Widespread Medicare Advantage (MA) marketing scams and deception often result in beneficiaries switching — without their knowledge or consent — to plans that don’t cover their providers or their needs, according to a new report from the majority staff of the US Senate Finance Committee.
Committee Chairman Ron Wyden (D-Ore.) and other members give examples of “bait and switch” schemes, “aggressive” and “underhanded tactics” and “predatory actions,” such as officers approaching seniors at grocery stores and giving “false and misleading information,” or handing out documents that falsely imply they are from Medicare or another federal agency rather than a private company .
Marketing Scams
The majority committee collected complaints from 14 states, Medicare advocacy organizations and federally funded Medicare Assistance Programs (SHIPs), “painting a consistent national picture” of deceptive practices.
They noted that MA plan ads are not harmless. “Some people who are victims of marketing and enrollment scams delay care due to confusion over their benefits and coverage instability. Many feel frustrated and embarrassed that they have been scammed,” they wrote. writing.
“False and misleading marketing advertisements and fraudulent sales practices undermine access to care and beneficiaries’ confidence in the Medicare program,” they added.
David Weil, program manager for the equivalent SHIP program in San Diego, agreed with the committee’s report, noting that “the problem of misleading and deceptive advertising has plagued the Medicare Advantage landscape for the 15 years that I I was involved in the program.”
“Coupled with unethical and unscrupulous brokers, complaints from beneficiaries always seem to skyrocket in January and February after they discover that what they were told during the annual election period or what they thought was the case turns out to be wrong. Our counselors then find themselves trying to fix the wrong and get them back on track for positive health outcomes,” he said. MedPage today.
Despite these deceptive practices, the Centers for Medicare & Medicaid Services (CMS), which has oversight authority over MA marketing materials, has made “only one enforcement decision” related to deceptive marketing practices since September 2017. action 2019against Solis Health Plans of Miami, resulted in a fine of just $41,552.
Joe Namath Disappointment
The report points to complaints about particularly dishonest television ads advertising the “Medicare Coverage Helpline”, which features celebrities such as former football star Joe Namath.
“In the ad, Mr. Namath says, ‘get what you deserve’ and ‘the benefit that adds money to your social security check.’ After numerous lawsuits, the ad has recently been updated to comply with current CMS regulations,” the report states. “However, it still does not mention basic information about the MA program, including the fact that not all providers are in-network and was only recently updated to mention that benefits vary by postcode. .”
What’s particularly troublesome for Tatiana Fassieux, an educator with California Health Advocates, a SHIP-affiliated program in northern California, is “the explosion of new plans with no premiums, deductibles or even co-payments,” which are turn out to be lacking providers among customers. networks. Television ads reach large geographic areas and often enroll beneficiaries in plans without a provider in their county, thus burdening councilors with “the task of sorting out the mess.”
“Even though CMS has imposed more restrictions on TV and other media marketing for 2023, third-party marketers don’t care!” she said MedPage today.
A 2020 investigation by the House Committee on Energy and Commerce found that 14,000 third-party agents and brokers in 40 states were linked to the company sponsoring the helpline ads, TogetherHealth, a subsidiary of Benefytt Technologies, formerly known as Health Insurance Innovations, or HII. .
According to the report, “HII’s operation and business structure encourage third-party agents and brokers to actively target vulnerable consumers seeking comprehensive health coverage.”
Through 1-800 calls and online plan search tools, TogetherHealth generates “leads” for thousands of agents and brokers with the names of potential MA beneficiaries in what the report calls “a network tangled up of actors that regulators need to untangle to oversee and regulate the MA marketing plan.”
For example, in Missouri, “an elderly consumer in a long-term care facility with no ability to make her own decisions called the number advertised on television. During the call, she went from plan to plan. other.”
Trump regulatory rollbacks
The report specifically blamed the Trump administration for rolling back “common sense business regulations” in 2018, when it limited the types of documents regulated and removed the requirement that marketing materials include the claims process. and consumer appeal.
These regulatory relaxations also removed the requirement for plans to terminate unlicensed agents and brokers and notify the registrant, making it harder for regulators to identify bad actors, according to the report. It also prevented enrollees from knowing that they might be eligible for a special enrollment period to enter a more suitable plan if they had already enrolled based on false information.
Additionally, on January 19, 2021, a day before the end of Trump’s presidency, his administration expanded permitted marketing activities to healthcare facilities, including waiting rooms and common entrances.
The report did not mention a common problem that many MA enrollees face when they realize that they have been enrolled in a plan that does not provide the benefits they expected or that requires co – high payments or deductibles, such as hundreds of dollars in co-payments. for each day of hospitalization. If, after a one-year trial period, they try to opt out and apply for a top-up plan to cover these costs, their medical condition may cause them to be rejectedresulting in a $1,600 deductible for each day of hospitalization, as well as a 20% co-payment for most other encounters.
Regulatory fixes
The report recommended five actions to end deceptive practices:
- Reinstate requirements eased under the Trump administration, such as tightening prohibitions against educational events and marketing events taking place on the same day at the same location
- Monitor unsubscribe patterns and use CMS enforcement authority to hold “bad actors” accountable
- Require agents and brokers to review their clients’ prescription drugs and regularly visit health care providers to ensure the plan meets beneficiary needs, considered “best practices”
- Implement strict rules around MA marketing materials and close regulatory loopholes that allow cold calling. CMS should prohibit PA plans from entering into contracts with marketing organizations, agents, or brokers who design materials that include Medicare use in the trade name or suggest that they are from Medicare. The agency should also prohibit MA plans from entering into contracts with agents and brokers who purchase prospect lists, particularly from online “bait and switch” ads. CMS should review its agent/broker compensation model “to ensure that agent/broker incentives align with beneficiary interests and do not distort incentives to choose” one plan over another
- Support unbiased sources of information for beneficiaries, including sufficient resources for SHIP and the Senior Medicare Patrol program, described as “valuable partners in … identifying local and national actors who mislead or deceive beneficiaries “
“Every senior deserves clear and accurate information that enables them to actively choose their health insurance options, and we commend the efforts of the Senate Finance Committee to that end,” said Mary Beth Donahue, President and CEO. of the Better Medicare Alliance, which represents more than 180 provider groups, health systems, and health plans.
“We fully agree with the report’s recommendation that CMS use its enforcement power to hold bad actors accountable and we welcome increased direct oversight of third-party marketing organizations, whose activities are currently regulated differently from marketing conducted by health plans,” she added. “Medicare Advantage health plan marketing communications today are subject to a clear set of guidelines, including CMS approval. If aberrant third-party marketing entities fail to maintain the high level of accuracy and trust that Medicare beneficiaries deserve, these entities should have serious consequences.”
A recent MedPage today report showed how brokers earn double commission for enrolling a beneficiary in an MA plan versus the traditional Medicare/Medigap plan.
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