Introduction

It has been well documented that the Medicare Prescription Drug, Improvement & Modernization Act of 2003 provided substantial subsidies to private companies that offer Medicare plans.  Because Congress decided to pay Medicare Advantage (MA) plans more, on average, than is paid under traditional Medicare, the number of MA plans available to Medicare beneficiaries has increased significantly.  Along with the growth in numbers of these plans has come enrollment confusion, and, worse, countless reports of abuses concerning the marketing and sales of MA plans by plan sponsors and their contracting agents.  CMS has taken some steps to address the marketing and sales concerns, as evidenced in their 2008 Call Letter to plan sponsors which encourages oversight and training for all marketing activities.  However, more action is needed to address the myriad of problems faced by the victims of these flagrant marketing and sales tactics.

Marketing and Sales Abuses

Some of the reported marketing violations include MA representatives who use misleading information or questionable sales tactics to encourage Medicare beneficiaries to sign up for MA plans.  For example, marketing agents have told Medicare beneficiaries that there is no premium for a plan, when in fact there is a substantial monthly premium.  Some agents have misrepresented the terms and conditions of the MA plan promising that certain physicians participate with the plan when in fact they do not.  MA representatives have also enrolled individuals who have serious language barriers or cognitive impairments.  Some individuals enroll in an MA plan without understanding that they have switched out of traditional Medicare and into an MA plan.  Others knowingly sign up for an MA plan but are not given enough information by the MA plan representative at the time to fully understand the consequences of their enrollment. 

Disenrolling From an MA Plan

Regardless of how an individual ends up in an MA plan, many enrollees soon realize that they have been enrolled in an MA plan and that enrollment in an MA plan is not in their best interests.  An individual may first learn of their enrollment in an MA plan when a provider refuses to see them because the provider does not accept the terms and conditions of the MA plan.  In other cases an individual may receive bills because they obtained medical care from providers who are out of the MA plan’s network.  Some individuals first learn that there is a significant monthly premium for the MA plan when they receive a statement from the Social Security Administration office.  It would be appropriate in these circumstances for the individual to seek a disenrollment from the MA plan.

The Centers for Medicare & Medicaid Services (CMS) designated certain special election periods (SEPs) which allow an individual to discontinue the election of an MA plan and change to a different MA plan or to traditional Medicare.  Specifically, a SEP may be granted in a situation in which an MA plan substantially violates a material provision of its contract in relation to the individual, or an MA plan materially misrepresented the plan when marketing it.[1]    Where appropriate, there are corresponding Part D SEPs.  If the disenrollment request is granted, the “individual may elect another MA plan or Original Medicare during the last month of enrollment in the MA organization, for an effective date of the month after the month the new MA organization receives the completed enrollment election.”[2]    If an individual elects traditional Medicare during the last month of enrollment in the MA plan, the individual has an additional 90 days from the effective date of the disenrollment to elect another MA plan.[3] 

In some case-specific situations, CMS may process a retroactive disenrollment.  Retroactive means that the disenrollment is made effective as of the date of enrollment into the MA plan.  An individual who is retroactively disenrolled will be covered as if they had not left traditional Medicare.  An individual’s circumstances should be evaluated to determine whether a retroactive disenrollment is appropriate.  For example, an individual enrolled in a Health Maintenance Organization (HMO) typically must obtain all covered care through the HMO network of providers in order to receive coverage for the full cost of care.  An individual who is being billed for services obtained from a non-network provider while enrolled in an MA plan should seek a retroactive disenrollment so that the claim for services can be submitted to traditional Medicare.

CMS has provided guidance regarding when retroactive disenrollment is appropriate.  Retroactive disenrollment may be granted by CMS if an enrollment was never legally valid.[4]    An enrollment that is not complete is not legally valid.  CMS does not regard an enrollment as actually complete if the member did not intend to enroll in the MA plan.  Evidence of lack of intent to enroll may include an enrollment election signed by the individual when a legal representative should have signed for the individual, request by the individual for cancellation of enrollment before the effective date, enrolling in a supplemental insurance program immediately after enrolling in the MA plan, or receiving non-emergency or non-urgent services out-of-plan immediately after the effective date of coverage under the plan.[5]

Other bases for retroactive disenrollment include instances where a valid request for disenrollment was properly made, but not processed or acted upon.[6]    CMS may also grant a retroactive disenrollment if the reason for the disenrollment is related to a permanent move out of the plan service area or a contract violation as outlined in the Medicare regulations.[7]    An individual may demonstrate to CMS that a contract violation has occurred if the MA plan substantially violated a material provision of its contract in relation to the individual, including, but not limited to failure to provide the beneficiary, on a timely basis, medically necessary services for which benefits are available under the plan or failure to provide medical services in accordance with applicable quality standards.    A contract violation may also include an instance where the MA plan materially misrepresented the plan’s provisions in marketing the plan to the individual.[8]

Retroactive disenrollment requests should be submitted to the CMS Regional Office.  An individual submitting the request should set forth the relevant facts to demonstrate that the situation fits the CMS criteria for disenrollment.  CMS has the discretion to allow retroactive disenrollment, but it is by no means automatic. 

Additional Issues

Individuals who are successful in obtaining a disenrollment or retroactive disenrollment from an MA plan still face a host of other problems.  For example, an individual enrolled in an HMO who obtains medical care from non-network providers will have to contact each provider and ask that they bill traditional Medicare for the services they received while enrolled in the MA plan.  Another example involves Medigap issues.  Individuals who disenroll from an MA plan to traditional Medicare during an SEP are provided Medigap guaranteed issue rights.  However, an individual who dropped a Medigap plan when they enrolled in an MA plan may be able to get their Medigap plan back prospectively, but not retroactively.  Therefore, the individual will be responsible for any Medicare coinsurance or deductible that they incurred during the period of MA enrollment.  Finally, there is currently no official process for an appeal if CMS denies a request for retroactive disenrollment.

Conclusion

CMS has provided beneficiaries who are unfairly trapped in an MA plan, through no fault of their own, with an avenue to return to traditional Medicare.  Unfortunately, this avenue, which places the burden on beneficiaries to prove their entrapment, is difficult, if not impossible, for the Medicare beneficiary to navigate alone.  In addition, the process for disenrollment and retroactive disenrollment has not been well publicized so many people are left in an MA plan wondering what to do next.  Individuals who counsel Medicare beneficiaries should become familiar with the various problems and processes associated with disenrollment and retroactive disenrollment in order to provide appropriate assistance.