Medicare Advantage plans, brace for a major change ahead in marketing enforcement. Your TV, print and digital ads — already monitored by “secret shoppers” and targeted for fines — will be subject to even closer scrutiny come 2023.
The Centers for Medicare & Medicaid Services (CMS) issued the warning recently, saying that CMS agents posing as consumers had called the 1-800 numbers in ads to simulate the experience of would-be members. They didn’t like what they saw.
“We have reviewed thousands of complaints and hundreds of audio calls and have identified numerous issues with information provided to beneficiaries that is confusing, misleading and/or inaccurate,” wrote Kathryn Coleman, director of the CMS group which administers plans including MA.
As a result, her letter went on to warn, the agency will continue to closely monitor marketing activities during the 2023 open enrollment, including TV ads, during the current five-day waiting period as prescribed under the ”File and Use” rule. Open enrollment season extends until Dec. 7.
Come Jan. 1, 2023, Coleman said, companies submitting ads under “File and Use” will no longer be able to self-certify their spots’ compliance and then begin airing them.
“No television advertisements will qualify for submission” under the file-and-use rule, she noted. In essence, until CMS approves them, ads won’t be able to run.
The rule-tightening stemmed from what the undercover shoppers found were marketers getting too aggressive in recruiting new business. That included national TV spots promoting MA plan benefits and cost savings which may only be available in certain service areas or for limited groups of enrollees.
Coleman also called out ads which “overstate the available benefits, or use words and imagery that may confuse beneficiaries or cause them to believe the advertisement is coming directly from the government.”
The Senate Finance Committee subsequently put a finer point on the matter, specifying problematic practices surfaced as a result of the committee’s own probe which began in August. In a report released this month, committee chair Ron Wyden (D-OR) and colleagues laid out a number of instances, from tricky print and TV ads and deceptive direct mail to misleading microsites and other fraudulent communication.
Widespread TV ads featuring celebrities (ahem, Joe Namath) claim that seniors are missing out on benefits, including higher Social Security payments, in order to prompt them to call an MA plan agent or broker hotlines. Interestingly, an older version of the Namath ad was updated for this year, following numerous lawsuits, to comply with CMS regulations.
Insurance agents even pitched seniors shopping at their local grocery store on switching their Medicare coverage or MA plan. The unsuspecting seniors were ostensibly told that their doctors would still be covered by the new plans, only to discover that — surprise! — their doctor is actually out-of-network, necessitating out-of-pocket charges for visits.
Others received mailers masquerading as official business from a federal agency, yet were actually spam from an MA plan or its agent/broker. Even the URLs of their websites, such as MedicareAdvantage.com, are designed to sew confusion, the committee observed. It gets even worse: several states shared examples where brokers targeted beneficiaries including those with cognitive impairments.
In fact, the number of complaints among Medicare beneficiaries about marketing for Advantage plans doubled from 2020 to 2021 (from 15,497 in 2020 to 39,617 in 2021), per the Senate report.
Who’s behind these shenanigans? Wyden and colleagues observed that sometimes it’s third-party marketing firms. These organizations and individuals, including agents and brokers, are paid to perform lead generation, marketing, sales and enrollment-related functions as a part of the “chain of enrollment,” the committee wrote.
It’s not the first time the plans’ marketing came under scrutiny. The Government Accountability Office (GAO) issued a report on MA marketing in 2009, saying that CMS took compliance and enforcement actions for inappropriate marketing against “at least” 73 organizations that sponsored MA plans from Jan. 2006 through Feb. 2009.
There are nearly 30 million older adults and people living with disabilities getting their Medicare benefits through a private MA plan. Additionally, with nearly 50 million people with a stand-alone Part D or MA plan with Part D coverage, the MA market will continue to be a highly competitive one plagued by practices that aren’t always above-board.
In her recent letter, Coleman reminded MA organizations and Part D sponsors that “they are responsible for the marketing activities of the agents and brokers and other third-party entities with whom they contract” and that her agency would be keeping close tabs.
She also wrote that the agency will take “compliance action against plans for activities and materials that do not comply with CMS’ requirements.” Although, she did not specify what form such actions could take.
In the meantime, it seems that open enrollment season is just as synonymous with health plans competing for business as it is for MA scam artists using misleading marketing to entice new members.
