for Medicare Advocacy says. "For example, the CMS Call Letter does not require private Medicare plans to coordinate care and sets no standards for those that purport to do so.

Paul Precht,  Director for Policy and Communications at the Medicare Rights Center explains further, "Advocacy groups have asked CMS to strengthen the Call Letter admonition regarding discriminating against beneficiaries with greater health care needs by charging higher cost sharing for services such as home health care, chemotherapy and durable medical equipment.  Yet this Call Letter fails to address the problem, even though discriminatory pricing for more costly services continues." 

MedPAC and other organizations have determined that Medicare Advantage plans are paid, on average, 14% more than the same services would have cost under traditional Medicare.  These extra payments, plus leniency in how the money is allocated and benefits are provided, have resulted in increased participation by private health plans in the Medicare program without any proof that they provide better health care.

"We are dismayed that the current administration of CMS has failed to issue a Call Letter that protects beneficiaries and taxpayers by describing in detail what is expected by private Medicare plans," says Kevin Prindiville, staff attorney with the National Senior Citizens Law Center.  "We ask the incoming administrator of CMS to rescind the current Call Letter and issue a new document that demonstrates that CMS will exercise appropriate oversight over private insurance plans."