Humana (TG:HUM)
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Congressional Republicans on Tuesday accused the federal government of unfairly targeting health insurance giant Humana Inc. (HUM) for letters the company sent to Medicare Advantage enrollees suggesting that health-care legislation could lower their benefits.

Centers for Medicare and Medicaid Services, in a Sept. 18 letter to Humana, said it had started an investigation of the company's marketing practices. The agency ordered Humana to cease telling its enrollees to call their lawmakers about proposed cuts to privately-run Medicare plans, known as Medicare Advantage plans.

Medicare officials pointed to letters from Humana to Medicare Advantage suggesting that, under health-care legislation pushed by Democrats, seniors and those with disabilities "could lose many of the important benefits and services that make Medicare Advantage health plans so valuable."

Senate Minority Leader Mitch McConnell, R-Ky., on Tuesday defended Humana, saying that it is "a common sense conclusion" that Medicare Advantage benefits could be cut under the legislation.

"We cannot allow government officials to target individuals or companies because they do not like what they have to say," McConnell said.

Humana is located in Louisville, Ky., which McConnell acknowledged in his speech.

Rep. Dave Camp, R-Mich., the top Republican on the House Ways and Means Committee, in a letter Tuesday to CMS, expressed concern that the agency may have "taken action for political purposes" and "may be selectively and inappropriately using its regulatory powers."

Camp called for CMS to end its "gag order" against Humana and provide an explanation of its actions.

A health-care bill under debate this week in the Senate Finance Committee would seek to trim $123 billion over ten years in payments to Medicare Advantage plans, putting the plans in a new competitive bidding program. Lawmakers are divided over what the effect of the payment cuts will be on enrollees' benefits.

CMS said that Humana's letter was "misleading and confusing to beneficiaries" and that it had violated the marketing laws for Medicare Advantage plans.

Senate Finance Chairman Max Baucus, D-Mont., who sponsors the committee's health-care legislation, originally requested CMS' investigation. Baucus in a statement Monday said the Medicare Advantage provision in his bill "does not cut benefits covered under the Medicare program - and seniors need to know that."

-By Patrick Yoest, Dow Jones Newswires; 202-862-3554; patrick.yoest@dowjones.com