Aetna Told to Go Sit in the Corner for Medicare Compliance Violations


Aetna appears to have gotten itself in some pretty big trouble. The Centers for Medicare and Medicaid Services (CMS), effectively Aetna’s authority figure, has punished the insurer for violations related to Aetna’s administration of the Medicare Advantage plan. The violations stem from Aetna’s move to change coverage for drugs in certain plans. According to a letter sent by CMS to Aetna, the insurer failed to properly transition some patients from the old drug formulary to the new one, and some patients were delayed in receiving their prescriptions because their medications were improperly denied (a drug formulary is a list of drugs preferred by a health plan).

CMS has imposed sanctions on Aetna, so the insurer won’t be pushing its plans or enrolling any seniors for a while. The sanctions don’t affect current Medicare enrollees. The company and some analysts are downplaying the effect of the sanctions on Aetna’s bottom line. However, according to research by Goldman Sachs, $5.7 billion out of Aetna’s 2009 revenue of $34.7 billion came from Medicare Advantage and prescription drug plans.

Aetna may not be all that concerned after all, considering that the new health care reform bill will cut government payments to Medicare Advantage by $132 billion over the next 10 years.  Perhaps Aetna is actually rubbing its hands together in gleeful anticipation of the millions of Americans who will be required to buy some type of insurance in the future.

Whether or not Aetna took this course of action in anticipation of changes to Medicare Advantage under the health care bill, it will be interesting to see how Aetna’s role in the insurance saga will unfold over the coming years.

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Eric L. Young, has successfully combated corporate misconduct for most of his legal career. Eric has represented individuals at every level of the workforce, from corporate executives to blue collar workers from around the globe, including the United States, the United Kingdom, South Africa, Asia, India, and other international locations. His track record of success has made him one of the nation’s leading whistleblower attorneys.