Investigating Health Net Over Alleged Medicare Advantage Marketing Infractions

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House Energy and Commerce Committee Chair John Dingell (D-Mich.) and Energy and Commerce Oversight and Investigations Subcommittee Chair Bart Stupak (D-Mich.) have requested that CMS investigate potential Medicare Advantage marketing infractions by California-based Health Net, CQ HealthBeat reports. CMS in September announced new marketing regulations for insurers that sell plans under Medicare Advantage that prohibit cold calls, door-to-door sales and additional unsolicited and direct contact by sales agents -- unless such contact is requested by the beneficiary -- and limit commissions for sales agents.

Dingell and Stupak in a statement said that their committee is reviewing a report by the National Senior Citizens Law Center that found Health Net sales agents sent illegal electronic telemarketing messages and provided false and misleading information to beneficiaries in order to induce enrollment in MA plans. According to Energy and Commerce Committee spokesperson Jodi Seth, Health Net sales agents may have circumvented the rules by enticing beneficiaries to ask about MA plans during general discussions about supplement plans.

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Dingell and Stupak requested the investigation in a letter sent last week to HHS Secretary Mike Leavitt and Inspector General Daniel Levinson. The letter also asked CMS to require Health Net to suspend its marketing activities and impose monetary sanctions while considering whether to bar the company from participating in MA.

In a separate letter to Health Net President and CEO Jay Gellert, Dingell and Stupak asked that the company "immediately notify all insurance brokerages and agents selling its Medicare private plans to cease outbound sales calls and unsolicited sales contacts, identify any agents that have violated these prohibitions and refer such agents to the appropriate State Insurance Department and the HHS (inspector general)." Health Net spokesperson Amy Sheyer said the company launched an "exhaustive review of the issues" after receiving the letter (Vadala, CQ HealthBeat, 10/20).

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/email . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2007 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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