“Finally, Some Accountability for Medicare Advantage Ads”

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This was sent to me by Dale Coberly. I was wondering why Dale was sending me trash advertisements.

Skimmed it and then it dawned on me. Much of this advertising is made to sway people’s minds to do something. It is the type of advertising I sometimes wish to throw a shoe at the 65-inch screen when it should be shown on a 12 -inch screen.

It is especially aggravating, when the advertising includes the famous, the rich, the good-looking, etc. This is one example of a pitch using an aging athlete. If Joe, etc., says this is good, it must be good. It is not! It also blurs the boundaries between Traditional Medicare and Commercial Medicare called Medicare Advantage. Much of this fluff about Medicare Advantage is made up as you will discover as you read the NCPSSM blog piece.

This commentary first appeared on the “National Committee to Preserve Social Security and Medicare” blog.

The makers of these misleading ads for Medicare Advantage (MA) star celebrities like Joe Namath, Jimmy Walker, and William Shatner pitch may finally be held to account.  The Centers for Medicare and Medicaid Services (CMS) has issued new rules clamping down on the ads after receiving a flood of consumer complaints.  As Mark Miller writes in yesterday’s Retirement Revised blog,

“Brokers will be subject to tougher disclose rules. Most significantly, Medicare will hold insurers responsible for what their marketing agents say in ads.”

The celebrity-driven ads blur the line between privately-run Medicare Advantage (Medicare Part C) and Traditional, Medicare, a publicly-administered Medicare program. Joe Namath and company make it sound as though “Medicare Part C” is the Medicare program.  It is definitely not. Viewers may never know there is a public option called “Traditional Medicare,” solely focused on patient care rather than private profit.  The ads also contain misleading invitations urging consumers to call the Medicare Advantage plan’s toll free-number and find out how to “add money back into your Social Security check.”

Earlier this week, the Wall Street Journal reported:

“The aggressive sales efforts by marketers are the result of billions invested by private-equity firms, financial-services companies and stock-market investors into virtual call centers, internet-based lead-origination firms and other marketing businesses over the past several years.” – Wall Street Journal, 8/31/22

The government’s new rules are aimed at marketers selling MA policies for insurance companies. Insurers will be held accountable for what marketers claim in the ads. The bottom line:  MA marketers “will need to disclose more to their customers,” according to the Journal.  The new rules are not aimed at the celebrities who appear in the ads, but William Shatner of Star Trek fame promised, 

“We’ll change things so it satisfies everybody and eliminates the confusion.”

Medicare Advantage plans have come under growing scrutiny for a number of questionable practices such as undermining patient care and overcharging taxpayers.  Last June, the Washington Post reported about a whistle-blower from a Medicare Advantage outfit in California who is working with federal investigators looking at alleged, widespread malfeasance on the part of MA plans. According to the Post:

“The Justice Department is pursuing civil lawsuits against multiple companies that participate in the privatized system, from huge insurers to prestigious nonprofit hospital systems, alleging they have cheated the system for unfair profit.” – Washington Post, 6/5/22

Investigators are probing allegations about some MA plans billing the Medicare program for patient care. Overbilling based on “outdated or irrelevant” diagnoses, in order to increase profits.  The diagnoses include conditions like heart disease, depression, obesity, and cancer. Conditions patients had already surmounted or never had in the first place. In addition to overcharging the government for care for these patients, critics claim MA plans billing for outdated or false diagnoses could stigmatize patients “who were improperly deemed obese, malnourished or mentally ill.”

“The point of larding the medical records with outdated and irrelevant diagnoses such as cancer and stroke — often without the knowledge of the patients themselves — was not providing better care, according to a lawsuit from the Justice Department; (it was to make higher profits).” – Washington Post, 6/5/22

Some Medicare Advantage plans have long been accused of “upcoding,” which means “submitting bills for more severe and expensive diagnoses or procedures than (were) diagnosed or performed,” according to the National Center for Biotechnology Information. Plain and simple, this is a form of fraud. The victim is the Medicare program — and the workers, taxpayers, and enrollees who fund it.

The irony is Medicare Advantage plans, which began during the George W. Bush administration, were supposed to save the Medicare program money.  Instead, these privately-run, for-profit plans are “costing taxpayers more money to run than traditional fee-for-service Medicare,” notes the Washington Post.  

(AB) If Medicare Advantage can not compete with fee for service traditional, MA will experience difficulties competing against Single Payer.

According to the government watchdog MedPAC, the federal government incurred $12 billion in “excess payments” to Medicare Advantage plans in 2020.  MedPAC projects the figure will swell to $16 billion next year.

Meanwhile, the HHS Inspector General’s office issued a report in April, showing how some MA plans are denying “medically necessary” claims and pre-authorizations that should be covered under Medicare rules. Again, the motive seems to be squeezing more money out of the federal government at the expense of patient care.

“The Inspector General’s report explains that because the Centers for Medicare and Medicaid Services (CMS) pays Medicare Advantage plans a flat fee regardless of the amount they spend on care, they have a ‘potential incentive … to deny beneficiary access to services and deny payments to providers in an attempt to increase profits.’” – Common Dreams, 6/8/22

Despite the mounting evidence of wrongdoing on the part of some MA plans, Medicare Advantage continues to grow in popularity. MA is on the brink of capturing more than half of the Medicare market. Up till now the market has been dominated by traditional Medicare. This is the result of the torrent of television ads featuring celebrity pitchmen promising lower premiums and free benefits like gym memberships and rides to the doctor’s office.

The ads fail to mention MA plans:

• Offer limited networks of providers, or

• Medically necessary claims and pre-approvals may be denied so the plans can make more money.

Neither Joe Namath or Jimmy Walker tell viewers about plans over-billing for false or outdated diagnoses. This occurs unbeknownst to patients.

Instead of being held accountable, Medicare Advantage plans are being rewarded with an 8.5% revenue increase for 2023. Since privatized Medicare Advantage plans were created, for-profit companies have been gaining influence in the care of the elderly. It is welcome news, the Justice Department and HHS Inspector General’s office are intensifying their scrutiny of Medicare Advantage.  At stake is nothing less than billions in taxpayer dollars and the wellbeing of millions of America’s seniors.