GAO Expands Its Medicare Ad Probe

Posted February 6, 2004 at 5:34pm

A growing furor over government-run ads promoting the new prescription drug benefit under Medicare picked up steam Friday when the General Accounting Office agreed to investigate the propriety and legality of the ads. Even as the GAO was preparing to notify the Department of Health and Human Services of its intention to investigate a planned February mass mailing to eligible seniors regarding the prescription drug plan, Sens. Frank Lautenberg (D-N.J.) and Edward Kennedy (D-Mass.) asked the investigative arm of Congress to expand their probe into the television, print and radio ads that HHS unveiled last week. On late Friday afternoon, GAO agreed to do just that, according to Kennedy’s office. Lautenberg and Kennedy also said they are particularly troubled by revelations that the media firm — National Media Inc. — hired to buy ad space for the HHS promotion is also working on advertising for President Bush’s reelection campaign.

The ads are part of a roughly $22 million publicity blitz that HHS says is intended to educate seniors about the new law.

Critics of the ads — which include the conservative National Taxpayers Union and union-supported Alliance for Retired Americans as well as many Democratic lawmakers — say the ads smack of political propaganda and are a misuse of public funds that may violate a federal law that says government funds cannot be used “for publicity or propaganda purposes.”

HHS spokesman Bill Pierce said that the department is only following the law. The new Medicare law states that the HHS secretary is required to “broadly disseminate information to … eligible individuals regarding the coverage provided by the Medicare prescription drug benefit.”

But because of what many critics claim is a suspicious link between the media company in charge of buying space for the ads and the Bush campaign, ARA Executive Director Edward Coyle said his group would file a Freedom of Information Act request today seeking to find out if HHS used a competitive bidding process to hire the media firm.

Pierce said National Media has been working with HHS for the past three years on the agency’s “1-800-MEDICARE” ad campaign, but as of press time Friday, he could not confirm that the contract for the newest media ad buy was doled out as part of a competitive bidding process.

Though NTU spokesman Peter Sepp declined to specifically address the link between the Medicare ad firm and the Bush campaign, he said the election year implications were obvious.

“We were not put here nor do our members want us to be cheerleaders for legislation that some Republicans think will help them in November,” said Sepp, whose group opposed passage of the Medicare bill.

NTU has sent a letter to HHS Secretary Tommy Thompson calling for the ads to be halted.

The Medicare mailing caught Lautenberg’s attention because he believes it omits key information that should be included in an educational campaign.

For example, the mailing does not tell seniors that the longer they wait to enroll in the Medicare prescription drug plan the more money they may have to pay in premiums, according to Lautenberg’s office.

Lautenberg contends that it also appears to promise seniors that their prescription drug premiums will be “about $35 a month,” without noting that the figure is an HHS estimate and that the department cannot control the premiums charged by private plans that participate in the Medicare prescription drug plan.

Kennedy and Lautenberg excoriated the print and broadcast ads as overly simplistic, because they do not contain any details about how the plan will work.

The 30-second television ad tells seniors that they will “save” money on medicine with drug discount cards this June and new drug coverage in 2006, and it directs them to call 1-800-MEDICARE for more information on getting the “Same Medicare. More Benefits.”

“There is no information of an educational nature in the public service announcement,” Coyle said.

Pierce said the ads are mostly intended to “get seniors’ attention” and have them call the toll-free number for the really complicated details of the Medicare drug benefit.

Kennedy and Lautenberg also took issue with the ad placement so far, seizing upon a Medicare print ad placed by HHS in Roll Call’s Feb. 5 issue.

“Given that the target market for these ‘educational’ advertisements are senior citizens, it makes little sense for HHS to purchase space in a publication with a 65 and over readership of only three percent (according to the publication) and is aimed at Capitol Hill staffers, Members of Congress, lobbyists and Washington insiders,” their letter to GAO stated.