A multi-state survey revealed a substantial increase in marketing materials and tactics designed to trick seniors in Medicare Advantage (MA).

A new report released Thursday by Senate Finance Committee Chair Ron Wyden, (D-Ore.) revealed new information about an increase in deceptive marketing practices targeting seniors with MA plans. The report is based on information the committee received after Wyden requested data about MA marketing complaints from 15 state insurance commissioners and state health insurance assistance programs.

Nine out of 10 states that provided quantitative data saw an increase in complaints to their insurance commissioners between 2020 and 2021.

RELATED: Senate committee to probe deceptive MA marketing practices

The report corroborates Centers for Medicare & Medicaid Services (CMS) data reporting that the number of beneficiary complaints related to the marketing of MA plans doubled between 2020 and 2021.

Examples of bad behavior

The Senate findings expose tactics used by insurance companies, brokers, and third-party marketers to push seniors to sign up for their plans, including deceptive mail advertisements, misleading claims about increasing Social Security benefits, aggressive in-person marketing tactics, and enrolling beneficiaries, particularly those dually eligible for Medicare and Medicaid in a new plan without their consent. Examples outlined in the report include insurance agents selling new MA plans telling seniors that their doctors are covered by the new plans, but once they switch plans the seniors find out months later that their doctor is out-of-network, and they must pay out-of-pocket to visit their doctor. Some seniors complained they were called by an insurance agent 20 times a day, attempting to convince them to switch their Medicare coverage.

“It is unacceptable for this magnitude of fraudsters and scam artists to be running amok in Medicare and I will be working closely with CMS to ensure this dramatic increase in marketing complaints is addressed,” Wyden said in a statement. “Medicare Advantage offers valuable plan options and extra benefits to many seniors, but it is critical to stop any tactics or actors that harm seniors or undermine their confidence in the program.” 

RISE has also been alarmed about the deceptive practices, which first came to light in 2021 during the annual Medicare Marketing & Sales Summit and the AEP Medicare Readiness Summit. To address these concerns, RISE formed a workgroup and in September released an analysis and set of recommendations for MA plans to combat advertising tactics that mislead and confuse MA beneficiaries.

The RISE initiative on third-party marketing organizations in Medicare Advantage

Panel recommendations

The Senate Finance Committee report urges CMS to take the following actions to reduce the prevalence of these tactics:

  • Reinstate requirements that were loosened during the Trump administration
  • Monitor disenrollment patterns and use CMS’ enforcement authority to hold bad actors accountable
  • Require agents and brokers to adhere to best practices
  • Implement robust rules around MA marketing materials and close regulatory loopholes that allow cold calling
  • Support unbiased sources of information for beneficiaries, including State Health Insurance Assistance Programs and the Senior Medicare Patrol

CMS tightens enforcement

Meanwhile, CMS has warned all MA organizations and prescription drug plan sponsors that it will increase its oversight during the 2023 open enrollment. In an October 12 letter, Kathryn A. Coleman, director of the CMS’ Medicare Drug and Health Plan Contract Administration Group, told the MA plans that the agency has reviewed thousands of complaints and hundreds of audio calls and identified numerous information provided to beneficiaries that is confusing, misleading, or inaccurate.

CMS has also conducted “secret shopping’ by calling numbers associated with television advertisements, mailings, newspaper advertisements, and internet searches to monitor the experience beneficiaries have engaging these entities. Secret shoppers have discovered that some agents do not comply with current regulations and unduly pressure beneficiaries and fail to provide accurate or enough information to assist a beneficiary in making an informed enrollment decision.

Coleman said CMS is especially concerned with national television commercials that promote MA plan benefits and cost savings, which may only be available in limited-service areas or for a limited group of enrollees, overstate the available benefits, as well as use words and imagery that may confuse beneficiaries or cause them to believe the advertisement is coming directly from the government.

As a result, she said that beginning January 1, 2023, no television advertisements will qualify for submission under CMS’ File and Use authority. In addition, CMS will continue to review all previously submitted television advertisements to confirm the materials meet CMS requirements. Non-compliant television commercials must be discontinued, and plans that continue to use CMS-disapproved advertisements may be subject to compliance action.

CMS said it will also take the following actions during the 2023 AEP and into contract year 2023:

  • Enhance CMS review of select marketing materials submitted under File & Use criteria
  • During AEP, CMS may prohibit the distribution of File & Use materials prior to the expiration of the five-day plan waiting period
  • CMS may, at any time, determine an accepted material is not in compliance with its rules and require modification and resubmission
  • Review selected marketing materials previously submitted under File & Use criteria
  • Review all marketing complaints received during the AEP and will target its oversight and review on MA organizations and Part D sponsors with higher or increasing rates of complaints during the AEP
  • Review recordings of agent and broker calls with potential enrollees
  • Conduct secret shopping marketing events by reviewing television, print, and internet marketing and calling related phone numbers and/or requesting information via online tools