CHA Blog

A newly released report from the U.S. Government Accountability Office (GAO) examines: 1) some of the effects that inappropriate marketing of MA plans have had on beneficiaries; 2) ways the Centers for Medicare and Medicaid Services (CMS) is assisting these affected beneficiaries; and 3) some of the limitations of this help due to insufficient data collection.

Below is an excerpt of the report’s highlights. For the full report, see: Medicare Advantage: CMS Assists Beneficiaries Affected by Inappropriate Marketing but Has Limited Data on Scope of Issue (GAO-10-36).

Highlights on what the GAO found:

CMS took compliance and enforcement actions for inappropriate marketing against at least 73 organizations that sponsored MA plans from January 2006 through February 2009. While the number of MA organizations varied during that time period, 192 MA organizations offered MA plans as of March 2009. Actions taken ranged from initial notices of noncompliance and warning letters to more punitive measures, such as civil money penalties and suspensions of marketing and enrollment. Nineteen of the 73 MA organizations had multiple types of actions taken against them.

CMS helped beneficiaries who experienced inappropriate marketing by providing special election periods (SEP) through which beneficiaries could disenroll from their MA plan and enroll in new coverage without waiting for the twice yearly regular enrollment periods. However, some beneficiaries experienced financial or access-to-care problems as a result of inappropriate marketing that could not be addressed by a SEP.

Financial hardships occurred, for example, when beneficiaries disenrolled from their MA plans and the withholding of premiums from Social Security for their former MA plan was not stopped promptly. In other cases, beneficiaries did not realize they had been enrolled in an MA plan until they tried to access services. Some of these beneficiaries experienced disruption of their access to providers and medications because their providers did not participate in the MA plan.

CMS has limited information about the number of beneficiaries who experienced inappropriate marketing. Some beneficiaries who experienced inappropriate marketing may have exercised their option to disenroll from their MA plans during regular enrollment periods and might not have notified CMS of the marketing problems they encountered. For example, about 21 percent of beneficiaries disenrolled during the regular enrollment periods in 2007 from one type of MA plan that CMS officials acknowledged had a high incidence of inappropriate marketing. However, CMS discontinued a survey after 2005 that collected information on reasons for disenrollment and could have provided important information about the extent to which the disenrollments were the result of inappropriate marketing. CMS officials said that they plan to reinstitute a survey on disenrollment reasons in late summer 2010.

CMS also has limited information about the number of beneficiaries who experienced inappropriate marketing because it did not directly track the number of SEP disenrollments. CMS did estimate the number of SEPs it provided for inappropriate marketing, but its estimates were based on data that were unreliable.

Our 2010 California Medicare Advantage Plans summary (PDF) is now available.  The document reviews the cost and types of MA plans offered throughout the state and also includes a county-by-county chart with the numbers of each MA plan type.  Information is summarized from the Center for Medicare and Medicaid  Services (CMS) data.

The 2010 stand-alone prescription drug plan (PDP) chart will be posted soon as well.

This week the U.S. Health and Human Services Department (HHS) cracked down on Medicare Advantage (MA) organizations for their “massive misinformation campaigns” to beneficiaries. A recent article in the Huffington Post specifically highlights Humana and the letter (PDF) they sent last week to their plan enrollees claiming that Congress and the President are considering proposals to cut “important benefits and services” of Medicare, thereby jeapardizing their coverage.

HHS has mandated Humana to cease all such mailings and to remove any such information from their website immediately.

Medicare Advantage (MA) plans are specifically barred from using plan-related communications to lobby for policies or legislation. They are also supposed to only talk about an enrollee’s current benefits, or determined benefit changes that are soon to occur, not about changes that may occur.

The Centers for Medicare and Medicaid Services (CMS) sent an official memorandum to all MA organizations and Medicare Advantage Prescription Drug (MA-PD) organizations stating:

CMS has recently learned that some Medicare Advantage (MA) organizations have contacted enrollees alleging that current health care reform legislation affecting Medicare could hurt seniors and disabled individuals who could lose important benefits and services as a result of the legislation. The communications make several other claims about the legislation and how it will be detrimental to enrollees, ultimately urging enrollees to contact their congressional representatives to protest the proposals referenced in the letter.

Our priority is ensuring that accurate and clear information about the MA program is available to our beneficiaries. Thus, we are concerned about the recent mailings as they claim to convey legitimate Medicare program information about an individual’s specific benefits or other plan information but instead offer misleading and/or confusing opinion and conjecture by the plan about the effect of health care reform legislation on the MA program and other information unrelated to a beneficiary’s specific benefits.

David Lipschutz, our staff attorney, who has often voiced concern on the way Medicare providers communicate with Medicare plan members about political matters, said that: “While recent examples are more blatant than in the past, over the last few years the insurance industry has tried to convince Medicare private plan enrollees to join ‘grassroots’ organizations that are designed to protest any cuts to Medicare Advantage plan payments, sometimes using misleading and/or inaccurate rhetoric. We hope that this broader practice is also prohibited.”

If you hear of any other plans sending similar letters and messages to beneficiaries as Humana, please let us know. You can contact David Lipschutz directly at .

Currently, Medicare Advantage (MA) beneficiaries with at least $4,000 worth of annual drug costs are eligible for pharmacy consultations at no cost. These consultations are provided to ensure: 1) people understand how to use their medication, and 2) the medication prescribed will not produce adverse side-effects with other medications the person may be taking.

In 2010, new guidelines from the Center for Medicare and Medicaid Services (CMS) will broaden the pharmacy consultation benefit to more MA beneficiaries. Health plans will be prohibited from restricting access to the benefit to members with a high number of chronic health conditions and medications, and the annual drug cost limit will be reduced from $4,000 to $3,000. Also, under the revised guidelines, MA plans will be required to review their member rolls on a quarterly basis to identify eligible members for the program. 

Pharmacists will be paid $50 by the health plans to review a beneficiary’s medications and make recommendations to their physician. Pharmacists will receive additional payments if they recommend a less-costly, therapeutic equivalent to the patient. This may be an important step, both in reducing health care costs and in improving people’s overall health as less medications reduce side effects and harmful interactions between medications.

For information on Medicare’s Part D drug coverage, see:

• Prescription Drugs – Medicare Part D

California state law (SB 853) requires private health plans to provide health care services in a consumer’s language. This law went into effect January 1, 2009 and is a significant step in making our state’s healthcare system and services accessible to all people, including those with limited English proficiency (LEP). 

The state’s Department of Managed Health Care, Office of Patient Advocate has some flyers in English, Spanish and Chinese to educate consumers about their rights to receive services in their own language. 

SB 853 Consumer Alert:

• English & Spanish
• Chinese

Note that due to federal preemption, Medicare Advantage (MA) plans are not required to comply with SB 853. Yet, some organizations that offer MA plans also offer non-MA plans in California, which are required to comply with SB 853.  Organizations that already have language access services set up for their non-MA plans may, on their own, set a policy to offer language services to all their enrollees, including their MA plan enrollees. Currently, Medicare standards for offering language services focus on marketing and enrollment, versus the provision of health care services.

Please help spread the information on this new law mandating language access services. Also, let us know of any cases of MA plans not providing language access to limited English proficient clients. We will use this information in our advocacy efforts.

Email us at news@cahealthadvocates.org. 

More info on language access, see:

• Are Your Services Available to Those Who Need Them?

Top 10 Most Requested Foreign Languages in California:

1. Spanish
2. Cantonese
3. Mandarin
4. Vietnamese
5. Korean
6. Russian
7. Farsi
8. Arabic
9. Punjabi
10. Tagalog

We recently published an issue brief exploring how the new marketing rules for the sale of Medicare Part C and D plans have failed to cure the problems in Medicare’s marketplace. 

Even though, Congress and the Centers for Medicare and Medicaid Services (CMS) have made progress in their recognition of and efforts to address marketing misconduct in the Medicare marketplace, many problems persist. This year Congress passed the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) and CMS has issued implementing regulations and clarifying guidance. Many of the statutory and regulatory changes do improve beneficiary protections, but they also have some significant loopholes and/or exceptions, and it is yet unclear how some of the rules will be implemented. Some of these new rules are codifications of existing rules (e.g. a prohibition on unsolicited door-to-door marketing) that, in the view of those assisting Medicare beneficiaries, have been widely flaunted. Although the new rules will help, this issue brief points out how and why marketing misconduct continues. It discusses some ongoing systemic barriers to adequate oversight of the Medicare marketplace, such as the federal preemption that still plagues the regulation of Medicare Advantage and Part D plans by hindering or even preventing action at the state level, and the sporadic oversight and enforcement actions at the federal level.

This brief also reviews some of the changes in marketing rules implemented in 2008 by identifying strengths, weaknesses, and room for improvement. The brief is organized as follows:

• Part I provides a short overview of regulation changes to the Medicare marketplace in the last couple of years;
• Part II explores unresolved systemic issues that prevent adequate oversight of marketing in the Medicare marketplace;
• Part III analyzes selected new marketing rules, including their shortcomings;
• Part IV provides recommendations to better protect consumers from marketing abuses;
• Appendix 1: is an update on Medicare Advantage “Gap” Plans (following-up on an issue brief on the subject drafted by California Health Advocates in November 2007), along with a couple of examples of ongoing marketing of these products to agents; and
• Appendices 2 and 3 are examples of marketing documents referenced in the text.

View the full issue brief (pdf).

Also, learn more about Medicare Advantage plans and Medicare Part D plans.

CHA recently submitted comments drafted jointly with various advocacy organizations on the Center for Medicare and Medicaid Services’ (CMS) proposed rules. The comments reveal how proposed compensation rules actually encourage unsuitable Medicare Advantage enrollments. This is because, under the current rules, commissions are nearly double for enrolling beneficiaries new to Medicare Advantage versus commissions for people staying in their current plans or switching to a similar MA plan. The rules encourage agents to focus enrollment efforts on people new to Medicare, or those in Original fee-for-service Medicare who have a Medicare supplement plan (Medigap), Medi-Cal, or employer or retirement coverage. This poses a problem because it is precisely these beneficiaries—those who are accustomed to the wide provider access, protection against catastrophic expenses and predictable monthly expenses of a Medigap supplemental plan, who may have all Medicare cost-sharing and additional benefits paid by Medicaid, or who stand to lose supplemental coverage from a former employer —for whom a Medicare Advantage plan is often unsuitable. 

The comments include several recommended changes to these rules and agent compensation structures.

View full comments.

According to a recent Government Accounting Office (GAO) report on Medicare Private Fee For Service (PFFS) plans, in April 2007, beneficiaries in PFFS plans tended to be healthier and generally younger than beneficiaries in other Medicare Advantage plans and fee-for-service Medicare. Specifically, projected health care expenditures for PFFS beneficiaries were 7% less than the projected average for beneficiaries in other MA plans and 10% less than the projected average for beneficiaries in fee-for-service Medicare. Beneficiaries in PFFS plans also generally were more likely than beneficiaries in other MA plans and fee-for-service Medicare to reside in rural areas where fewer other MA plans were available. In addition, about 81% of beneficiaries who were new enrollees in PFFS plans were in fee-for-service Medicare before enrolling in their plan, compared to 65% in other MA plans.

A recent Medicare Advantage (MA) enrollment boom is largely due to employers using the program to cover their retirees, according to a recent Kaiser Family Foundation report, prepared by Avalere Health. Employers can contract with MA plans to provide Medicare and supplemental benefits to Medicare-eligible retirees. The report shows that employers are increasingly using private fee-for-service (PFFS) plans over other types of MA plans as an option for offering retiree health benefits.

Between 2006 and 2008, the number of Medicare beneficiaries enrolled in Medicare Advantage group plans increased to 1.7 million, from 900,000, and most of that growth came from growth in employer PFFS plan contracts.

Prospects for continued enrollment growth in the group PFFS market, however, are uncertain because of changes in Medicare Advantage payments and the Medicare Improvements for Patients and Providers Act (MIPPA) of 2008 signed into law in July that will require PFFS plans to create provider networks by 2011. See our article on MIPPA for more information.

Also see our website sections on:

• Medicare Advantage
• Retiree Plans