Word Scam on the background of one hundred dollar bills
A new report from the U.S. Senate reveals that Medicare Advantage plans are misleading customers into switching from Original Medicare to a Medicare Advantage Plan.
What Is a Medicare Advantage Plan?
Original Medicare is a government program. Part A covers hospital bills and is free for most people who are over age 65 or disabled. Part B covers 80 percent of other medical bills, and the beneficiary pays a monthly premium. Medigap insurance policies are available to cover the beneficiary’s share of the cost. Part D pays for prescription drugs.
Medicare Advantage Plans are private insurance. While the law requires them to provide similar benefits, they often promise lower monthly premiums without disclosing disadvantages such as smaller physician networks and requiring preapproval for services. The misleading marketing tactics of some Medicare Advantage companies prompted the U.S. Senate Committee on Finance to commission a report to study it in August 2022.
What the Senate Medicare Advantage Report Revealed
The Committee recently released the report titled “Deceptive Marketing Practices Flourish in Medicare Advantage – A Report by the Majority Staff of the U.S. Senate Committee on Finance.” This report compiled and analyzed Medicare Advantage marketing complaints from 14 states. The Committee concluded that Medicaid beneficiaries are “inundated with aggressive marketing tactics as well as false and misleading information.”
The study found examples of seniors who lost access to their doctors who were now out of network after switching to a Medicare Advantage Plan. Other examples of deceptive activity involved telling customers that services would be cheaper when they were not and not disclosing that the customer would be required to obtain preapproval, even for some ongoing treatments.
The Committee Chairman, Ron Wyden, calls for the U.S. Centers for Medicare & Medicaid Services (“CMS”) to impose new marketing rules on Advantage Plan companies, such as prohibiting cold-calling. The report also called for CMS to help end deceptive marketing materials such as mailers that appear to be official government documents or that use “Medicare” in the company’s brand name.
What Is CMS Doing to Protect the Public?
CMS has taken steps to protect the public. In a recent letter from Kathryn A. Coleman, Director of CMS’s Medicare Drug & Health Plan Contract Administration Group, CMS describes some of its compliance checks. It engages in secret shopping for Medicaid Advantage Plans, calling advertised companies and evaluating whether their marketing activities are deceptive or misleading. The agency issues warning letters and fines for violations. In the letter, Coleman also reminds Medicare Advantage Plan companies that they are responsible for all the marketing activity of their agents and brokers.
The agency reported a significant increase in complaints of deceptive or misleading Medicare Advantage marketing activity in 2021, receiving nearly 40,000 complaints compared to 15,000 in 2020.
CMS is also fighting back against misleading television advertising. In her letter, Coleman states that starting January 1, 2023, no company can advertise a Medicare Advantage Plan on television without first obtaining CMS approval. CMS will review each ad for acceptance.
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