House Committee Investigates Medicare Fraud and Sales Abuse

Press Release

House Committee Investigates Medicare Fraud and Sales Abuse

The Energy and Commerce Subcommittee on Oversight and Investigations met today to examine reports of predatory sales practices targeting seniors in the Medicare Advantage programs. Congressman Tim Murphy (PA-18), a member of the Subcommittee, emphasized the need to protect seniors from such practices.

"While Medicare Advantage programs have offered many additional benefits, each senior must take the time to carefully review and choose the program that is right for them," Congressman Murphy said. "Unfortunately, there is evidence of some independent agents who provided misleading and deceiving information on what some of the plans offer. Some seniors later found that their new plan did not cover their prescription drugs or care."

Because seniors only have the option of changing their Medicare coverage plans during the "open season," which falls between November 15 and December 31 of each year, many private plans subcontract agents during that time to handle new enrollees. Some of these agents have used aggressive practices to convince seniors to change plans. Unfortunately, it has been difficult to track the number of seniors who have been taken advantage of by these practices.

"Most seniors are satisfied with Medicare Advantage plans. Currently there are about 8.3 million people enrolled" Congressman Murphy continued. "In order to stop predatory practices, everyone must be proactive. Seniors, if they choose to sign up for a plan, should first consult with their doctor, pharmacist, and family members to make sure their needs will be fully covered. Never sign any documents without first understanding the details of the program.

"Congress must be aggressive in ending fraud and predatory sales practices and punishing those who are preying on our nation's seniors. We must make sure there are no loopholes in the law that allow independent agents to prey on seniors and that all information must be presented in an honest and easily understandable way. This will allow seniors to compare products and select which one is best for them."

Any seniors who believe they may have been a victim of predatory sales within the Medicare Advantage program should contact Congressman Murphy's office at 412-344-5583. His staff can assist them in getting reinstated on the proper plan.

In April 2007, Mississippi Insurance Commissioner George Dale issued a warning to Medicare beneficiaries to beware of aggressive practices including the following:

1. The agent will claim to be from Medicare. In many instances, the agent will present a red, white, and blue card that looks like a Medicare recipient's card;

2. The agent will have the Medicare recipient fill out a "request for more information," form, when in fact the "request" form is actually an enrollment form for whatever Part C or D plan the agent is selling;

3. The agent will ask the Medicare recipient to sign a form "just to show [my] boss" the agent contacted the recipient;

4. The agent assures the Medicare recipient that enrollment will not affect his/her Medicare coverage. While this may be true of some portion of Medicare plans, it is not uniformly the case. Often the recipient discovers this fact when a healthcare provider informs them that Medicare has declined to pay a charge; and

5. The agent tells the Medicare recipient that enrollment in the plan he or she is selling will not cost anything; however, the recipient later learns that premiums will be collected from policyholders.

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