The Centers for Medicare and Medicaid Services (“CMS”) responded last week to concerns triggered by a letter from Humana to its members covered under Medicare Advantage programs. It was reported that the Humana letter included statements that pending health reform legislation could result in cutting benefits and services under some Medicare Advantage policies. Humana urged its members to contact their elected representatives. Medicare Advantage plans are private insurance options in which Medicare eligible individuals can enroll in lieu of participating in traditional fee-for-service Medicare. These plans frequently offer benefits in addition to regular Medicare benefits, but have come under fire for being more expensive for CMS to finance. All of the health reform proposals have included provisions for reducing the payments to insurers providing Medicare Advantage programs.

CMS sent a letter to all of its Medicare Advantage contractors ordering that communications such as the Humana letter cease, as they are alleged to be misleading and confusing to the members. CMS indicated that further communications could result in violations of the provisions of the Medicare Advantage contracts regarding communications between health plans and their members.

Republican members of the Senate responded with a letter to Health and Human Services Secretary (“HHS”) Kathleen Sibelius urging her to lift the “gag order” on the insurers. The letter from Senator Mitch McConnell of Kentucky and other Republican Senators said that Medicare Advantage plans “should not be threatened with punishment if they speak out on a matter of public concern simply because the administration disagrees with their position.” Republicans also feel that the order violated a 12-year-old guidance on such communications from HHS that would appear to have allowed the Humana letter. The Republican Senators have further threatened to delay confirmation consideration of Obama administration appointees to positions at HHS until the matter is resolved.

HHS spokesman Nicholas Papas responded, upholding the Department’s position, saying “Our Department is committed to protecting Medicare beneficiaries and ensuring that their personal information is not used inappropriately. Seniors on Medicare should not be subjected to misleading information about their Medicare benefits. We have serious concerns that certain communications from a major insurance company violated CMS regulations and our investigation will continue.”

This latest development in the on-going debate over health care reform raises significant first amendment issues.