Federal health officials are proposing an expanded set of stricter rules for private Medicare Advantage health plans, in response to widespread complaints that too many patient medical claims have been falsely denied and that marketing of the plans is deceptive.
Medicare Advantage is the private sector alternative to the federal program for people age 65 and older and the disabled. By next year, more than half of Medicare recipients are expected to be enrolled in private plans. These policies are often less expensive than traditional Medicare and sometimes offer attractive additional benefits, such as dental care.
Despite their popularity, the plans have recently been the subject of much scrutiny and criticism. A recent report from the inspector general of the US Department of Health and Human Services found that several plans could falsely deny care to patients. And nearly every major insurance company in the program, including UnitedHealth Group, Elevance Health, Kaiser Permanente and Cigna, has been sued by the Justice Department for fraudulent overcharge to the government.
The period leading up to this year’s filing deadline, December 7, intensified widespread criticism of the deceptive tactics some brokers and insurers had used to trick people into changing plans. In November, Senate Democrats released a damning report detailing some of the worst practices, including ads that appeared to represent federal agencies and ubiquitous celebrity TV commercials.
Federal Medicare officials had said they would review television advertising before it aired, and the new rule targets some of the practices identified in the Senate report that caused some consumers to confuse the companies with the Medicare program from the government. A proposed regulation would ban plans from using the Medicare logo and require the company behind the ad to be identified.
“It’s certainly a shot across the bow for brokers and insurers in response to the rising number of complaints about deceptive marketing activities,” said Tricia Neuman, executive director of the Center for Medicare Policy at the Kaiser Family Foundation. Ms. Neuman and her team routinely watch television commercials of the plans.
The proposal would also allow beneficiaries to opt out of marketing calls for plans and limit how many companies can contact a beneficiary after he or she fills out a form requesting information. The Senate report described patients who had received dozens of aggressive marketing calls they hadn’t asked for.
David Lipschutz, an associate director at the Center for Medicare Advocacy, said that while the federally proposed rules didn’t cover everything on his wish list, the goals were far-reaching and significant.
“This is a really meaningful response,” he said. “And where we are, we don’t say that very often.”
Mr. Lipschutz said the changes will ultimately be judged by how effectively and aggressively Medicare enforced standards. Much of the deceptive marketing is now carried out by brokers, agents and other third-party marketing companies who receive commissions when they enroll people, not the insurers themselves. The proposed rule would hold insurers accountable for the actions of the companies they hire.
“These proposals are an important step toward protecting Medicare seniors from scammers and unscrupulous insurance companies and brokers,” Sen. Ron Wyden, the Oregon Democrat who chairs the Senate Finance Committee, said in a statement.
The rules would also cover the health plans’ use of techniques that require the company to approve certain care before it is covered. Patients and their doctors complained to Medicare that the private plans abused pre-authorization processes to deny needed care. The Inspector General’s report estimated that tens of thousands of people had been denied the necessary medical care that should be covered by the program.
The new proposal would require plans to disclose the medical basis for denials and rely more on specialists familiar with a patient’s care to be involved in decision-making. Medicare has also set tighter time limits for responses to authorizations; patients now often wait up to 14 days. The new rules would also require consent for the full duration of a treatment, so patients wouldn’t have to constantly ask for identical approvals.
Dr. Meena Seshamani, the director of the Center for Medicare and a deputy administrator at the Centers for Medicare and Medicaid Services, said the changes were influenced by thousands of public comments requested by the agency and lawmakers.
“The proposals in this line, we think, would be a really meaningful improvement for people in Medicare’s timely access to the care they need,” she said.
The insurance industry has said it generally supports regulators’ efforts to protect Medicare enrollees from misleading marketing, and the Better Medicare Alliance, a group that advocates for Medicare Advantage, said they agreed with officials “that there is no space in the system.” for those who would defraud seniors,” said a statement from the group’s CEO, Mary Beth Donahue.
Ms. Donahue added that her group continues to review the agency’s proposals on how patients should seek prior authorization for treatment. She said the organization hoped to work with Medicare officials to improve the process.
Hospitals, which have pushed for changes that would address concerns that insurers were abusing prior authorization, welcomed the proposals. But they stressed that the Biden administration’s health officials should commit to enforcing the stricter oversight.
“The agency really needs to keep its eye on the ball,” said Molly Smith, the vice president of the public policy group at the American Hospital Association, a trade organization.
The proposed regulations are not yet final. Health officials are asking the public for comment and may make changes.
