State Suspends Medicare Advantage Salesman for Fraudulent Tactics

Cheryl Clark, March 18, 2010

A Southern California health plan sales agent used "deceptive, misleading, aggressive, and abusive sales tactics" to persuade elderly individuals into switching their Medicare Advantage plan by telling them falsely that the plan he was selling would let them see their physicians, California officials said Wednesday.

Officials for the state Department of Managed Health Care said in a March 4 suspension order released Wednesday that the agent, Stuart Chesler of Marina del Rey, could not sell Medicare Advantage plans for one year because of misrepresentations he made to five elderly individuals.

DMHC staff counsel Erin Weber and enforcement chief Amy Dobberton say that the problem of deceptive marketing by health plan solicitors is growing, but this is the state's first suspension based on this type of fraud. Several other deceptive marketing practices by Medicare Advantage plan sales representatives are under investigation as well, they said.

"State law allows the DMHC to protect consumers from Medicare marketing fraud and allows for sanctions if it is determined that a solicitor makes misrepresentations to enrollees or acts in a manner that may expose enrollees to substantial risk," the state agency said in a statement.

In one example, according to the suspension order, Maria Pinedo, 89, and her husband, Jesus, 92, received health benefits through a Secure Horizons Medicare Advantage plan. Maria Pinedo was treated by UCLA physician Jeffrey Goldsmith, MD, while her husband received care from Natyla Sumina, MD, for at least two years, and James Orecklin, MD. Both also received care from Paul Tsou, MD.

But in June 2008, according to the state's suspension order, Chesler called the Pinedos and "misrepresented to Mrs. Pinedo that he was from MediCal [Medicaid in California] and told her that because she was eligible for MediCal, she needed to sign up for a Health Net Medicare Advantage plan."

The couple agreed to discuss it, and during the meeting with Chesler in their home, they made it clear they wanted to continue being cared for by their current doctors, the suspension order said. "Mr. Chesler expressly told them that all of their doctors were covered under the [Health Net] Amber II plan. Based upon these representations, Mr. and Mrs. Pinedo enrolled in Amber II."

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