CMS Lifts Aetna Sanctions on Medicare Enrollment

Aetna plans to enroll new Medicare beneficiaries by July 1 in response to the lifting of year-old federal sanctions.

The Centers for Medicare & Medicaid Services removed marketing and enrollment restrictions established last April. Aetna has since corrected its deficiencies, the CMS determined after a review of documentation and the conducting of validation exercises, according to a letter sent to Aetna President and Chief Executive Officer Mark T. Bertolini. Small issues remain, but none which should have prevented the reprieve, wrote Brenda J. Tranchida, director of CMS' program compliance and oversight group.

"We have worked very hard to implement improvements to a number of areas that will further support beneficiary access to care, patient safety and compliance with CMS guidelines," Bertolini said in a statement. "Most important, our actions will enhance our ability to support the nearly 1 million Medicare beneficiaries we are privileged to serve today."

CMS blocked Aetna from enrolling new Medicare beneficiaries or marketing its Medicare plans over improper handling of drug benefits. CMS determined Aetna "demonstrated a substantial failure" in compliance that resulted in "significant impediments to enrollees' ability to promptly access needed Part D drugs," the federal office said at the time (BestWire, April 9, 2010).

Aetna immediately resumed marketing of its Medicare Advantage and Prescription Drug Plan products. In a statement, the company said it views its Medicare business as an important strategic growth area.

Aetna recently announced an agreement to acquire the Medicare supplement and related blocks of in-force business of Genworth Financial Inc. for about $290 million in a deal to expand its presence in the health insurance market for seniors (BestWire, June 13, 2011). The transaction includes the sale of Continental Life Insurance Co. of Brentwood, Tenn., and its American Continental Insurance Co. subsidiary, with Aetna acquiring 100% of Continental Life's stock. It also includes reinsurance agreements to transfer to Aetna the Medicare supplement in-force business sold by certain Genworth life insurance subsidiaries.

Attempts to reach Aetna for additional comment were unsuccessful.

Shares of Aetna, Inc. (NYSE: AET) were trading at $43.38 in the afternoon of June 15, down 2.24% from the previous close.

Aetna Health companies currently have Best's Financial Strength Ratings of A (Excellent).

(By Sean P. Carr, Washington Bureau Manager: [email protected])