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."
The suspension order said that "despite representations to the contrary, Mr. and Mrs. Pinedo's physicians were not in the Amber II network of contracted providers, nor covered under the Amber II plan," which they didn't find out about until three months after they enrolled.
That's when they began receiving invoices totaling $4,500 for medical services.
State officials are not sure whether the Pinedo couple's physicians were paid, or whether they are having to write off the loss.
Contacted Wednesday at his Marina del Rey home, Chesler says the order is "not final. It's an allegation. I'm not about to explain it to you."
In the suspension order, state officials described misrepresentations by Chesler to three other elderly individuals, who were persuaded to switch Medicare Advantage plans.
One of them is Frank Genta, 87, who was enrolled in a SCAN Medicare Advantage plan that provided daily home care, a benefit that "was extremely important to Mr. Genta because he requires assistance with his daily living activities," according to the state.
But Chesler reportedly told Genta that SCAN was going to eliminate that benefit, and persuaded him to join Healthy Heart II, another plan, that does not offer the benefit. Genta agreed, but later changed his mind, according to the suspension order.
Chesler said he would cancel the man's enrollment, but he did not, according to the state.
"I took Mr. Genta approximately one month to have his Healthy Heart II enrollment cancelled and to get reinstated with SCAN. For the entire month, Mr. Genta was extremely stressed and worried that he would not be able to get his SCAN membership reinstated and that he would lose his home care," said the state officials.
The DMHC is the only stand-alone HMO watchdog agency in the nation, and has jurisdiction over plans that enroll 21 million Californians. Previously, the agency has taken action against fraudulent discount health plans that aren't officially considered plans and don't really include discounts.
Last year, the DMHC shut down a phony labor union health coverage scheme that put hundreds of consumers at risk of losing coverage, the agency said in a statement.