The Medicare Advantage Crackdown: Ensuring Ethical Advertising Practices
It’s been a long time coming, but it’s finally here: Medicare is set to crack down on Medicare Advantage companies and their misleading advertising strategies. These tactics, which often veer into exaggeration and deception, have been causing immense harm to consumers, and it’s time these companies were held accountable.
In this blog post, we’ll cover three critical areas:
- The persistent problem caused by these Advantage companies
- How these companies have managed to get away with their practices
- The new rule that will change everything
The Problem with Misleading Ads
When you initially start using Medicare, there are two essential choices available: choosing to stay with original Medicare (A and B) where Medicare pays first, then supplementing with additional plans to fill in the gaps, or choosing to take an Advantage Plan (Part C). The latter option replaces the traditional Medicare Parts A and B with a plan completely overseen by a private health insurance company. And here’s where the issue begins.
Advantage companies regularly advertise their plans online, in the mail, and on TV, enticing consumers with benefits and advantages that are not always accurate or complete. Sometimes, the plans are overstated, and the details conveniently hidden in the fine print. Other times, benefits are highlighted as if everyone is eligible, even when a significant majority will not qualify. This form of marketing of Advantage Plans has ballooned over recent years, causing many consumers to be misled and ultimately left dissatisfied.
For instance, advertisements may suggest that everyone who enrolls into an Advantage Plan will have money added to their Social Security checks, transportation benefits, dental work coverage, and more, without properly disclosing that many of these benefits would be based on individual qualifications and might not apply to everyone.
A Memo Cracking Down on Misleading Ads
Recently, a memo from Catherine Coleman, the Director of the Medicare Drug and Health Plan Contract Administration Group, signaled the end of these misleading practices. It stated that the agency was concerned about national television advertisements promoting Medicare Advantage Plan benefits, which may not be available everywhere or to all plan enrollees. The agency also emphasized that it was particularly bothered by ads using words and imagery that could confuse beneficiaries and make them believe they were directly from the government.
Coleman further explained that Medicare had reviewed thousands of complaints and hundreds of audio calls. Many of these calls revealed that beneficiaries were being provided with information that was confusing, misleading, or outright incorrect. The goal of these ads wasn’t to educate consumers about the products, but to get them to call their toll-free numbers, often resulting in hasty enrollments into Advantage Plans that did not fully meet address their healthcare needs.
Tactics Used By Medicare Advantage Advertisers
Consider an ad featuring former professional football quarterback Joe Namath promoting the Advantage Plan. The advertisement highlights several benefits like transportation services, meals, dental work, and extra income added to your Social Security check. However, what the ad fails to convey is that not everyone qualifies for these benefits, and those who do, might find out that coverage in other areas is reduced.
In the fine print, it states that plans’ benefits vary, and premiums, copays, and coinsurance may apply, essentially contradicting the “all zeros” promise made by Mr. Namath.
Companies use this tactic to entice consumers into calling their toll-free number where they learn that they likely do not qualify for such benefits, and are then swayed into enrolling in some other type of Medicare Advantage plan.
The Long-Term Impact of Misleading Ads
Being trapped in an Advantage plan can have disastrous long-term effects on a consumer’s health coverage. Advantage plans have certain limitations, including operation under a network structure, which means restrictions around which doctors and specialists you can see.
Also, all Advantage plans have pre-authorizations, meaning even if your doctor recommends a treatment or test, the plan has the final say on whether it’s needed. Sometimes, these authorizations can lead to delayed or denied coverage, leaving you waiting longer for necessary medical tests or procedures.
Most detrimental, however, is the fact that if you’ve been on an Advantage Plan for a year or more, and your health changes, switching to an original Medicare supplemental plan requires medical underwriting. If you have any significant health issues, you might not be approved to make the switch, essentially locking you into your Advantage Plan for life.
The New Rule: A Solution to Misleading Ads
To bring an end to these deceptive practices, the Center of Medicare and Medicaid Services (CMS) has introduced a new rule. Starting from January 1, 2023, Medicare Advantage organizations and Part D drug plans will be required to submit all their advertisements for CMS approval before they go live.
This means these companies will no longer operate under the “file and use” framework, which allowed them to start using their marketing materials within five days of filing, provided they signed off as compliant.
Instead, starting next year, all advertising will undergo CMS scrutiny, taking no longer than 45 days for evaluation and approval. This ensures that materials going out to the public have been thoroughly vetted for accuracy and compliance to prevent consumers from being misled.
*” CMS is concerned about the marketing practices of all entities… we have reviewed thousands of complaints and hundreds of audio calls, have identified numerous issues with information provided to beneficiary that watch listen is confusing, misleading or inaccurate.” – Katherine Coleman, Director of the Medicare Drug and Health Plan Contract Administration Group*\
Additionally, CMS’s undercover ‘secret shopper’ team will be continuing audits to catch any non-compliant activity and hold the culprits accountable.
In summary, the deceptive tactics employed by various Medicare Advantage companies have left Medicare beneficiaries feeling confused and dissatisfied. However, with the implementation of new regulations, there is hope that transparency will prevail, empowering beneficiaries to make well-informed decisions when choosing their plans. This crucial shift will prioritize the health and well-being of consumers over the financial gains of insurance companies.
