$1,000,000 Fine Imposed for Incorrect In-network Information

In a letter from the Centers for Medicare & Medicaid Services (“CMS”) Medicare Parts C and D Oversight and Enforcement Group issued on April 2, 2015, CMS imposed a civil money penalty of $1,000,000 on health insurer, Aetna, Inc. The $1,000,000 fine was based on Aetna’s “failure to disseminate clear and accurate information regarding the number, mix, and distribution (addresses) of network pharmacies from which enrollees may obtain covered Part D drugs,” which CMS found violated obligations imposed by  42 C.F.R. § 423.128(a)(2) and 42 C.F.R. § 423.509(a)(2).

During 2015, Aetna incorrectly identified 6,887 pharmacies as in-network pharmacies via its website and customer call center service. CMS found the incorrect information misled beneficiaries who relied on these pharmacies when making plan selections. Upon finding their pharmacies were not actually considered in-network as advertised, patients were forced to pay cash for prescription or leave the pharmacies without their medication.

Aetna’s Medicare Advantage plan (Part D) had a patient complaint total which was five times higher than other Medicare Advantage Part D organizations. Complaints about Aetna comprised 33% of all the complaints CMS received, with 73% of those complaints discussing the misleading information about in-network pharmacy listings.

CMS further noted that additional failures of Aetna could result in additional applicable punishments “available under law, up to and including contract termination, the imposition of intermediate sanctions, penalties, or other enforcement actions . . .” In light of CMS’ actions, insurers should evaluate the quality and correctness of the information provided to current and potential beneficiaries.

Written by: Danielle Borel

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