WASHINGTON Tens of thousands of Medicare recipients have been victims of deceptive sales tactics and had claims improperly denied by private insurers that run the system's huge new drug benefit program and offer other private insurance options encouraged by the Bush administration, a review of federal audits has found.
The problems, described in 91 audit reports reviewed by The New York Times, include improper termination of coverage for people with HIV and AIDS, huge backlogs of claims and complaints, and a failure to answer telephone calls from consumers, doctors and drugstores.
Medicare officials have required insurance companies of all sizes to fix the violations. Since March, Medicare has imposed fines of more than $770,000 on 11 companies for marketing violations and failure to provide timely notice to beneficiaries about changes in costs and benefits.
The companies include three of the largest participants in the Medicare market, UnitedHealth, Humana and WellPoint.
Of the audits conducted by the Department of Health and Human Services, 39 focused on drug benefits, 44 focused on managed care plans and 8 examined other types of private plans.
The audits document widespread violations of patients' rights and consumer protection standards. Some violations could directly affect the health of patients for example, by delaying access to urgently needed medications.
The audits show the growing pains that Medicare has experienced as it introduced the popular new drug benefit and shifted more responsibility to private health plans.
For years, Democrats have complained about efforts to "privatize Medicare," and they are likely to cite the findings as evidence that private insurers cannot be trusted to care for the sickest, most vulnerable Medicare recipients.
But federal officials point with pride to their efforts to police the Medicare market, and they say that competition among private plans has been a boon to beneficiaries, offering more choices at lower cost than anyone expected.
"The Medicare drug benefit is saving seniors an average of $1,200 a year," said Mike Leavitt, the secretary of health and human services.
Medicare officials said the audits also showed that insurers would be held accountable. "The start-up period is over," said Kerry N. Weems, the new acting administrator of the Centers for Medicare and Medicaid Services. "I am simply not going to tolerate marketing abuses."