For Professionals: Medicare Fraud and Abuse

On the Fraud Front: Medicare Advantage Plans ‘Tell On’ Each Other

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Published: March 2, 2009

The implementation of the Centers for Medicaid and Medicare Services’ (CMS) new, more rigorous marketing guidelines for Medicare Advantage (MA) plans has led to some surprises. Mainly, our California Senior Medicare Patrol (SMP) office has witnessed MA plans actually policing each other and even sending us advertisements from other MA plans that allegedly violate the new rules. In forwarding these ads and violation reports to CMS, CMS has responded quickly, immediately contacting each plan and requiring them to change their ads and/or stop their activities where necessary.

In one instance, an MA plan’s ad requested beneficiaries to make a reservation before attending an informational session, hence providing an opportunity for the plan to collect their contact information. Plans, however, are only allowed to collect this contact information when scheduling an individual sales appointment with a beneficiary. This plan had to remove and revise their advertisement materials. Another plan was hosting an education session in one hotel meeting room and a sales event across the hall. Even though these activities were happening in two different rooms, CMS’ guidelines strictly prohibit any combination of educational and sales activities and this event demonstrated such a combination. Despite the plan’s considerable investment on advertising and hosting this event, CMS personnel showed up at the presentation, made the plan stop their activities and close down. While marketing regulations and oversight still require improvements, as discussed on our recent issue brief, New Medicare Marketing Rules Fail to Cure Problems in the Medicare Marketplace , CMS’ quick responses to these and other cases sends a strong message to the MA plans and they are responding.

In another case reported to us from the Merced Health Insurance Counseling & Advocacy Program (HICAP) , an insurance agent repeatedly identified himself as being from Social Security, and at other times stated he was from an independent firm. Upon reporting his activities, the company suspended the agent so that he could no longer sell their product. He still is, however, a licensed agent, free to market other companies’ products.

CHA’s SMP office is now working with the new SGS MEDIC North for reporting both agent misconduct (for MA and Part D plans) and Part D fraud. Their fraud report hotline is 1-877-7SAFERX, 1-877-772-3379.

SGS MEDIC North will be attending our SMP conference in late March (3/24-3/27) in Anaheim, Southern California. For more information on the conference, contact Anne Gray, our SMP Project Coordinator at .

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