The insurance agent fielded questions from a prospective customer for about 20 minutes before he sensed the man knew a little too much about the managed care plans he was being asked to buy.
"You're a shopper, aren't you?" the agent finally said.
Kerry Weems was busted.
Weems acknowledged that he wasn't just a shopper. He's actually the acting chief of the entire Medicare program. To get a better feel for the marketing practices of private insurers, Weems ordered senior staff at the Centers for Medicare and Medicaid Services to surreptitiously attend agents' presentations to seniors and the disabled. They call it the "secret shopper program."
Weems has been to three, including one last week at a Virginia diner.
It's the more comprehensive coverage, called Medicare Advantage, that has raised concerns about seniors being misled. State insurance commissioners have complained that some agents signed people up for plans that didn't meet their health needs. For example, the plan might not cover a drug the customer takes, or may require the patient to switch doctors. But the customers might not find that out until they show up at the pharmacy counter or at their doctor's office.
Medicare began using a private contractor earlier this year to audit the agents' presentations. After each presentation, they submit a report that grades the accuracy of the agent's statements. Weems ordered CMS staff to get out and see for themselves whether agents are misleading Medicare beneficiaries. So far this year, secret shoppers have attended 119 separate presentations from 56 participating insurers.
In blue jeans and a flannel shirt, Weems was the only potential "customer" who showed for last week's presentation. He told the agent he was inquiring on behalf of his mother. He asked questions about whether the agent was licensed, whether he received a commission for a sale, and which particular charges his mother would be liable for if she enrolled. A reporter observed from nearby.
"He was compliant with our policies. When he would get a little fuzzy, and I came back with a question, he would answer it correctly," Weems said.
But earlier this year, Weems listened as a different agent gave beneficiaries in Illinois false information about how that particular plan worked. Under the plan discussed at that particular presentation, a physician must accept the terms and conditions of the plan before the insurer will cover the cost of care.
At first, the agent told attendees they could go to any doctor. The insurance plan would cover their care. When pressed, the agent then said the beneficiary could go to any doctor that accepts Medicare. In neither case was the agent being truthful. It's an important distinction for seniors because the vast majority want to continue to see their current doctor.
"We found that particular company was way out of compliance," Weems said "We sanctioned the company and asked them to stop marketing and retrain their agents," said Weems, who declined to identify the company.
8 million signed up for private Medicare Advantage
Earlier this year, Congress held hearings about misleading sales tactics in the Medicare program. Most seniors get coverage through traditional Medicare, but more than 8 million have signed up for private Medicare Advantage plans. While most participants in the Medicare Advantage plans are happy with the extra benefits they get, the hearings also shed light on marketing abuses. For example, many seniors were under the impression that they were signing up for basic drug coverage, only to learn that they had been enrolled in the more comprehensive program, witnesses said. The agents routinely get a larger commission when they enlist consumers in the latter option.
Under pressure from advocacy groups and Congress, Medicare officials made several changes. Insurers must telephone beneficiaries who have enrolled in certain plans to confirm the customer understands the product. The agents also have to pass a written exam demonstrating an understanding of Medicare policies. Also, insurers have to list sales events so that Medicare officials can attend, which is how Weems knew of last Wednesday's presentation.
Weems said the secret shopper program indicates to him that the number of problems and their scope has lessened in recent months.
"We've seen great improvement from what we saw last year," Weems said.
He also said it's clear that insurance agents are learning that Medicare is keeping closer tabs on them through the secret shopper program.
"It's a serious effort," Weems said. "It's not a game of gotcha, and it's not a publicity stunt."