Senior women gather to boogie board on International Women's Day in Solana Beach, California
A senior women's group hit the beach for a morning boogie boarding session in the ocean waves on International Women's Day, amid the outbreak of the coronavirus disease (COVID-19) in Solana Beach, California, U.S., March 8, 2021.

A new report from the U.S. Senate Finance Committee documents a range of fraudulent and misleading marketing practices used to sell Medicare Advantage plans - and some of them are real eye-openers.

A Medicare Advantage promotional mailer designed to look like a form from the Internal Revenue Service. A "Medicare bus" trundling around Ohio advertising an internet address that takes users to an insurance brokerage website. Insurance agents accosting seniors in grocery store parking lots, or making enrollment pitches to vulnerable seniors who have cognitive impairment.

The committee solicited input from state insurance commissioners and the national network of State Health Insurance Assistance Programs (SHIP), which assists seniors with Medicare enrollment.

The findings come on the heels of a report by the Centers for Medicare and Medicaid Services (CMS), which runs Medicare, that it received 39,617 complaints about the marketing of Medicare Advantage and Part D drug plans in 2021 - a dramatic increase of 155% compared with the number of complaints received in 2020.

The Senate report is especially timely, since it lands in the midst of the annual Medicare open enrollment season. This is the time of year when seniors can make changes in their health insurance choices - and also must be prepared for a barrage of advertising and marketing pitches.

Commercial insurers market both Part D and Medicare Advantage plans. But the report found that the deceptive practices are most prevalent with Advantage, the commercially offered managed-care alternative to traditional fee-for-service Medicare.

At the center of the problem are third-party marketing organizations that contract with the insurance companies that run Advantage plans. "Information submitted by states demonstrates that beneficiaries are inundated with fraudulent and misleading communications across all modes of communication (in-person, television, telemarketer, and robo-calls," the Senate committee report states.

The investigation turned up a wide range of predatory marketing, including:

- Agents who sign up beneficiaries under false pretenses, such as telling them that coverage networks include healthcare providers who are not actually in the networks.

- Agents who change the plans of seniors and people with disabilities without their consent.

- Targeting low-income individuals who are eligible for both Medicare and Medicaid (so-called dual eligibles", who are allowed to switch Advantage plans once every quarter.

A CRACKDOWN IS NEEDED

CMS announced new rules earlier this year aimed at curbing deceptive advertising practices by third-party marketers. But the Senate report urges CMS to do more. In particular, it points to the Trump administration's loosening of marketing regulations, which needs to be reversed. It also recommends that CMS increase its monitoring of Advantage plans and require agents and brokers to "adhere to best practices."

And it calls on CMS and Congress to support unbiased sources of enrollment information for seniors, such as the SHIP network.

Each state operates a SHIP program, staffed largely by trained volunteer counselors. The federal government provides funding, but at a much lower level than the dollars provided for the navigator program under the Affordable Care Act. The ACA program funding is $99 million for fiscal 2023, more than double the $49 million in federal SHIP funding for 2020. That reflects upside-down spending priorities - more than 64.8 million Americans are enrolled in Medicare, compared with 14.5 million enrolled in ACA marketplace plans, according to CMS data.

Not all brokers employ the deceptive tactics identified in the Senate report, and some are very knowledgeable about Medicare. But it is important to understand that brokers earn a living through commissions, so they have a built-in bias to sell their own product lines.

"A lot more really needs to be done both for purposes of oversight of the way plans are marketed, but also consumer protections," said David Lipschutz, associate director and senior policy attorney at the Center for Medicare Advocacy.

The relationship between third-party marketing organizations and the plans themselves is another area worthy of investigation. The Better Medicare Alliance, a Medicare Advantage research and advocacy organization, said in a statement that it supports the Senate committee report recommendation "that CMS use its enforcement authority to hold bad actors accountable, and we welcome increased direct oversight of third-party marketing organizations, whose activities are currently regulated differently from the marketing conducted by health plans."

But there is a regulatory gap here that needs to be addressed, according to Lipschutz. CMS has limited authority to regulate brokers, who are generally overseen by state regulators. So CMS should hold Advantage plans responsible for the marketing activities of their third-party marketers.

"If CMS more strictly connected the activities of agents and brokers and the misconduct with the plan sponsors, that would go a long way towards cracking down on the problems," he said.

Asked to comment on the report, a CMS spokesman notes that the agency holds Medicare Advantage and Part D plans responsible for the activities of the agents who work on their behalf, and said it can take compliance actions against them.

"CMS appreciates Chairman Wyden and the Senate Finance Committee's leadership on the important issue of Medicare Advantage marketing," Chiquita Brooks-LaSure, administrator of CMS, said, referring to U.S. Senator Ron Wyden. "We are currently reviewing the report and recommendations."

PROTECTING YOURSELF

During fall enrollment season, remember that Medicare rules do not permit insurance brokers to contact you to pitch plans unless you have given them advance permission to be in touch - for example, if you already do business with an agent or contacted one for information. That prohibition includes phone calls and emails, or approaching you in a public place.

CMS encourages anyone concerned about a specific misleading advertisement to call 1-800-MEDICARE (1-800-633-4227) to report the ad. The Federal Trade Commission offers a list of tips for avoiding Medicare fraud.

(Writing by Mark Miller; Editing by Matthew Lewis)