February 13,2008

Baucus Rebukes CMS Administrator Weems’s At Hearing

Finance Committee members united in criticism of program administration and call for more stringent regulation against defrauding of American seniors and the public

Washington, DC – Senate Finance Committee Chairman Max Baucus (D-Mont.) in a hearing
today sharply questioned Acting Administrator Kerry Weems of the Centers for Medicare and
Medicaid Services (CMS), the Federal agency responsible for Medicare and Medicaid programs
nationwide. Chairman Baucus raised doubts about the effectiveness of corrective actions CMS is
taking in cases of reported abusive marketing of Medicare private plans. He suggested that many factors are leading to unscrupulous and aggressive marketing by private plans, including a lax oversight environment at CMS, economic incentives for agents and brokers, and the complexity of Medicare private plans.

“Last week we heard testimony from George Harper of Arkansas, a victim of abusive, highpressure, in-home sales of a plan that he didn’t want or need. I am still waiting for a
satisfactory answer as to why this is allowed to happen, and what is being done to stop it,”

Baucus said. “Out of 696 violations found by investigators, few were seriously sanctioned.
That sounds pretty soft to me. It seems that CMS is not equipped to properly oversee how
private plans are sold to Medicare beneficiaries.”

Chairman Baucus also noted that he has no indication from Medicare private plans that CMS is
regulating them strictly enough to protect seniors from abusive and aggressive marketing and
sales tactics. The Chairman also asked whether a standardized approach to marketing Medicare
private plans might make choosing from the numerous choices in Medicare Advantage less
complicated and thereby help reduce fraud.

Today’s hearing was the third in a series examining marketing and sales practices of Medicare
private plans, including Medicare Advantage. Senator Max Baucus, Chairman of the Senate
Finance Committee, which has jurisdiction over the Medicare program, intends to advance
Medicare reform legislation in the Committee this year.