Regulators Target Medicare Advantage Sales Practices

If you sell Medicare Advantage plans or advise your clients about buying them from other agents, watch out. That’s because regulators and lawmakers are zeroing in what they believe are abusive sales practices and even considering supplementing federal oversight of the market with a limited grant of authority to states.

This comes in the wake of ongoing media coverage about alleged abusive sales practices with Medicare Advantage fee-for-service plans. Last summer’s New York Times article (5/7/07) cited cases where agents used hard-sell tactics to pressure seniors into buying these products, even going so far as switching them out of traditional Medicare without their permission.

Although the Centers for Medicare and Medicaid announced new regulations to curb alleged abusive sales practices, there remains widespread concern that states need greater authority to protect consumers. This has led to pending legislation in the U.S. Senate, the Accountability and Transparency in Medicare Marketing Act of 2007.

In this environment, agents must never engage in the following sales practices:

• Pressuring beneficiaries to enroll in unsuitable or inappropriate plans.
• Leading beneficiaries to enroll without fully understanding that it will lead to loss of traditional Medicare and Medigap coverage.
• Misleading seniors about Medicare Advantage’s provider network or provider reimbursement policies.
• Mishandling enrollment applications.
• Not informing or misleading seniors about a plan’s cost sharing features.
• Using Medicare Part D (coverage for prescription drugs) to pressure a senior to buy Medicare Advantage or life insurance coverage.

What “Red Flags” are affecting your business? The National Ethics Bureau welcomes your input. Send your comments to: hlew@ethicscheck.com