Evercare practices reviewed by state
7 agents fired over Medicare plan sales
The state Division of Insurance is investigating sales of Evercare private Medicare plans that have sparked complaints from Massachusetts seniors about sales representatives using misleading and abusive marketing.
In addition, the Centers for Medicare and Medicaid Services, the federal agency that oversees the insurance plans, said it has stepped up oversight of Evercare, a subsidiary of insurance giant UnitedHealth Group Inc. of Minnetonka, Minn.
Evercare has fired seven independent insurance agents as a result of the complaints and is investigating 15 others for potential marketing abuses, according to Medicare.
"We are going to scrutinize Evercare very, very closely for marketing abuses in the future," said Jack Cheevers, a spokesman for the federal agency, known as CMS. "This situation in Boston convinces us we need to put them under a microscope."
The Globe reported Saturday that Massachusetts seniors have filed dozens of complaints with the state and senior service agencies about how Evercare sold private health insurance for disabled seniors who qualify for both Medicare and Medicaid benefits. According to complaints filed with senior advocates, independent insurance agents lied about what was covered, called seniors after they were asked to stop, and may have gone door to door in violation of marketing guidelines.
CMS said Evercare had a history of sales and marketing problems in the southeastern United States in 2006. At that time, the agency worked with the company to implement better monitoring of agents' behavior. Last year, the federal agency "strongly urged" Evercare to start a program of follow-up calls to seniors who sign up for coverage. The agency approved the telephone script used in those calls.
In a statement yesterday, Evercare said it adopted the program, called Outbound Education and Verification, "as a best practice in our goal to ensure that every member is enrolled in the right health plan that best meets their needs."
Kevin Beagan, the state's deputy insurance commissioner for healthcare issues, said the Division of Insurance is working to identify and investigate agents that violated marketing laws and guidelines. The division held a teleconference with CMS Monday. The division registers insurance agents in Massachusetts and can revoke an agent's license.
"We are continuing to work with CMS and go deeper into the materials we have," said Beagan. "We'll follow up with the company so we can identify individual agents and find patterns of complaints."
Evercare said it certified 210 insurance agents to sell its Special Needs Medicare plan in Massachusetts.
Cindy Polich, chief compliance officer for Ovations, the United HealthCare business unit that includes Evercare, said, "We believe the vast majority of agents work in the best interests of the beneficiary. We have a comprehensive complaint handling program. If there are problems, we catch them swiftly, and if necessary terminate agents who are not meeting our standards."
Polich added, "We've been using a number of independent insurance agents across the country for some time and have had very few problems."
Kevin Prindiville, staff lawyer at the National Senior Citizens Law Center, said the Evercare marketing abuses are symptomatic of the government's shift, largely under the Bush administration, to promote private Medicare plans. Insurance companies get paid more to provide services through the plans, called Medicare Advantage. That has led to an explosion of competing plans, as well as plans targeted at specific senior populations, like the Evercare product.
"When you induce private plans to participate by overpaying them, it leads to a slew of bad consequences for consumers," said Prindiville. "People will continue to get put into products that aren't right for them as long as there's a financial incentive to do it."
The National Association of Insurance Commissioners, a professional group for state regulators, has been investigating problems associated with private Medicare plans. The group found that the government's high payments to insurance companies for private Medicare plans has created a situation ripe for marketing abuses.
"State insurance regulators and consumer groups believe that the level of compensation to plan sponsors provides an incentive to sell as many Medicare Advantage plans as they can resulting in some of the high-pressure and fraudulent marketing and sales practices being experienced in the marketplace," says the draft paper, posted earlier this month.
"Both CMS and the insurance industry strongly disagree with state regulators and consumer groups on their financial compensation concerns," the paper says. "Industry has stated that they do not believe that payments to plan sponsors drive marketing and sales abuses."
Jeffrey Krasner can be reached at krasner@globe.com.
