CMS (Centers for Medicare and Medicaid Services) has ordered Health Net to suspend all marketing and enrollment activity for its Medicare Advantage and Part D Drug plans as of midnight Friday, November 19th, 2010.

According to the CMS announcement:

The immediate sanctions were imposed on Health Net because it has continued to improperly administer the Medicare drug benefit in its national prescription drug plan (PDP) and local Medicare Advantage prescription drug plan (MA-PD) contracts.  Approximately 660,000 Medicare beneficiaries are enrolled in the organization’s national and local plans.

Health Net has about 16,000 Medicare Advantage members in Pima County and 20,000 in Maricopa County. The sanctions do not affect current Health Net members who can stay in their plan for 2011 if they are happy with Health Net’s services.

Health Net is not allowed to enroll new members as of midnight Friday, November 19th, so this will seriously limit choices for Medicare beneficiaries in Pima County, as Health Net is a major player in the Medicare Advantage market here.  Current Health Net members are not allowed to change plans within Health Net, for example, moving from Ruby 1 (with a $33 premium) to Ruby 4 (with a $0 premium).

Secure Horizons and Humana must be celebrating as a major competitor has been put on the sidelines at the start of the Annual Election Period, which runs from November 15 to December 31.  Medicare beneficiaries have this short time period to change their Medicare coverage.  They can change from one Medicare Advantage plan to another.  They can choose to drop their Medicare Supplement and enroll in a Medicare Advantage plan. They can change their Part D drug plan if it is a stand-alone plan. They can drop their Medicare Advantage plan and return to Medicare, effective January 1, 2011. In this last case, they would want to enroll in a stand-alone Part D plan by December 31st so they will have Part D drug coverage for 2011.

After January 1st, everyone enrolled in a Medicare Advantage plan will be “locked into” their plan for all of 2011. If they have a problem with their Medicare Advantage (MA) plan after January 1st, they will have one opportunity to dis-enroll from the MA plan and return to Medicare and enroll in a stand-alone Part D plan. They can make this change between January 1 and February 14, 2011.