Medicare imposes suspensions on 3 drug sponsors

NEWS IN BRIEF — Posted Dec. 6, 2010

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The Centers for Medicare & Medicaid Services on Nov. 19 issued a notice to three Medicare health and drug plan sponsors imposing sanctions for violating the program's rules and regulations.

Health Net of Woodland Hills, Calif., immediately must stop marketing to and enrolling new beneficiaries in their prescription drug and Medicare Advantage plans. Medicare Advantage plans sponsored by Arcadian Management Services of Oakland, Calif., and Universal American Corp. of Houston also face sanctions that are effective Dec. 5.

According to CMS, Health Net has continued to administer the Medicare drug benefit improperly in its national prescription drug plan, as well as its Medicare Advantage contracts. About 660,000 beneficiaries are enrolled in the plans.

Universal American and Arcadian did not provide proper oversight of sales agents who misled beneficiaries about network physicians who were not part of the network, CMS said. Universal American has 300,000 enrollees in its Medicare Advantage prescription drug plans, and Arcadian has 66,000 enrollees in Medicare Advantage plans.

The agency said the sanctions will remain in effect until each plan demonstrates that it has corrected the deficiencies. CMS stressed that its actions will not impact the 1 million beneficiaries currently enrolled in these three health and drug plans across the country.

In a statement, Health Net said it is working closely with CMS to resolve the issue as quickly as possible. Universal American said in a statement that the company is "working diligently" to resolve these issues with CMS. Arcadian said in a statement that it is working closely with the agency "to meet or exceed their expectations."

Note: This item originally appeared at

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