CMS algorithms unfairly target agents, HAFA CEO says

By Susan Rupe

The Centers for Medicare and Medicaid Services is using algorithms that “seem to go after good agents who are minority agents and, therefore their minority communities,” the CEO of a health insurance agents association told a National Association of Insurance Commissioners working group.

Ronnell Nolan, president and CEO of Health Agents for America, told the NAIC Improper Marketing of Health Insurance (D) Working Group how flaws in CMS’ algorithms and online enrollment platforms have contributed to fraud and unfairly targeted agents.

In March, the working group aired its concerns about consumers who say their ACA plans were switched without their consent.

HAFA warned that CMS enabled enhanced direct enrollment platforms to operate with applicants for Affordable Care Act coverage to provide only name, date of birth and state. These minimal information requirements created a vulnerability that could be addressed to prevent fraud but has not been addressed, Nolan said.

“Plus, the current administration allowed anyone at 150% of federal poverty level to change plans during the year. It allowed fraudulent entities to come in, go into that EDE spot and make changes and most consumers did not know until they got to the doctor that their plan had been changed.”

Nolan contended that implementing a two-factor authentication process on the platform “would have fixed it right there and stopped all the fraud that’s been happening.”

Because CMS did not adopt two-factor authentication was not adopted, the agent force is facing challenges, she said.

Nolan said CMS is using algorithms that contain flaws, disproportionately targeting minority agents and the communities they serve. Agents are being targeted by CMS, deemed guilty without being afforded due process or a formal appeal procedure. This is resulting in the immediate loss of their ability to sell, access their client base and maintain their income – all without substantiated proof of fraudulent activity.

“CMS is targeting good agents – not bad agents,” she said. “We want the good entities to stay and the bad entities to go away. We can no longer stand by and watch agents be taken down one by one.”

CMS says switching complaints on the decrease

Meanwhile, CMS has received fewer complaints about unauthorized plan switches over the past several months, Gina Zdanowicz, CMS deputy director, marketplace plan management group, told the NAIC panel.

CMS has implemented three changes to combat plan switching, she said. The first change is to block the activity of an agent who has not previously worked with a consumer. CMS also is blocking the most common instances of duplicate applications. A requirement to include a validated Social Security number when applying for coverage also was implemented.

“Looking ahead, we will continue to monitor misleading marketing,” she said. “While we don’t have authority over lead generators or marketing firms, we continue to work with the Federal Trade Commission on this issue.”

Zdanowicz said CMS has suspended the ACA marketplace agreements of more than 800 agents and brokers. The agency is reviewing rebuttals and reconsiderations from those agents.

Dealing with misleading Medicare Advantage marketing

CMS also has been dealing with misleading marketing of Medicare Advantage plans and Molly Turco of CMS gave the NAIC group an update on those efforts.

“We were especially concerned about the proliferation of certain TV ads” that contain misleading claims about Medicare Advantage benefits, she said.

CMS has prohibited ads that do not mention a specific plan name, and ads “that use words and imagery that may confuse beneficiaries and lead them to think that the ads are coming from the federal government,” Turco said.

The agency also implemented rules such as “cooling off periods” after conducting outreach to Medicare beneficiaries.

Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].