U.S. warns Aetna over Medicare prescription policies

The U.S. Department of Health and Human Services has told Aetna Inc. that unless it revamps its Medicare drug policies by April 21, it will not be allowed to market Medicare prescription coverage.

After Aetna, the region's second-largest carrier, changed how it covered prescriptions, some of its senior-citizen subscribers were not able to receive the medication they needed or were not able to resolve appeals quickly enough, the government said.

"We take this very seriously, and we're working hard to reach out to our members and correct this issue," said Fred Laberge, an Aetna spokesman.

The Centers for Medicare and Medicaid Services, which is part of the HHS, imposed the immediate sanctions in a warning letter to Aetna dated April 5. In the letter, CMS said Aetna had failed to take measures "critical to protecting the health" of its enrollees.

"CMS believes these issues to be of such a serious nature that, if left uncorrected, CMS will consider taking action to immediately terminate your contract," the letter said.

Aetna covers 586,000 senior citizens for prescriptions, either through a Medicare Advantage Plan with a Part D component or through a stand-alone Part D plan. ("Part D" refers to prescription coverage.)

Aetna, based in Connecticut, is the fourth major insurer sanctioned in this way in two years.

In the last two years, the government has changed how it enforces Medicare regulations, said Robert Zirkelbach, a spokesman for America's Health Insurance Plans, a trade group.

Although the government has always provided oversight, Zirkelbach said, there have been more sanctions and more public announcements of the sanctions. Overall, he said, senior citizens are pleased with Medicare drug coverage provided by insurance companies.

Aetna's problems began, Laberge said, when it changed its drug coverage. In 2009 and preceding years, Aetna had an open formulary plan, meaning any drug was covered.

This year, it switched to a closed formulary plan, meaning only certain brands of drugs would be covered, with preference given to generics.

Regulations require insurers to provide plenty of notice and a transition period while instituting a quick appeals process. Laberge said Aetna thought it had done so, but the government disagreed.

In January, Aetna received 40,000 requests from enrollees for exceptions to the new formulary plan, the government said.

That swamped Aetna's system, causing delays and pushing people to seek an "expedited determination," or 72-hour fast-track approval because failure to get permission quickly "could seriously jeopardize the life and health of the enrollee," the government said.

Although the government's action is serious, it comes just after the end of an open-enrollment period. The next such period is in September, Laberge said. In the meantime, Aetna would lose its ability to market to current subscribers, who, on turning 65, become eligible for Medicare Part D plans.