Report Urges CMS to Increase Oversight of Medicare Advantage Marketing

After receiving evidence of deceptive marketing practices by Medicare Advantage plans, the Senate Finance Committee has offered recommendations to CMS for reducing marketing complaints and preventing fraudulent communications.

In August 2022, the Chair of the Senate Finance Committee, Ron Wyden (D-Ore.), launched an inquiry about potentially deceptive marketing practices that exploit seniors and people with disabilities in the Medicare Advantage program. Wyden sent letters to 15 states requesting information on Medicare Advantage and Part D plans.

The Committee received responses from 14 states and detailed the findings in a new report.

Nine out of the ten states that provided quantitative data on Medicare Advantage complaints saw an increase in complaints reported to their insurance commissioners or state health insurance assistance programs between 2020 and 2021.

The most common sources of complaints were mail advertisements, followed by robo-calls, telemarketers, and television advertisements. States frequently reported complaints about ads that promised an increase in Social Security checks as a misleading tactic to lure beneficiaries into plans.

Five states also reported that brokers targeted beneficiaries with cognitive impairments, while six states shared examples where beneficiaries were unaware they had been signed up for a Medicare Advantage plan.

Both states and CMS noted that third-party marketing organizations (TPMOs) were a source of complaints. TPMOs include organizations, agents, and brokers who are compensated for performing lead generation, marketing, sale, and enrollment-related functions for health plans.

“Older Americans and those living with a disability count on Medicare to deliver dependable and high-quality health care when they need it most,” Wyden said in a press release. 

“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. 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.” 

The report included several policy recommendations for CMS and Congress to prevent fraudulent marketing tactics in Medicare Advantage.

CMS has already taken steps to address the practices, requiring TPMOs to provide a disclaimer that they do not represent all plans. The agency also announced that it would resume conducting secret shopper studies during the 2023 open enrollment period and proactively review television ads.

However, the Committee urged CMS to reinstate Medicare Advantage consumer protections that were in place before the Trump Administration.

These protections include conducting regular oversight of Medicare Advantage marketing materials, prohibiting educational and marketing events from happening on the same day at the same place, requiring marketing materials to describe the grievance and appeals process, and requiring plans to report unlicensed agents to the state.

The Committee also recommended that CMS monitor disenrollment patterns and hold agents and brokers accountable if they do not follow best practices.

CMS should implement rules around Medicare Advantage marketing materials and close regulatory loopholes that allow cold-calling, the report said.

For example, the rules should prohibit Medicare Advantage plans from contracting with TMPOs that use materials suggesting they are from the Medicare program. Additionally, plans should be banned from contracting with agents and brokers that call beneficiaries several times a day for consecutive days.

The Committee also urged CMS to support unbiased sources of information for beneficiaries, such as state health insurance assistance programs and the Senior Medicare Patrol.

Better Medicare Alliance, a Medicare Advantage advocacy group, concurred with the Committee's findings.

“Every senior deserves clear, accurate information that empowers them to be active choosers about their Medicare options and we commend the Senate Finance Committee’s efforts to this end,” Mary Beth Donahue, president and chief executive officer of Better Medicare Alliance, said in a statement. 

“We strongly agree with the report’s 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.”

“Medicare Advantage health plans’ marketing communications today are subject to a clear set of guidelines, including requiring approval from CMS,” Donahue continued. “If outlier third-party marketing entities fail to maintain the high standard of accuracy and trust that Medicare beneficiaries deserve, those entities should face serious consequences.”

Lastly, the report asked CMS to issue several warnings for seniors and people with disabilities as the Medicare Advantage open enrollment period runs until December 7, 2022.

First, consumers should use caution if calling a tv helpline as the federal Medicare program does not advertise Medicare Advantage plans on television. Second, consumers should call 1-800-MEDICARE if they believe they have been enrolled in a new plan that does not work for them. Third, they should avoid providing personal information on unfamiliar websites or to unknown people.

Editor's note: This article has been updated to include a statement from Better Medicare Alliance.