CHA Blog

The California Department of Managed Health Care (DMHC) has issued an order barring a Folsom health insurance agent from selling Medicare Advantage plans, due to unscrupulous and deceptive practices against nearly a dozen local senior citizens. The agent, Nadia King, cancelled the Medicare coverage of elderly consumers without their consent or knowledge, and then enrolled them in private Medicare Advantage plans she represented, causing some to unknowingly incur unexpected medical bills.

Deceptive marketing of Medicare Advantage products to senior citizens is a growing problem in California and across the nation. California Health Advocates started receiving complaints from beneficiaries about deceptive marketing of Medicare Advantage products over 3 years ago, and has been working with both DMHC and California Department of Insurance (CDI) in finding resolution and ways for the 2 departments to work together in stopping such practices. California Department of Insurance has the power to revoke an agent’s license (as agents are licensed by CDI), and DMHC, according to state law, has the power to bar an agent from selling certain products if it is determined that a solicitor makes misrepresentations to consumers or acts in a manner that may expose them to substantial risk.

In this case of Naida King, the DMHC has indefinitely barred her from operating as a solicitor of Medicare Advantage plans to individuals eligible for Medicare. The order alleges that King solicited unsuspecting Medicare enrollees, using deceptive sales tactics to enroll them into the particular Medicare Advantage plans that she was selling.

Eleven local victims are identified in the order. In most cases, unsolicited contacts with elderly Medicare recipients either in their homes, by telephone, or some other means, resulted in Ms. King enrolling the victims in various Medicare Advantage plans, often without their knowledge or consent. Some of these victims experienced delays in medical treatment as a result of the unwanted change to their health coverage, or unexpected out-of-pocket charges, of up to $6,000 in one case.

DMHC, CDI, CHA and our Senior Medicare Patrol (SMP) program are collaborating in ongoing efforts to protect consumers from health care fraud and fraud insurance products. Both CDI and DMHC are actively investigating Medicare Advantage marketing abuse cases, CDI revoking some insurance licenses and DMHC issuing sanctions against insurance agents engaged in fraudulent activities. In addition, the DMHC has also been ordering unlicensed and fraudulent discount health plans to cease operation or seek licensure to ensure that the plans are selling a legitimate product, and has shut down a phony labor union health coverage scheme that put hundreds of consumers at risk of losing coverage.

Consumers and advocates with questions about health care fraud can contact our SMP program at 714-560-0309. People can also contact the DMHC Help Center for assistance in identifying legitimate health products at 888-466-2219, and CDI’s consumer hotline at 800-927-4357 for reporting insurance agent misconduct.

Also, below are a few reminders on how to avoid deceptive health care marketing schemes:

• Do not give personal information, such as Social Security numbers, bank account numbers, or credit card information.
• Be wary of unsolicited calls or visits at home, or an approach by someone at your doctor’s office, pharmacy or hospital.
• Do not take calls from someone claiming to be from Social Security or Medicare. Legitimate representatives from these programs will not call or come to your home unless you have contacted them to request it.
• Read and understand the health plan information.
• Consult family and friends before purchasing any health plan.

For general information on Medicare fraud and abuse, see our section Medicare Fraud.

Agents for Bankers Life and Casualty, a prominent 100-year-old insurance giant, were caught on tape training new recruits how to take advantage of the elderly.

Inside Edition video report

A report produced by Inside Edition, an American news magazine, has caught the attention of the U.S. Senate Committee on Aging, which has just launched an investigation into the company’s practices.

Among the many questionable sales pitches used is one where the agent calls on the elderly to sell Medicare supplemental insurance.  But once they are in an elder’s home, consumers say agents push them to invest their life savings into the company’s annuities, which can sometimes tie up their money well beyond their life expectancy.

As seen on Inside Edition’s undercover video, agents were told to think of themselves as “buzzards” and the elderly as their “prey.” They also told trainers to play on the fears of seniors, particularly their fear of confinement to a nursing home. “You need to actually put them in the nursing home,” said one trainer. “You need to almost bring them to tears,” said another. A trainer even encouraged the company’s agents to drive elderly clients to the bank to close the deal.

This national, well-known company is based in Chicago.  The training sessions caught on tape by Inside Edition were held in Charlotte, North Carolina.

The company has said it does not condone the depicted practices and is “conducting a thorough investigation of the issues raised by this report.”  So far, it says the investigation has found that the tactics shown in the report were limited to one branch office and “are not reflective of or consistent with our sales and training practices.”

View the full video online.

See our Medicare Fraud section for more information on fraud and abuse and who to contact for assistance.

This post was edited in part from Inside Edition’s report.

During our California Medicare Coalition statewide call yesterday, a representative from the Centers for Medicare and Medicaid Region IX office announced that CMS is terminating its contract with the Western Health Advantage plan as of May 31, 2010. This will affect about 600 Medicare beneficiaries in Sacramento, Yolo and Placer counties. These beneficiaries will be automatically enrolled into Humana’s Part D prescription drug plan as of June 1st. They will also be given a 30-day Special Election Period (SEP) to enroll into a different plan by July 31, 2010.

CMS sent out a letter to affected enrollees this week with this information, and advised them to call 1-800 Medicare or their local Health Insurance Counseling and Advocacy Program (HICAP) with any questions.

Julie Cohen at CMS Region IX is overseeing this transition. Advocates with client questions can contact her at julie.cohen(at)cms.hhs.gov.

The California Department of Insurance (CDI) has put together a good list of reminders to help beneficiaries protect themselves against predatory insurance sales practices during the annual election period for Medicare Advantage plans and the Medicare Prescription Drug Program. Below is a list of tips edited from their advisory notice (PDF).

Make Sure They’re Licensed: Not all people marketing Medicare Advantage plans are insurance agents. If the person you are dealing with claims to be an insurance agent, contact the CDI at 1-800-927-HELP or select their Check License Status link to verify license status. Insurance agents are required to print their license number on all business cards, quotations, and advertisements. Also, verify that the insurance company is licensed to do business in California.

Cold Calls Prohibited: Federal regulations prohibit “cold calls” which may take the form of uninvited sales calls, door-to-door visits, unsolicited emails, telephone calls or any other type of sales contact without your express invitation.

Be Stingy with Personal Information: Never give out personal information such as your Social Security number, bank account numbers, or credit card information over the phone. Verify that the person you are dealing with has proper authority to act on behalf of the plan before you provide your Medicare number. This is a good time to seek assistance from a trusted relative, friend or advisor.

Medicare Has No Official Sales Reps: Be wary of any salesperson who says that he/she is a Medicare representative. Medicare does not send “representatives” to solicit your business.

No Marketing in Educational or Care Settings: Federal regulations prohibit the marketing of Medicare products in places where health care is delivered (such as a doctor’s office, clinic, or pharmacy counter) or at an educational event.

No Such Thing as a Free Lunch: Federal regulations prohibit offers of free meals for listening to a sales presentation or for signing up in a particular plan. Do not fall victim to buying additional insurance products during any sales or marketing presentation for a Medicare Advantage or prescription drug plan. Federal regulations prohibit this type of “cross-selling.”

Don’t Let Them Oversell You: Federal regulations prohibit selling additional insurance products during any sales or marketing presentation for a Medicare Advantage or prescription drug plan. Know that you have rights! Contact the CDI if you have any questions about an insurance offer, scheme or agent. You can also contact your Senior Medicare Patrol (SMP) project through your local Health Insurance Counseling and Advocacy Program (HICAP).

Read and Understand the Plan: Be sure that the plan that you choose matches your needs and that you can continue to see your current health care providers if you wish. It may be very difficult or even impossible to “undo” your selection later.

You have rights! Contact the SMP project through your HICAP office at 1-800-434-0222 if you have any questions about an insurance offer, scheme or agent. You can also visit our website and/or contact CDI at 1-800-927-HELP (4357).

To educate others on these tips, you can use our updated 14-slide powerpoint presentation on Medicare marketing regulations.