CMS Took Compliance and Enforcement Actions against at Least 73 MA Organizations for Inappropriate Marketing

From January 2006 through February 2009 CMS took a range of  compliance and enforcement actions against at least 73 MA organizations  for inappropriate marketing. While the number of MA organizations varied  during the approximately 3-year period, 192 MA organizations offered MA  plans as of March 2009. II for more information about the types of  inappropriate marketing that resulted in initial notices of noncompliance  and warning letters.) Nineteen of the 73 MA organizations subject to compliance or  enforcement actions had multiple types of actions taken against them. 1.) Some beneficiaries experienced financial liability  or access-to-care problems as a result of being enrolled in an MA plan or  stemming from their disenrollment and enrollment in prior or different  coverage. CMS Uses Special Election Periods to Help Beneficiaries Who Experienced Inappropriate Marketing

CMS assisted MA beneficiaries who experienced inappropriate marketing  by MA organizations by providing special election periods (SEP), which  enable beneficiaries to disenroll from their MA plan outside of the regular  enrollment periods and to enroll in prior coverage or another option, such  as another MA plan, Medicare FFS, or a stand-alone Medicare prescription  drug plan. Beneficiaries who stated they experienced inappropriate marketing may  also have experienced problems that the SEP could not address. For  example, these beneficiaries could have experienced financial or access- to-care issues prior to receiving the SEP. CMS, DOI, and SHIP officials  described cases in which beneficiaries did not realize they had been  switched to an MA plan until they tried to access services. These officials  said some of the beneficiaries experienced disruption of their access to  providers and medications because their providers did not participate in  the MA plan. First, some  beneficiaries who experienced inappropriate marketing may have  exercised their option—available during certain times of the year—to  disenroll from their MA plan and might not have notified CMS of the  marketing problems they encountered. Second, CMS did not directly track  the number of beneficiaries who contacted the agency and were provided  a SEP. CMS did estimate the number of SEPs it provided for inappropriate  marketing, but its estimates were based on data that were unreliable. CMS had the information to determine the number of  beneficiaries who disenrolled during these regular enrollment periods, but  during the time of our study, the agency did not collect information that  would have allowed it to determine the extent to which beneficiaries  disenrolled from health plans as a result of inappropriate marketing. CMS officials said that they plan to reinstitute a survey on disenrollment  reasons in late summer 2010. Currently, CMS has  limited information on the extent of inappropriate marketing and the  number of beneficiaries affected. The agency intends to conduct a survey  of beneficiaries who disenrolled from MA plans and ask about their  reasons for disenrollment. Methodology by Objective

To determine the extent to which CMS has taken compliance and  enforcement actions against Medicare Advantage (MA) organizations for  inappropriate marketing, we analyzed CMS data on the number and types  of corrective and enforcement actions taken against MA organizations for  inappropriate marketing. To determine how CMS helped MA beneficiaries affected by inappropriate  marketing and the types of problems beneficiaries encountered, we  reviewed relevant agency documentation for the period January 2006  through February 2009 and interviewed officials at CMS’s central office  and all 10 regional offices, 6 state departments of insurance (DOI), and 6  state health insurance assistance programs (SHIP).
Why GAO Did This Study

Members of Congress and state agencies have raised questions about complaints that some Medicare Advantage (MA) organizations and their agents inappropriately marketed their health plans to Medicare beneficiaries. Inappropriate marketing may include activities such as providing inaccurate information about covered benefits and conducting prohibited marketing practices. The Centers for Medicare & Medicaid Services (CMS) is responsible for oversight of MA organizations and their plans. The Government Accountability Office (GAO) was asked to examine (1) the extent to which CMS has taken compliance and enforcement actions, (2) how CMS has helped beneficiaries affected by inappropriate marketing and the problems beneficiaries have encountered, and (3) information CMS has about the extent of inappropriate marketing. To do this work, GAO reviewed relevant laws and policies; analyzed Medicare data on beneficiary complaints, compliance actions and enforcement actions; and interviewed officials from CMS and selected state departments of insurance, state health insurance assistance programs, and MA organizations.

What GAO Found

CMS took compliance and enforcement actions for inappropriate marketing against at least 73 organizations that sponsored MA plans from January 2006 through February 2009. While the number of MA organizations varied during that time period, 192 MA organizations offered MA plans as of March 2009. Actions taken ranged from initial notices of noncompliance and warning letters to more punitive measures, such as civil money penalties and suspensions of marketing and enrollment. Nineteen of the 73 MA organizations had multiple types of actions taken against them. CMS helped beneficiaries who experienced inappropriate marketing by providing special election periods (SEP) through which beneficiaries could disenroll from their MA plan and enroll in new coverage without waiting for the twice yearly regular enrollment periods. However, some beneficiaries experienced financial or access-to-care problems as a result of inappropriate marketing that could not be addressed by a SEP. Financial hardships occurred, for example, when beneficiaries disenrolled from their MA plans and the withholding of premiums from Social Security for their former MA plan was not stopped promptly. In other cases, beneficiaries did not realize they had been enrolled in an MA plan until they tried to access services. Some of these beneficiaries experienced disruption of their access to providers and medications because their providers did not participate in the MA plan. CMS has limited information about the number of beneficiaries who experienced inappropriate marketing. Some beneficiaries who experienced inappropriate marketing may have exercised their option to disenroll from their MA plans during regular enrollment periods and might not have notified CMS of the marketing problems they encountered. For example, about 21 percent of beneficiaries disenrolled during the regular enrollment periods in 2007 from one type of MA plan that CMS officials acknowledged had a high incidence of inappropriate marketing. However, CMS discontinued a survey after 2005 that collected information on reasons for disenrollment and could have provided important information about the extent to which the disenrollments were the result of inappropriate marketing. CMS officials said that they plan to reinstitute a survey on disenrollment reasons in late summer 2010. CMS also has limited information about the number of beneficiaries who experienced inappropriate marketing because it did not directly track the number of SEP disenrollments. CMS did estimate the number of SEPs it provided for inappropriate marketing, but its estimates were based on data that were unreliable.