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Medicare plan suspended, fined

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By Carol Gentry
5/18/2010 © Health News Florida

Quality Health Plan, based in Tampa, was notified late Monday that it has been suspended from the federal Medicare program and socked with a fine of almost $600,000 following a rash of enrollee complaints.

In separate letters dated Monday and sent by express mail, the Centers for Medicare & Medicaid Services told QHP that it can no longer enroll Medicare beneficiaries in its plans as of June 2 and that it must pay a fine of $586,800 for "serious non-compliance" with CMS rules.

An attorney for QHP, Tina Dunsford of Tampa, said the administrative problems for which it was cited were caused by a "misunderstanding" between QHP and another company that was supposed to be handling the billing, Envision Pharmaceutical Service.  She said the situation is likely to result in litigation. 

Health News Florida
 has requested a response from Envision. 

The family that runs QHP -- chairman Haider Khan M.D.; his son Nazeer Khan M.D., the CEO; and daughter Sabiha Khan, the COO -- were not available for comment. Dunsford said they were in seclusion following the death over the weekend of Haider Khan's wife Habiba, the mother of Nazeer and Sabiha Khan.

(Update: Late Tuesday, QHP released a statement from CEO Nazeer Khan: "QHP is dedicated to providing the highest level of care and services to its members, and QHP takes its obligations and values its relationship with CMS seriously. QHP has already started to make changes and implemented outreach programs to ensure that this suspension does not affect any QHP member or provider."

(The statement promised full cooperation with CMS).

QHP’s suspension follows that of two other Tampa-based Medicare contractors – WellCare and Citrus health plans – last year. Both were allowed to resume sales in time for 2010 open-enrollment season. Citrus was sold to a Texas company earlier this year.

But there's a difference from the earlier actions: QHP was given both a suspension and a fine because the administrative goof-ups that it reportedly made led to anxiety and potential harm to members.

The worst goof, according to CMS, was a failure to bill members for premiums since January 2008 -- discovered apparently in August 2009 -- and an attempt to recoup the loss with demands for lump-sum payment within 30 days, in violation of CMS regulations.

QHP operates two Medicare Advantage plans and a standalone prescription-drug plan in Florida and New York, with a total of 17,400 members, according to a release from CMS. Three-fourths of those in its prescription-drug plan have incomes so low they qualify for premium subsidies.

CMS sent Quality separate letters by express mail on Monday regarding the reasons for the  suspension and the fine. The letters cited a number of administrative problems that worked a hardship on members, including billing glitches, improper denials and delays of medications, and failure to provide an adequate appeals and grievance procedure.

The billing failure took center stage in the admonishments. Enrollees began receiving demands in August 2009 for back premiums that averaged $332 but in some cases exceeded $1,000.

“Many of these enrollees are already financially disadvantaged; the imposition of such a large bill places this vulnerable population in a tough position,” said Jon Blum, CMS deputy administrator and chief of Medicare, said in a press release.

Most QHP enrollees should experience no problems, he said. However, those who are faced with the back premium assessment or have other issues can call the toll-free line 1-800-MEDICARE.