Spitzer Warns Consumers About "hmo Slamming"
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Attorney General Spitzer today warned consumers about "HMO slamming," a practice whereby senior citizens and others are enrolled in health plans without their full knowledge or consent.
Spitzer also announced an agreement with a major health plan to reform its enrollment practices. He said the agreement should be a model for HMOs across the nation.
"This agreement protects seniors from being duped into joining a Medicare HMO that they do not want and that will not meet their health care needs," Spitzer said. "Full disclosure, honest dealing and informed consent must be the cornerstones of a fair Medicare HMO marketplace and this agreement will help promote such practices."
Spitzer said that under the agreement, HealthFirst 65 Plus, a Manhattan-based Medicare HMO, has adopted procedures that will ensure that seniors who enroll in the health plan will fully understand the limitations and the benefits of Medicare HMOs.
The agreement was praised by leading consumer advocates, who have long complained about the practice dubbed "Medicare HMO slamming."
Robert M. Hayes, President of the Medicare Rights Center, said: "We are very pleased about the Attorney General's action. Many seniors have been confused by Medicare HMO sales pitches and sign forms they don't understand in the stress of the moment. The form required by this agreement will be an important safeguard to help ensure that seniors are enrolling in HealthFirst with their eyes wide open. We would like to see it adopted nationally by all Medicare HMOs as a standard consumer protection device. "
Under the agreement with the Attorney General, HealthFirst 65 Plus sales representatives to will be required to complete, an "application confirmation form" that will be signed by potential enrollees to document that the potential new member understands the following:
- The consumer is enrolling in a Medicare HMO, and will not be covered by traditional Medicare;
- The consumer must use doctors and other providers in the HealthFirst 65 Plus network in order to get coverage for care; and,
- If a consumer's current physician is not a member of HealthFirst 65 Plus network, the patient must select a new doctor in the network in order to have coverage for care.
- The agreement also requires HealthFirst 65 Plus to:
- Verify enrollment by telephone and in writing, using a new, improved telephone counseling script and notice form;
- Require sales representatives to forfeit commissions if HealthFirst cannot verify enrollment within 90 days of when coverage begins;
- Establish a Special Investigations Unit to respond to complaints about inappropriate enrollment;
- Assist those members who were enrolled inappropriately to return to traditional Medicare, paying for any denied claims, as necessary;
- Comply with all federal requirements for training and supervision of sales staff and to advise sales staff of the company's "zero tolerance" policy for any form of fraud or abuse.
The agreement also requires the company to conduct a full investigation regarding any future inappropriate enrollment practices and to implement training procedures to ensure that consumers are fully informed about the services offered.
The case arose from complaints received by the Attorney General's Health Care Bureau alleging that seniors with Medicare were being enrolled in HealthFirst 65 Plus without their knowledge or consent.
One consumer said that a HealthFirst 65 Plus sales representative told her to sign an enrollment form because it was required by her supervisor to show that the sales representative had spoken to her quota of people for the day. Other complainants alleged that they were induced to sign the enrollment forms under the pretext that they were signing up for free Medigap coverage. There were also complaints from consumers who were allegedly told that they were signing up solely for a prescription drug plan.
The Attorney General commended HealthFirst for being responsive and proactive in attempting to improve compliance with federal and state laws protecting seniors against unauthorized enrollment in a Medicare HMO plant.
Spitzer's office has prepared a tip sheet to help consumers learn more about enrolling in Medicare HMOs. It is available at www.ag.ny.gov. In addition consumers may contact the Health Care Bureau's toll-free hotline at (800) 771-7755 (option #3 on the automated voice menu).
This case was handled by Assistant Attorneys General Heather Hussar and Troy Oechsner.