CMS urged to crack down on health insurance ‘twisting’

By Susan Rupe

The chairman of the Senate Finance Committee called on the Biden administration to stop allowing unscrupulous brokers to switch consumer’s health insurance plans without their consent and knowledge. He also called for the government to impose criminal penalties on those who switch policies fraudulently.

Known as “twisting,” the scheme often leaves consumers without access to their regulator doctors, while paying higher deductibles and tax penalties.

Sen. Ron Wyden, D-Ore., sent a letter to the Centers for Medicare and Medicaid Services in which he expressed “outrage” over the practice. He said twisting nets unscrupulous agents commission payments while leaving consumers with a potential list of problems. Wyden urged CMS administrator Chiquita Brooks-LaSure to act immediately to end the practice “by imposing civil monetary penalties and to take additional steps to protect consumers.”

CMS does not have the authority to hold brokers, agencies and lead generators criminally accountable for participating in fraudulent enrollment schemes. Wyden told CMS he plans to introduce legislation to give the agency that authority.

Reports of bad actor agents and deceptive marketing practices are not new, Wyden said. The Trump Administration’s focus on privatizing the Affordable Care Act marketplace introduced enhanced web-broker platforms allowing brokers to bypass the benefits and protections of the ACA marketplace. The problem has become widespread and more sophisticated in the ACA marketplace as bad actors with access to a consumer’s eligibility information through web-broker platforms can make changes to health plans and agents of record changes while keeping people and their legitimate brokers in the dark.

CMS said it received 40,000 complaints of unauthorized health plan switches and 50,000 reports of unauthorized enrollments in the first three months of 2024.

But Wyden said, “CMS must do more and you must do it now.”

“CMS should get ahead of these issues, by proactively informing individuals who may have been impacted as soon as CMS is aware. Some people may not yet know that their plan has been changed without their permission. They should be advised to check their coverage immediately. In my view, any individuals who have been enrolled by a broker who has fraudulently enrolled other consumers or who has been suspended or terminated for fraudulent enrollment should be proactively notified by CMS that they, the consumer, is working with a suspicious broker.”
Wyden also called for CMS to conduct a thorough review of enhanced direct enrollment entities policies, their technology safeguards, and their business practices.

“The ability to directly enroll individuals into ACA coverage should be a privilege and companies that are not just meeting and exceeding CMS standards to protect consumer plan choices should have their contract terminated. Reports that brokers can change an individual's or family’s coverage without their knowledge is unacceptable. CMS needs to step up its oversight of these entities and ensure that their business practices incentivize brokers to help individuals find the plan that is the best fit for them.”

Agent associations urge action

The National Association of Benefits and Insurance Professionals has been working with the Department of Health and Human Services and the Center for Consumer Information and Insurance Oversight to end the practice of twisting, John Greene, NABIP senior vice president of government affairs, told InsuranceNewsNet.

“We are equally outraged at this,” Greene said. “Our members worked hard to enroll people in the right plans. This is affecting not only consumers but the people who are playing by the rules.” The problem of “twisting” appears to be especially prevalent during special enrollment periods, he said.

Greene called for a two-step authentication process to ensure that those who are enrolling in coverage and those who are enrolling them are who they say they are.
At Health Agents for America, president and CEO Ronnell Nolan said her association has implemented a fraud reporting tool on its website.

“In addition, I have met and am working with the Florida Fraud Department, Louisiana Fraud Department, CMS and our attorney, Diceros Law. We are determined to stop the bad actors who are hurting the American public,” she said.

“People’s plans are being changed without their consent, in which they are losing their coverage, not able to get cancer treatment, their name on transplant lists effected. This is a horrible situation happening in the United States.”

Florida lawsuit alleges twisting

Meanwhile, a lawsuit filed in April in federal court in Florida alleges an ACA plan twisting scheme targeted low-income consumers.

The suit alleges that large call centers were used to enroll people into ACA plans or switch their plans without their permission.

Plaintiffs in the case are Conswallo Turner, Tiesha Foreman, Angelina Wells, Veronica King and NavaQuote WINN Insurance agency. They allege fraudulent and misleading practices by insurance call centers enrolled people into ACA plans or switch their coverage constituted violations of the Racketeer Influenced and Corrupt Organizations Act, as well as negligence of federal web broker agreements.

Defendants in the case include Enhance Health, TrueCoverage, Speridian Technologies and Number One Prospecting doing business as Minerva Marketing.

The lawsuit alleges the call centers had access to policyholder accounts through “enhanced direct enrollment” platforms, including one called Benefitalign, owned by Speridian.
One of the plaintiffs, Turner, alleges she signed up for ACA coverage in December through an agent she knew, and expected it to go into effect on Jan. 1. Not long after, Turner saw an ad on Facebook promising a monthly cash card to help with household expenses.

She called the number on the ad and provided her name, date of birth, and state, the lawsuit says. Armed with that information, sales agents then changed her ACA coverage and the agent listed on it five times in just a few weeks, dropping coverage of her son along with way, all without her consent.

She ended up with a higher-deductible plan along with medical bills for her now-uninsured son, the lawsuit alleges. Her actual agent also lost the commission.
The suit alleges that the plaintiffs collected names of people responding to online and social media ads claiming to offer monthly subsidies to help with rent or groceries. Those calls were recorded, the suit alleges, and the callers’ information obtained by TrueCoverage and Enhance Health.

The effort targeted people with low enough incomes to qualify for large subsidies that fully offset the monthly cost of their premium, the lawsuit alleges. The push began after March 2022, when a special enrollment period for low-income people became available, opening up a year-round opportunity to enroll in an ACA plan.

Susan Rupe is managing editor 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]. Follow her on Twitter @INNsusan.