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For Immediate Release: Monday, September 24, 2007
Contact: CMS Office of Public Affairs


It’s a pleasure to be here today and have this opportunity to introduce myself and talk about some of CMS’s priorities moving forward. 


But before I do that, I want to express CMS’s appreciation for all of the work and support that America’s Health Insurance Plans (AHIP) have undertaken over the past few years.  Your work on value-based purchasing through the AQA Alliance is absolutely essential to refocus the health care system on getting the best care and best health for a patient at the lowest cost. 


Your efforts in behalf of transparency, quality measurement, and better evidence will enable health care providers and patients to make decisions about care with a much higher level of confidence. 


But especially our partnership to establish the Medicare Part D Prescription Drug Program and the Medicare Advantage program—two truly landmark benefits—immeasurably advance CMS’s efforts to transform our programs from passive bill-payers to actively purchasing quality and value.


I know it’s been an uphill climb.  For the past two years, as HHS Chief Financial Officer and as Secretary Leavitt’s Deputy Chief of Staff, I haven’t exactly been watching from the sidelines.  This was a truly major reform affecting many millions of people, and major reforms are not easy.


It’s been said many times that Part D prescription drug coverage was the most significant benefit to be added to the program since Medicare began.  It’s simply unthinkable that Medicare did not cover them for most of its history.


Early on, when transition issues arose with Part D, and many did, CMS and plans joined forces to find and fix the problems.  Today, wait times on customer service lines and pharmacy service lines are short; we are seeing only a limited number of coverage appeal requests, and complaint rates for problems that plans don’t resolve are only around two per thousand beneficiaries per month.


As we approach the third open enrollment season, more than 24 million seniors and people with disabilities are receiving drug coverage through the Part D program, and the program is delivering better benefits at lower than expected costs.  


Beneficiaries are saving an average of $1,200 annually on their medications, the cost of the program is nearly $200 billion less than estimated, and beneficiary satisfaction rates are between 75 and 85 percent.  Few government programs can claim that.


CMS is working hard to reach out to beneficiaries for the coming plan year. 


To date, we’ve trained over 1,200 community partners to help with grassroots outreach nationwide.  We will host additional training workshops in October and they are filling up fast.  We’ve already logged in more than 400 registrants. 


The Medicare bus will help get the word out on open enrollment.  The enrollment tour kicks off in St. Louis, Missouri on October 2 and ends December 31.  This year, our theme is Working Together for Better Health. We’ve scheduled hundreds of events with community-based organizations to identify and enroll beneficiaries who need the low-income subsidy and drug coverage. 


Beginning in mid-October, beneficiaries will be able to compare 2008 plan information on  We’re hiring additional staff to man the phones at 1-800-MEDICARE during open enrollment and we’re being proactive about making sure callers are served efficiently and information is up to date.  Beneficiaries will also receive the Medicare & You Handbook in mid to late October.  And, a paid media campaign beginning in October and running through December will focus on the importance of signing up for Part D. 


We’re making a concerted effort to reach people who might be eligible for the low income subsidy—those who are unaware, unsure or unable to sign up for this benefit.  We’ve made grants available to community-based organizations through the Administration on Aging’s network to find and sign up low-income beneficiaries, we have new capabilities on our website to target this group, and we are mobilizing community partners nationwide. 


In addition, we are making special efforts to help beneficiaries who are facing a change in their LIS status, communicating with them through targeted mailings; doctors, pharmacists and other health care providers; state and local officials; community partners, and others.


There are three main groups of people we need to reach:  beneficiaries who are losing their deemed status; beneficiaries who are being re-assigned, and beneficiaries who need to choose an alternative plan.   We’re doing everything we can to make sure no one in any of these groups is overlooked, and everyone understands the changes they will need to make in the coming weeks. 


Even though we’ve had two successful open enrollment seasons, we still have ongoing work to do as it relates to low-income beneficiaries.  First, we know that not everyone who can benefit from the extra help that is available is receiving it. 


CMS is stepping up our outreach efforts.  I want to challenge you to do the same.  Low-income beneficiaries are difficult to find and enroll.  It is hard work, but it is noble work, and I ask you to be part of it.


Second, we have a large number of beneficiaries who will be switching plans this fall.  I am committed to ensuring that their transition is smooth, and I ask the same of you in the coming weeks and months.


The start-up phase is over and we are moving into the next phase.  This is the phase where we need to start demonstrating maturity.  The demands on these programs, on CMS, and on you—our private-sector partners—are evolving.  Part of this is an increased demand for compliance and oversight.  So I want to say a couple of things about compliance and oversight, particularly in regard to the Medicare Advantage Private Fee-for-Service (PFFS) plans.


As you know, seven sponsors of PFFS plans agreed to suspend marketing during the summer, in response to CMS concerns that the industry did not have adequate safeguards in place to ensure that marketing complied with CMS standards.  I’m pleased to let you know that after a rigorous review of the seven organizations, CMS has determined they now meet the multiple requirements for beneficiary protection.  We announced earlier this morning that marketing may resume for all of them. 


I’ve personally read these audits, and believe that the process was not only valuable for CMS; it was also a valuable tool for industry to identify weaknesses and correct them.  Bad behavior cannot survive in the sunlight—so it’s critical for CMS and plans to maintain open communication going forward.


Cracking down on abuses is, of course, in beneficiaries’ best interest.  CMS’s first responsibility is to its beneficiaries to make sure they get the quality care they enrolled in and are not misled or misinformed.


It’s in CMS’s best interest.  We have a fiduciary responsibility to beneficiaries and taxpayers to ensure that our programs offer the best value possible.


It’s in plans’ best interest as well.


The old saying that “a few bad apples spoil the whole bunch” is particularly apt with regard to marketing abuses.  CMS is not the only government entity that will be stepping up oversight.  The Congress is watching.   But unless these marketing abuses are nipped in the bud, Congressional and public sentiment could easily turn against the entire MA program. 


CMS will continue oversight of all plans, and take appropriate action if warranted.   This past week, we issued civil monetary penalties against two plans for marketing abuses.  I want to be clear—despite the fact that we believe civil monetary penalties were necessary—they represent a failure for all of us…for CMS as well as these plans.  The reality is, we should have prevented abuses, and we will need to fix them together.


The Administration strongly supports Medicare Advantage and is committed to its success.  We are determined not to have the promise of lower costs, better benefits, and coordinated care for beneficiaries with chronic disease undermined by a few bad actors. 


But oversight involves more than shining the light on problems after they’ve occurred.  We also need transparency to support better service so problems will not occur.  That is why, on November 15, we will post Medicare Part C and Part D “report cards” on our website, so the public will have access to full information on plan performance.  And on October 1, the full range of corrective action plans issued during 2006 and 2007 will be posted on our website.


Medicare Advantage plans have led the way in developing case management programs for chronic diseases and integrating them into their overall approach to care.  They do this at a lower cost to beneficiaries through a combination of competitive bidding and federal incentives.  And they are especially important for people with income over the Medicaid limit but not high enough to afford a Medigap policy. 


MA plans have seen substantial growth in the past several years, and much of this has been very good.   A higher proportion of Medicare Advantage enrollees, 57 percent, are low-income—with incomes between $10,000 and $30,000 a year—compared to 46 percent in the traditional program.   A higher percentage, 27 percent, of Medicare Advantage participants are minorities compared to basic Medicare at 20 percent.


Our own Abby Block, CMS’s director of the Center for Beneficiary Choices, will be here a little later this morning to talk more about how to make the CMS - industry relationship work better.  But for now, just let me say that MA plans offer real promise to people with Medicare, and we’re fully supportive of the public-private partnership that has made the program so successful.


You’re going to hear from Julie Goon, Special Assistant to the President for Economic Policy, in a few moments.  I know that both Julie, and Abby, will reiterate our commitment to the success of the Medicare prescription drug and Medicare Advantage programs, and how much we have depended on our working relationship with AHIP to achieve this success.


We want to maintain this strong dynamic partnership.  So we have to make sure that appropriate, transparent safeguards are in place going forward.  This is the way we can guarantee true choice for Medicare beneficiaries in the future.


But as we move into the maturity phase of our relationship we will have to work overtime to make sure that the people with Medicare who have joined your plans get the benefits they were promised, they need and deserve.  Not merely because of increased scrutiny—although it surely will be there—but because it’s the right thing to do.


Thank you very much.


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