Department of Health and Human Services 
OFFICE OF 
INSPECTOR GENERAL 
MEDICARE MANAGED CARE 
1998 Marketing Materials 
JUNE GIBBS BROWN 
Inspector General 
FEBRUARY 2000 
OEI-03-98-00271  OFFICE OF INSPECTOR GENERAL 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, is to 
protect the integrity of the Department of Health and Human Services programs as well as the 
health and welfare of beneficiaries served by them.  This statutory mission is carried out through a 
nationwide program of audits, investigations, inspections, sanctions, and fraud alerts.  The 
Inspector General informs the Secretary of program and management problems and recommends 
legislative, regulatory, and operational approaches to correct them. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) is one of several components of the Office of 
Inspector General.  It conducts short-term management and program evaluations (called 
inspections) that focus on issues of concern to the Department, the Congress, and the public.  The 
inspection reports provide findings and recommendations on the efficiency, vulnerability, and 
effectiveness of departmental programs. 
OEI's Philadelphia Regional Office prepared this report under the direction of Robert A. Vito, 
Regional Inspector General, and Linda M. Ragone, Deputy Regional Inspector General.  Principal 
OEI staff included: 
REGION  HEADQUARTERS 
Isabelle Buonocore, Project Leader  Stuart Wright, Program Specialist 
Erika Q. Lang, Program Analyst  Tricia Davis, Program Specialist 
To obtain copies of this report, please call the Philadelphia Regional Office at (215) 861-4551. 
Reports are also available on the World Wide Web at our home page address: 
http://www.dhhs.gov/progorg/oei  E X E C U T I V E   S U M M A R Y  
PURPOSE 
To determine how well marketing materials met Federal guidelines in the first year after 
implementation of the Medicare Managed Care National Marketing Guide. 
BACKGROUND 
The Health Care Financing Administration (HCFA) has authority to establish how 
managed care health plans with Medicare contracts provide information to beneficiaries. 
The health plans are required to submit marketing materials to HCFA regional offices for 
review and approval before distribution.  Marketing materials include pre-enrollment 
materials (e.g., advertisements and sales brochures) and member materials (e.g., 
membership rules and notices of change in benefits).  The HCFA regional staff keep track 
of the marketing-material reviews. 
The Medicare Managed Care National Marketing Guide (hereinafter called National 
Marketing Guide) was issued in November 1997.  It serves as an operational tool for 
managed care plans and HCFA regional offices, and outlines what information is required 
or prohibited in marketing materials.  While some instructions in the National Marketing 
Guide are voluntary, others are mandatory.  The National Marketing Guides most 
important goal is to provide Medicare beneficiaries with current, accurate, consumer 
friendly, managed care marketing information that will assist them in making informed 
health-care choices. 
We reviewed 319 marketing pieces approved by HCFA during calendar year 1998 in order 
to determine how well marketing materials met Federal guidelines.  We also conducted a 
subjective review of whether the materials were consumer friendly. 
FINDINGS 
Few 1998 Approved Marketing Materials Were in Full Compliance with the 
National Marketing Guide 
Only 13 percent of HCFA-approved materials which we reviewed (41 of 319) met all 
requirements of the National Marketing Guide.  The 87 percent not in full compliance 
either (1) contained statements specifically prohibited, (2) had missing, incomplete, or 
inaccurate information, or (3) did not meet print-size requirements. 
1 
1998 Marketing Materials  OEI-03-98-00271  Nearly Half of Materials Reviewed Were Not Consumer Friendly 
Forty-six percent (145 of 312) of materials were confusing or contained jargon.  A 
comparison of pre-enrollment versus member materials revealed that, overall, member 
materials were less consumer friendly. 
RECOMMENDATIONS 
Our findings from this report and our companion report, Medicare Managed Care: Goals 
of National Marketing Guide (OEI-03-98-00270), wherein we surveyed users of the 
Medicare Managed Care National Marketing Guide and obtained HCFA tracking data on 
marketing-material reviews, provide evidence that the National Marketing Guide, while 
improving some aspects of the marketing-material review process, was not very successful 
at meeting its most important goal.  That goal is to provide Medicare beneficiaries with 
accurate and consumer friendly marketing materials.  Inaccurate and confusing materials 
may affect beneficiaries ability to make informed health-care choices. 
We recommend that HCFA: 
<	 update the National Marketing Guide.  The National Marketing Guide should further 
clarify which information is specifically prohibited or required in marketing materials. 
The National Marketing Guide should provide model materials that are accurate and 
easy to read.  It should clarify policy and operational instructions regarding the lead and 
local regional office responsibilities, the Use and File System (which allows plans to 
distribute sales material without prior approval), and the health plans use of checklists 
for member materials.  It should also ensure that checklists for member materials contain 
all the required information. 
<	 standardize and mandate use of member materials.  The HCFA should work toward 
standardizing as many types of member materials as possible.  Managed care plans 
should be required to use these materials when communicating with their enrolled 
Medicare beneficiaries. 
<	 develop standard review instruments.  These review instruments should be used by 
HCFA staff in determining if marketing materials (both pre-enrollment and member) 
contain all required information and do not contain prohibited information. 
<	 establish a quality control system.  The HCFA should periodically review a nationwide 
sample of previously approved marketing materials (both pre-enrollment and member) to 
determine if they meet Federal marketing guidelines. 
2 
1998 Marketing Materials  OEI-03-98-00271  < track marketing-material reviews consistently and uniformly across all regions. 
<	 conduct meetings to review Federal marketing requirements with managed care 
plans that continually submit materials not in compliance with the requirements. 
<	 provide training on the use of the National Marketing Guide for HCFA reviewers 
and managed care plans. 
AGENCY COMMENTS 
The Health Care Financing Administration (HCFA) reviewed our companion reports and 
concurred with our recommendations.  The agency is updating the National Marketing 
Guide and plans to promote better understanding of the Use and File System.  As of 2000, 
contracting health plans must use a standardized Summary of Benefits.  In the future, 
beneficiary notifications such as the Evidence of Coverage will be standardized, and their 
mandatory use will be phased in.  In 2001, the agency will have a new and comprehensive 
instrument for collecting benefit data and reviewing marketing materials.  In addition, the 
Product Consistency Team will meet monthly and uncover and correct inconsistencies in 
operational or policy interpretations of standardized materials.  As to quality control, the 
agency will verify that all final versions of beneficiary notices are the same as versions 
HCFA approved, and will review samples of printed marketing materials.  The HCFA is 
also taking steps to address the tracking of marketing material reviews, monitoring of 
contractor performance, and training of staff.  Appendix C contains the full comments. 
We appreciate the comprehensiveness of HCFAs comments.  We believe the agencys 
stated efforts can result in comparable and understandable materials which beneficiaries 
need to make informed health-care choices.  We are hopeful that the updated National 
Marketing Guide will include clarification of lead and local regional office responsibilities, 
and clarification as to whether health plans must submit checklists along with the member 
materials they submit for HCFAs review.  With regard to the Product Consistency Team, 
the past team was not fully able to realize the objectives stated in the agency comments 
(uncovering and correcting inconsistencies; updating the National Marketing Guide as 
needed).  We are hopeful that the new team has the tools and authority needed to 
accomplish these important objectives. 
3 
1998 Marketing Materials  OEI-03-98-00271  T A B L E   O F   C O N T E N T S  
EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

INTRODUCTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

FINDINGS

Few marketing materials in full compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  9

Nearly half of materials not consumer friendly  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

RECOMMENDATIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13

APPENDICES

A: National Marketing Guides Language Chart in 1998  . . . . . . . . . . . . . . . . . . . . . . . 16

B: OIGs Methods for Reviewing Marketing Materials . . . . . . . . . . . . . . . . . . . . . . . . .  22

C: Comments from the Health Care Financing Administration  . . . . . . . . . . . . . . . . . . .  25

4 
1998 Marketing Materials  OEI-03-98-00271  I N T R O D U C T I O N  
PURPOSE 
To determine how well marketing materials met Federal guidelines in the first year after 
implementation of the Medicare Managed Care National Marketing Guide. 
BACKGROUND 
Marketing Regulations 
Title XVIII of the Social Security Act (Part D, Section 1876[c][3][C]) provided the 
Health Care Financing Administration (HCFA) authority to establish how managed care 
health plans with Medicare contracts provide information to Medicare beneficiaries. 
Regulations which list prohibited marketing activities are in Title 42 of the Code of 
Federal Regulations (Section 422.80).  Prohibited are activities that (1) discriminate 
against beneficiaries with poor health, (2) mislead or confuse beneficiaries, or (3) 
misrepresent the health plan or HCFA.  These same regulations also require managed care 
plans to submit all marketing materials to HCFA for review and approval at least 45 days 
before their planned distribution. 
Marketing Materials 
Marketing materials include a wide range of materials used to communicate with 
beneficiaries before and after enrollment in a managed care plan.  Pre-enrollment materials 
are essentially sales materials and include newspaper, radio, and television advertisements; 
summaries of benefits; application forms; telemarketing scripts; and slide presentations. 
Post-enrollment materials, more commonly called member materials, include letters 
confirming enrollment or disenrollment; notices about a change in providers, benefits, or 
premiums; letters with claim information; lists of covered and non-covered services; co
payment schedules; and subscriber agreements.  Subscriber agreements contain member 
rights as well as member and plan responsibilities.  Some subscriber agreements also list 
covered and non-covered services. 
Medicare beneficiaries are exposed to marketing materials through different media, 
including literature, billboards, radio, television, informational meetings, and the Internet. 
Regardless of the medium used, plans must get approval from HCFA prior to distributing 
the information. 
5 
1998 Marketing Materials  OEI-03-98-00271  Marketing Guidelines 
The Medicare Managed Care National Marketing Guide, hereinafter called the National 
Marketing Guide, became effective November 17, 1997.  It supplemented the marketing 
chapter in the Health Maintenance Organization/Competitive Medical Plan Manual, 
issued March 1991.  One of the goals of the National Marketing Guide is to provide 
Medicare beneficiaries with current, accurate, consumer friendly, managed care marketing 
information that will assist them in making informed health-care choices. 
The National Marketing Guide is an operational tool for managed care plan staff and 
HCFA reviewers.  It incorporates Federal requirements, represents HCFAs official 
position on marketing policy, and contains operational instructions.  It explains 
requirements for different types of materials and media.  Some instructions in the National 
Marketing Guide are voluntary, and others are mandatory.  For example, a chart in the 
National Marketing Guide describes marketing language that managed care plans Must 
Use/Cant Use/Can Use in sales materials.  (Appendix A contains the entire chart as it 
appeared in 1998.)  The National Marketing Guide also contains model member materials, 
which plans can choose to use or not use.  However, when plans create their own version 
of a model piece, they must submit the piece for HCFAs review along with a HCFA 
checklist showing that required information is in the piece.  The HCFA checklists are 
included in the National Marketing Guide. The HCFA policy is that certain information 
must be conveyed to Medicare beneficiaries.  However, format and the addition of other 
information are left to the discretion of the health plans. 
The National Marketing Guide was in the process of being updated when we wrote this 
report.  The update will include changes to reflect the Medicare + Choice program, which 
went into effect January 1999.  The Medicare + Choice program gives Medicare 
beneficiaries additional health plan options besides using a fee-for-service arrangement or 
joining a managed care plan.  The updated National Marketing Guide will address these 
new insurance options. 
The HCFA Reviewers 
Staff in HCFA regional offices are responsible for various aspects of overseeing contracts 
between Medicare and managed care plans, including review of marketing materials and 
keeping track of the reviews.  In 1998, a total of 96 staff members conducted reviews. 
According to reviewers, 31 percent of their timeon averageis spent conducting reviews. 
While reviewing marketing materials is only one of their duties, for some staff it is the 
most time-consuming.  In 1998, the median number of hours per week spent on reviews 
was 10 hours, with some reviewers spending as many as 35 hours. 
Reviewers must determine whether marketing materials meet regulatory requirements, 
accurately reflect the health plans Medicare contract, and accurately describe benefits. 
Consequently, the review of materials can be extremely complex to perform, requiring 
6 
1998 Marketing Materials  OEI-03-98-00271  attention to numerous details.  In the last quarter of calendar year 1998, most of the same 
HCFA staff responsible for conducting marketing reviews were also responsible for 
implementing the new Medicare + Choice program (effective January 1999).  The 
program increases the types of health insurance plans HCFA staff must oversee. 
Recent Developments in the Review Program 
In August 1999, HCFA issued an operational policy letter which contains new and 
updated models of enrollment and disenrollment letters.  The HCFA also created a 
standard form called the Summary of Benefits.  All plans are required to use this form in 
fiscal year 2000 when describing their benefits to beneficiaries. 
Currently, HCFA is conducting a pilot study to determine the effectiveness of having an 
outside contractor review marketing materials.  The HCFA has also contracted an 
evaluation of the Medicare managed care marketing regulatory program to determine the 
programs strengths and weaknesses. 
Studies by the Office of Inspector General 
Medicare managed care has been the focus of many Office of Inspector General (OIG) 
studies.  We have covered HCFA oversight of managed care plans, grievance and appeal 
issues, physician and beneficiary perspectives, beneficiary satisfaction, enrollment and 
service access problems, and use of disenrollment rates as performance indicators. 
We have also addressed managed care marketing within the last three years.  In 
Medicare's Oversight of Managed Care (OEI-01-96-00191), we found that while HCFA 
had increased the number of staff responsible for managed care oversight, some staff 
lacked managed care experience.  The HCFA staff needed certain skills to evaluate various 
aspects of health plan operations, including marketing.  We recommended that HCFA 
develop a more comprehensive training program for staff who oversee managed care 
plans.  In Medicare HMO Appeal and Grievance Processes (OEI-07-94-00280), we 
found that many health maintenance organizations had marketing materials and operating 
procedures with incorrect or incomplete information on appeal and grievance processes. 
We recommended that HCFA (1) work with health plans to standardize appeal and 
grievance language in marketing materials and operating procedures, and (2) take a more 
active approach in monitoring the plans. 
As a companion to this report, we are issuing, Medicare Managed Care: Goals of 
National Marketing Guide (OEI-03-98-00270).  We found that the four established goals 
of the National Marketing Guide were not completely met but that some aspects of the 
review process had been improved; that certain elements were not well understood or 
applied uniformly; that marketing-material reviews were not tracked consistently across 
HCFA regions; and that HCFA reviewers and health plan representatives felt 
7 
1998 Marketing Materials  OEI-03-98-00271  improvements were needed.  The findings from the companion reports were used to 
develop the recommendations contained in both reports. 
SCOPE AND METHODOLOGY 
Our purpose in this study was to determine how well marketing materials of managed care 
plans met Federal marketing guidelines in the first year after the National Marketing 
Guide was issued (November 1997 through November 1998).  We did not determine 
whether benefits were accurately presented in materials. 
We reviewed 319 pieces of HCFA-approved print materials, 249 of which came from 3 of 
the 10 HCFA regions.  Since the materials were approved for use in 1998, our review did 
not include Medicare + Choice materials.  We reviewed the materials with 24 OIG-created 
instruments designed specifically to evaluate different types of print materials, both 
pre-enrollment and member pieces.  The instruments contained questions related to 
prohibitions and requirements in the National Marketing Guide.  We formulated the 
questions from text in the Must Use/Cant Use/Can Use language chart, model member 
letters, checklists, and paragraphs highlighting important things for managed care plans to 
remember.  Questions addressed issues ranging from the most critical information 
requirements (e.g., advertisements must state that beneficiaries must continue to pay their 
Medicare Part B premium) to print size. 
One of the goals of the National Marketing Guide is that materials be consumer friendly, 
but there are no instructions as to what constitutes consumer-friendly text.  In order to 
determine whether materials were consumer friendly, we added two questions on this 
subject to each review instrument.  We asked, Is this piece clear or confusing? and Is 
this piece jargon-free or written with jargon?  Our definition of a clear piece was that the 
meaning of all the text was obvious and not misleading.  A jargon-free piece was one that 
did not contain jargon, or it contained jargon that was likely to be familiar to Medicare 
beneficiaries (e.g., primary care physician).  We defined jargon as (1) technical language 
(i.e., words, terms, phrases, and acronyms specific to a certain field); and (2) sentences 
with strings of big words, overblown phrases, -izing words (e.g., finalizing, utilizing), 
invented words (e.g. signage), legalese, or bureaucratese.  We recognize that determining 
whether pieces of writing are consumer friendly is a subjective process.  Therefore, we 
developed the above criteria which we believe are fair, and applied them systematically. 
See Appendix B for more detail on how we reviewed the marketing materials.  As 
mentioned earlier, the National Marketing Guides language chart is in Appendix A. 
This study was conducted in accordance with the Quality Standards for Inspections issued 
by the Presidents Council on Integrity and Efficiency. 
8 
1998 Marketing Materials  OEI-03-98-00271  F I N D I N G S  
Few 1998 approved marketing materials were in full 
compliance with the National Marketing Guide 
Eighty-seven percent (278 of 319) of marketing materials which we reviewed (1) 
contained statements that are specifically prohibited, (2) had missing, incomplete, or 
inaccurate information, or (3) did not meet print-size requirements.  All of these 1998 
materials had been approved by HCFA regional offices. 
Forty-eight percent of advertisements and sales brochures contained prohibited 
statements 
Managed care plans are prohibited from advertising with statements that might mislead 
beneficiaries.  Examples of such statements are in the Must Use/Cant Use/Can Use 
language chart (see Appendix A).  Of the 176 advertisements and sales brochures we 
reviewed, 48 percent contained one or more prohibited statements. 
We found prohibited statements on a variety of subjects.  Regarding benefits, for example, 
an acceptable phrase in the language chart is Minimal copays will apply.  We found 
advertisements and sales brochures that contained the prohibited statement, Minimal 
copays may apply.  If plan premiums are mentioned, managed care plans must state that 
beneficiaries must continue to pay the Medicare Part B premium.  But, we reviewed 
advertisements and sales brochures that contained the prohibited statement no premium. 
This might mislead Medicare beneficiaries into thinking they no longer need to pay the 
Medicare Part B premium.  On the subject of quality, plans can use superlatives or 
comparisons when they are substantiated (the source must be identified in the advertising 
piece).  Yet advertisements and sales brochures contained unsubstantiated superlatives, 
such as Access to the best physicians, specialists and hospitals in the area, and The best 
doctors are part of our team. 
Seventy-seven percent of materials had missing, incomplete, or inaccurate 
information 
The National Marketing Guide contains information that managed care plans must convey 
in their marketing materials so that beneficiaries can make well-informed choices and 
know their rights.  More than three-quarters of the approved marketing materials we 
reviewed (246 of 319) had one or more problems with this kind of information.  It was 
either missing, incomplete, or inaccurate.  Not all of the information is of equal 
significance.  But all of it is meant to help beneficiaries become informed.  Different types 
of materials are required to have different kinds of information.  The table below contains 
9 
1998 Marketing Materials  OEI-03-98-00271  examples of information that must be conveyed to beneficiaries, and includes percentages 
for specific types of pieces where we found missing, incomplete, or inaccurate 
information. 
Table 1. Information that must be conveyed but was missing, incomplete, or inaccurate 
Percentage of 
Type of Marketing  Materials with 
Materials  Information That Must Be Conveyed  Problems 
Sales brochures  Explanation of difference between managed care and fee-for-service  100% 
Subscriber agreements  Appeal procedures  90% 
Subscriber agreements and  General terms of contract between plan and Medicare program  67% 
member handbooks  Beneficiary options if contract between plan and Medicare is not 
renewed  61% 
Increase in plan premium is only permitted at beginning of contract 
year  42% 
Advertisements and  All beneficiaries (except those with end stage renal disease or in 
sales brochures  hospice programs) may apply for enrollment  42% 
Premium information must include statement that beneficiary must 
continue to pay Medicare Part B premium  20% 
All pre-enrollment 
marketing materials  All routine care must be received from plan providers (a.k.a. lock-in)  42% 
Source: OIG review of marketing materials, conducted February/March 1999 
Thirty-four percent of materials did not meet print-size requirements 
Of the 301 approved materials that we reviewed for print size, 34 percent (102 of 301) did 
not meet requirements.  Managed care marketing materials for Medicare beneficiaries are 
required to be in 12-point or larger print size.  Advertisements are the exception.  The 
requirement for advertisements is that footnotes be the same print size as the sales 
message.  Frequently, managed care plans put federally required information in an 
advertisements footnotes.  Beneficiaries might miss the information if footnotes are 
smaller than the sales message. 
Of the marketing materials other than advertisements, 26 percent (36 of 139) were in print 
size smaller than 12 points.  Forty-seven percent (65 of 139) were in 12 points or larger, 
and 27 percent (38 of 139) were unclear.  Frequently, print size cannot be determined 
because the materials a managed care plan has submitted to HCFA are not in their final 
format, or the plan submitted a facsimile that has distorted print. 
In advertisements alone, 41 percent (66 of 162) had footnotes smaller than the sales 
message, 24 percent (39 of 162) had footnotes of the same size, 12 percent (20 of 162) 
did not have footnotes, and 23 percent (37 of 162) were too unclear to tell size.  In our 
review, we found footnotes as small as 6 points when the sales message was 13 points. 
10 
1998 Marketing Materials  OEI-03-98-00271  Nearly half of materials reviewed were not consumer friendly 
Separate from our review of whether marketing materials met Federal guidelines, we 
conducted a subjective review to determine whether they were consumer friendly (see 
criteria on page 8).  We recognize that responsible, well-informed individuals might 
legitimately disagree about whether language is consumer friendly.  We based our 
conclusions on what we believe was a fair and systematic review of marketing materials. 
We found 46 percent of materials (145 of 312) were confusing or contained jargon. 
Reviewing each criteria separately, 40 percent (125 of 312) were confusing, and 28 
percent (87 of 312) contained jargon.  Twenty-one percent of the materials (67 of 312) 
were both confusing and contained jargon. 
In pre-enrollment materials, or materials that beneficiaries receive before enrolling in a 
managed care plan, we found 41 percent (85 of 205) were confusing or contained jargon. 
In member materials, or materials that beneficiaries receive after enrollment, we found 56 
percent (60 of 107) were confusing or contained jargon. 
Below are two figures that provide examples of confusing text and jargon that we found in 
marketing materials. 
Figure 1. Examples of Confusing Text in Marketing Materials 
$0 copay for hearing test; one hearing aid for each ear every three (3) years, 
limited to $300 credit toward the purchase of each hearing aid for a total credit 
of $600. (Advertisement) 
Additional Health Services recommended by 
All services and 
Contracted providers after receiving the 
benefits for care and 
Health Services authorized by the original 
conditions within  Referral are Covered if you obtain a new 
each of the following  Referral from your Primary Care Physician 
classifications shall be  before receiving such Health Services. 
excluded from  (Subscriber agreement) 
coverage under this 
plan except such 
UUnnlliimmiitteedd  mmaaxxiimmuumm  oonn  ggeenneerriicc  pprreessccrriippttiioonnss 
services as may be 
aafftteerr  rreeaacchhiinngg  $$11,,550000  lliimmiitt.. (Advertisement) 
specifically provided. 
(Summary of benefits) 
11 
1998 Marketing Materials  OEI-03-98-00271  Figure 2. Examples of Jargon in Marketing Materials 
...notice of an adverse reconsideration decision 
WORLDWIDE  (Subscriber agreement) 
EMERGENT 
AND/OR OUT-OF-
AREA URGENT 
...capitation, case rates, 
CARE COVERAGE  supplemental 
fee-for service and 
(ADVERTISEMENT)  charge maximum 
incentive payments, 
(Sales brochure) 
(Member handbook) 
stop loss protection 
Medical GP 
utilization management services 
name 
subrogation 
(Application form) 
(Subscriber agreement) 
community referral specialist 
Affiliated Community Physicians 
Medical Group Physician 
(Member handbook) 
Source: OIG review of marketing materials, conducted February/March 1999 
Marketing materials that are not clear and easy to understand may affect beneficiaries 
ability to make informed health-care choices. 
12 
1998 Marketing Materials  OEI-03-98-00271  R E C O M M E N D A T I O N S  
Our findings from this report and our companion report, Medicare Managed Care: Goals 
of National Marketing Guide (OEI-03-98-00270), wherein we surveyed users of the 
Medicare Managed Care National Marketing Guide and obtained data on marketing-
material reviews, provide evidence that the National Marketing Guide, while improving 
some aspects of the marketing-material review process, was not very successful at meeting 
its most important goal.  That goal is to provide Medicare beneficiaries with accurate and 
consumer friendly marketing materials.  Inaccurate and confusing materials may affect 
beneficiaries ability to make informed health-care choices. 
We recommend that HCFA: 
<	 update the National Marketing Guide.  The National Marketing Guide should further 
clarify which information is specifically prohibited or required in marketing materials. 
The National Marketing Guide should provide model materials that are accurate and 
easy to read.  It should clarify policy and operational instructions regarding the lead and 
local regional office responsibilities, the Use and File System (which allows plans to 
distribute sales material without prior approval), and the health plans use of checklists 
for member materials.  It should also ensure that checklists for member materials contain 
all the required information. 
<	 standardize and mandate use of member materials.  The HCFA should work toward 
standardizing as many types of member materials as possible.  Managed care plans 
should be required to use these materials when communicating with their enrolled 
Medicare beneficiaries. 
<	 develop standard review instruments.  These review instruments should be used by 
HCFA staff in determining if marketing materials (both pre-enrollment and member) 
contain all required information and do not contain prohibited information. 
<	 establish a quality control system.  The HCFA should periodically review a nationwide 
sample of previously approved marketing materials (both pre-enrollment and member) to 
determine if they meet Federal marketing guidelines. 
< track marketing-material reviews consistently and uniformly across all regions. 
<	 conduct meetings to review Federal marketing requirements with managed care 
plans that continually submit materials not in compliance with the requirements. 
<	 provide training on the use of the National Marketing Guide for HCFA reviewers 
and managed care plans. 
13 
1998 Marketing Materials  OEI-03-98-00271  AGENCY COMMENTS 
The Health Care Financing Administration (HCFA) reviewed this report and the 
companion report on goals of the National Marketing Guide and concurred with our 
recommendations.  We summarized the agencys comments below, however, the full 
comments are in Appendix C. 
<	 update the National Marketing Guide.  The agency is updating the National Marketing 
Guide, including checklists and model letters.  They are also clarifying what is allowed 
and prohibited in marketing materials.  As they believe the Use and File System is an 
important tool, they plan to develop materials to promote a better understanding of its 
operation. 
<	 standardize and mandate use of member materials.  Work toward standardizing 
certain materials has already begun.  As of contract year 2000, health plans contracting 
with HCFA must use a standardized Summary of Benefits.  In the future, beneficiary 
notifications such as the Evidence of Coverage will be standardized, and their mandatory 
use will be phased in. 
<	 develop standard review instruments.  The agencys goal is to have a new and 
comprehensive data collection instrument, called the Plan Benefit Package, fully 
implemented in contract year 2001.  This instrument will have multiple uses, including a 
standardized way to collect descriptions of benefits from health plans.  The instrument 
can then be used to review health plan marketing materials.  In the meantime, a modified 
version of a prior data collection instrument will be used.  In addition, the Product 
Consistency Team, comprised of representatives from all ten HCFA regional offices, will 
meet monthly.  Through ongoing dialogue, the team is expected to uncover and correct 
any inconsistencies in operational or policy interpretations of standardized materials. 
<	 establish a quality control system.  The HCFA has established procedures for verifying 
that all final versions of beneficiary notices are the same as the versions HCFA approved. 
They also plan to review a sample of actual printed marketing materials from a random 
sample of health care organizations.  The agency has also established a quality control 
system in their pilot study of the effectiveness of contracting the marketing material 
review to a single national contractor.  Moreover, the Product Consistency Team will be 
critical to overall quality control efforts. 
<	 track marketing-material reviews consistently and uniformly across all regions. 
The HCFA regional offices will be required to track receipt and approval of all 
marketing materials when the new Health Plan Management System becomes operational 
in 2000.  The Managed Care Information System, which is currently used by a number of 
the regional offices, will become part of the new system. 
14 
1998 Marketing Materials  OEI-03-98-00271  <	 conduct meetings to review Federal marketing requirements with managed care 
plans that continually submit materials not in compliance with the requirements. 
The HCFA is in the process of updating a contractor performance monitoring protocol. 
The revised protocol will require HCFA reviewers who find a pattern of noncompliant 
marketing submissions to take action, including meeting with managed care plans.  As 
the agency continues to review its marketing material review program, it will determine 
additional steps that need to be taken, including sanctioning. 
<	 provide training on the use of the National Marketing Guide for HCFA reviewers 
and managed care plans.  The HCFA currently includes a marketing session in their 
annual training program for reviewers.  They plan to expand the program to address the 
needs of contracting health plans.  In addition, they expect that Product Consistency 
Team meetings will promote better understanding of the National Marketing Guide. 
OIG RESPONSE 
We appreciate the comprehensiveness of HCFAs comments.  We believe the agencys 
stated efforts can result in comparable and understandable materials which beneficiaries 
need to make informed health-care choices.  We are hopeful that the update of the 
National Marketing Guide will include clarification of lead and local regional office 
responsibilities, and clarification as to whether health plans must submit checklists along 
with the member materials they submit for HCFAs review.  These two elements of the 
guidelines were not specifically mentioned in the agency comments regarding various 
elements of the guidelines that would be updated. 
We have one other concern regarding the Product Consistency Team.  The agency states 
they will be relying on the team to play a critical role in quality control, to uncover and 
correct inconsistencies in operational or policy interpretations of standardized materials, 
and to update the National Marketing Guide as needed.  The past team was not fully 
effective in these areas, and we are hopeful that the new team has the tools and authority 
needed to accomplish these important objectives. 
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1998 Marketing Materials  OEI-03-98-00271  A P P E N D I X  A  
National Marketing Guides Language Chart in 1998 
Marketing Language: Must Use/Cant Use/Can Use Chart 
The following items: Lock-in, Eligibility, and Contract with Government, are required items in 
advertising and marketing materials. 
Subject  Must Use  Can't Use  Can Use  Reason 
Lock-in    Enrolled members must    "Participating    Enrolled members  HCFA requires 
use (name of plan)  providers" unless you  must use (name of  lock-in for all 
(contracting, affiliated,  use plan name  plan) (contracting,  media to inform 
or name of plan  affiliated, or name  beneficiaries of 
participating) providers  of plan  managed care 
participating)  requirement. 
  Plan available to all  providers 
Medicare beneficiaries  Because of the 
length of the 
MEDIA: All except  messages and the 
outdoor advertising.  nature of outdoor 
*Outdoor advertising has  advertising, this 
the option of excluding this  topic does not 
topic.  apply to outdoor 
advertising. 
* See definition of outdoor 
advertising on page 124. 
Quality*    Superlatives (e.g.    Qualified  Quality is not a 
highest, best)  superlatives (e.g.  required topic in 
among the best,  marketing 
  Unsubstantiated  some of the  materials. 
comparisons  highest) or 
superlatives (e.g. 
ranked number 1), 
if they can be 
substantiated 
(Source must be 
identified in the 
advertising piece.) 
  "Plan delivers 
(adjective) quality 
of care." 
  Descriptions of 
plan's initiatives 
related to quality. 
  Can use satisfaction 
survey results. 
(Must disclose year 
and source.) 
MEDIA: All 
* HCFA has the discretion to disapprove language based on site visit reviews identifying substantial deficiencies in plan 
operation. 
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Subject  Must Use  Can't Use  Can Use  Reason 
Premiums/    If a plan premium is    "No premium"  The following may be used.    Materials must 
Costs  mentioned, it must be  disclose that 
accompanied by a    "No premiums or    "No plan premium."  beneficiaries 
statement that  deductibles"  must continue to 
beneficiaries must    "Plan premium equals  pay the Part B 
continue to pay Part B   "Free"  _______"  premium and 
premium or Medicare  continue their 
premium.   $0 plan premium  Medicare Part B 
coverage while 
MEDIA: Print    "At no extra cost to you"  enrolled in the 
but only if referring to a  HMO. 
  TV-Part B caveat must  specific benefit 
be flashed in TV safe 
range or mentioned in    "No plan premiums or  Because of the 
narration.  deductibles"  length of the 
messages and the 
  "No premiums or  nature of outdoor 
deductibles (you must  advertising, this 
continue to pay the  topic does not 
Medicare Part B  apply to outdoor 
premium)"  advertising. 
  "No premium beyond 
your monthly Medicare 
payment" 
  "No premiums other than 
what you currently pay 
for Medicare 
MEDIA: All except outdoor 
advertising (See Must 
Use) 
  "Plan premium" 
MEDIA: Outdoor. Outdoor 
advertising has the option of 
excluding this topic. 
Testimonials    Content must comply    Cannot have non-
with HCFA marketing  members say 
guidelines, including  he/she belongs. 
statements by  (Can use actors, 
members.  but they cannot 
say they belong to 
the plan.) 
  Speaker must 
identify specific 
health plan 
membership 
MEDIA: All 
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1998 Marketing Materials  OEI-03-98-00271  A P P E N D I X  A  
Subject  Must Use  Can't Use  Can Use  Reason 
Contract with the    Must include one of    "Recommended or    "HMO with a  Because of the 
Government  the phrases from the  endorsed by Medicare"  Medicare contract"  length of the 
can use column  messages and the 
  Cannot imply that plan    "A federally  nature of outdoor 
MEDIA: All except  has a unique or custom  qualified HMO  advertising, this 
outdoor. Outdoor  arrangement with the  with a Medicare  topic does not 
advertising has the  government, e.g.:  contract"  apply to outdoor 
option of excluding this  -- "Special contract  advertising. 
topic.  with Medicare"    "A federally 
-- "Special plan for  qualified Medicare 
Medicare  contracting HMO" 
beneficiaries" 
  "Medicare 
approved HMO" 
MEDIA: All 
Physicians and    If the number of    Implication that    "(Plan's name)    Do not use the 
Other Health  physicians and other  providers are  participating  word 
Care Providers  health care  available exclusively  providers"  participating 
providers is used, it  through the particular  when referring 
must include only  HMO unless such a    "Network"  to plan 
those available to  statement is true  providers  providers 
Medicare  (unless you use 
beneficiaries    "Participating    "Contracting"  plan name), 
providers" unless you  providers  since it could 
use plan name  be confused 
MEDIA: TV, radio,    "Affiliated"  with a 
outdoor  providers  participation 
agreement 
  If the number of    Number of  with Medicare. 
physicians and other  providers should  Plans should 
health care providers  be same total  either use 
is used, it must  number of  contracting 
include only  Medicare  or plan name 
providers available  providers  when referring 
to Medicare  to plan 
beneficiaries. If a  providers. 
total number is used  MEDIA: All 
it must separately 
delineate the number 
of primary care 
providers and 
specialists included. 
MEDIA: Print and 
direct mail 
Limited Open    Describe open 
Enrollment  enrollment period 
Period  if open enrollment 
is not continuous 
MEDIA: All 
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1998 Marketing Materials  OEI-03-98-00271  A P P E N D I X  A  
Subject  Must Use  Can't Use  Can Use  Reason 
Eligibility    Must indicate    "No health    "Anyone with    Since all Medicare 
that all  screening" unless  Medicare may apply"  beneficiaries may 
Medicare  specific mention is  enroll in Medicare-
beneficiaries  made of ESRD and    "Medicare entitled"  contracting HMOs, 
may apply.  hospice  you may not refer to 
  "Individuals eligible  your plan as a senior 
  "Seniors" unless  for Medicare"  plan (unless you 
term appears with  refer to it as part of 
"and all other    "Individuals on or  the plan name). The 
Medicare eligibles"  entitled to Medicare"  term senior plan 
implies that disabled 
  "Plan designed    "Medicare  beneficiaries may not 
especially for  beneficiaries"  enroll. 
seniors" 
  "Medicare enrollees" 
  "Senior plan" unless    Medicare Part A is 
part of plan name    "People with or on  not a requirement for 
Medicare"  enrollment in 
  "Individuals age 65  Medicare-contracting 
and over"    "Seniors and all other  HMOs. Plans may 
Medicare-eligibles"  require beneficiaries 
who are not covered 
  "You must have    "No physicals  under Part A to 
Parts A and B of  required"  purchase equivalent 
Medicare"  coverage directly 
  "No health screening"  from the plan 
if a caveat is included 
for ESRD and hospice 
  "If you do not have 
Medicare Part A, you 
may purchase Part A 
coverage from Social 
Security or purchase 
equivalent coverage 
from the HMO" 
MEDIA: ALL 
Claims    "No paperwork"    "Virtually no    Members may be 
Forms/  paperwork"  required to submit 
Paperwork    "No claims or  bills or claims 
paperwork/complicat    "No paperwork when  documentation when 
ed paperwork"  using plan providers"  using out-of-plan 
providers. 
  "No claims forms"    "Hardly any 
paperwork" 
MEDIA: All 
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1998 Marketing Materials  OEI-03-98-00271  A P P E N D I X  A  
Subject  Must Use  Can't Use  Can Use  Reason 
Benefits 
a. Comparison    If premiums and    "Premiums and benefits    Premiums, 
benefits vary by  may vary by county" or  benefits and /or 
geographic area, must  "These benefits apply to  copayment 
clearly state this or  the following counties"  amounts may 
must clearly state  vary by county 
geographic area in    "Except for ________  within a given 
which differing  county"  service area. 
premiums and  This must be 
benefits are  clearly conveyed 
applicable.  MEDIA: All  in all marketing 
materials. 
  If only benefits vary, 
clearly state 
geographic area in 
which benefits are    If benefits are 
applicable.  specified within 
the piece, any 
MEDIA: All  applicable 
copayment 
b. Limitations   Minimal copays    State exact dollar amount  should be stated 
may apply  limit on any benefit  or you may 
include the 
 At no extra cost    "Limitations and  general 
to you or free, if  restrictions may apply"  statement as 
copays apply  shown. 
  "Minimal copayments will 
apply" 
  "Minimal copayments may 
vary by county 
  "We cover  Prescription 
c. Prescription    If prescription drugs  prescription    State which benefits are  drugs are an 
Drugs  are mentioned and  drugs" unless  subject to limitations  important 
have limitations,  accompanied by  benefit that 
must say:  reference to    Fully disclose dollar  must be 
  limited drug  limitation  amount of copayments and  adequately 
coverage;  annual limit  described. Any 
  drug coverage    "Prescription  dollar limits 
benefits subject to  drug coverage"    If limited, you must say so  must be clearly 
limitations; or  unless  conveyed. 
  up to xxx annual  accompanied by    Limited drug coverage 
limit or xxx limit  reference to  with xx copayments and 
per year and other  limitation  xxx annual limit 
limits and 
restrictions may    "Prescriptions must be 
apply.  filled at contracting or plan 
affiliated pharmacies." 
MEDIA: All 
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1998 Marketing Materials  OEI-03-98-00271  A P P E N D I X  A  
Subject  Must Use  Can't Use  Can Use  Reason 
Definitions    "Life threatening"    Emergency --   Emergency criteria 
definition as stated in  should be 
  True emergency  current HCFA policy.  explained per 
Medicare 
  Urgent -- definition  guidelines rather 
as stated in current  than in the 
HCFA policy.  commercial 
context. 
MEDIA: Direct mail 
Drawings/    "Eligible for free    "Eligible for a free    It is a prohibited 
prizes  drawing and prizes"  drawing and prizes  marketing practice 
with no obligation"  to use free gifts and 
MEDIA: Direct mail,  prizes as an 
flyers, print advertising    "Free drawing  inducement to 
without obligation"  enroll. Any 
gratuity must be 
MEDIA: Direct mail,  made available to 
flyers, print advertising.  all participants 
regardless of 
enrollment. The 
value of any gift 
must be less than 
the nominal 
amount of $10. 
Sales    "A sales    "A plan    This phrase must 
presentation  representative will be  representative will be  be used whenever 
s  present with  available to answer  beneficiaries are 
information and  questions."  invited to attend a 
applications."  group session with 
the intent of 
MEDIA: Flyers,  enrolling those 
invitations and print  individuals 
advertising  attending. 
  "A sales    This phrase must 
representative may  be included on any 
call."  response card in 
which the 
MEDIA: Response card  beneficiary is asked 
to provide a 
  A  telephone number. 
telecommunications 
device for the deaf 
(TDD) is available to 
get additional 
information or set up 
a meeting with a 
sales representative. 
  For accommodation 
of persons with 
special needs at sales 
meetings, call 
(Health Plan Phone 
Number). 
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1998 Marketing Materials  OEI-03-98-00271  A P P E N D I X  B  
OIGs Methods For Reviewing Marketing Materials 
Marketing material medium.  Our review was of hand-held printed marketing materials.  We 
did not review materials designed for radio, television, Internet, or billboards.  Nor did we review 
telemarketing scripts or slide presentations. 
Universe of materials.  All 319 pieces we reviewed had been reviewed and approved by the 
Health Care Financing Administration's (HCFA's) regional staff in 1998 and were on file in those 
offices. 
Source of materials.  A majority of the materials we reviewed came from 3 of the 10 HCFA 
regions.  Of the 319 pieces that we reviewed, 249 came from these three regions.  We selected 
these regions because they represented a variety of managed care experience and differing 
population sizes of Medicare beneficiaries.  We went on-site to the three regional offices and 
reviewed all print materials approved within one calendar quarter of 1998.  We also reviewed 10 
mailed pieces of approved print materials from the remaining 7 HCFA regional offices. 
Types of materials.  Prior to determining the types of materials to review, we reviewed Federal 
marketing guidelines in the Health Maintenance Organization/Competitive Medical Plan Manual 
and the Medicare Managed Care National Marketing Guide, referred to as the National 
Marketing Guide in this report.  We compiled a list of types of marketing materials that were 
addressed in these two sources.  Most marketing materials fit into one of two broad categories: 
pre-enrollment materials and member materials.  The former includes advertising and any kind of 
promotional materials used to interest Medicare beneficiaries in the managed care plan.  The latter 
consists of communications to members of the plan.  These might be letters notifying members of 
a change in providers or a change in benefits; information about a claim or payment; subscriber 
agreements conveying rights of the member as well as member and plan responsibilities; and 
letters confirming enrollment and disenrollment.  A few pieces, e.g., Directory of Providers, can 
fit into both categories.  Such pieces are often in promotional packets, and they are also given to 
members.  In our analysis, we counted them as pre-enrollment materials.  The types of print 
materials we did not review (see tables on page 22) were ones not specifically referred to in the 
two sources of Federal guidelines mentioned above.  We learned about these other types of print 
materials during our on-site reviews and from respondents in our surveys. 
Review instruments.  We created 24 types of review instruments to match the variety of 
pre-enrollment and member materials described in Federal guidelines.  Our instruments contained 
questions related to prohibitions and requirements in the National Marketing Guide.  We 
formulated the questions from text in the "Must use/Cant use/Can use" language chart, 
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1998 Marketing Materials  OEI-03-98-00271  A P P E N D I X  B  
model member materials, checklists, and paragraphs highlighting important things for plans to 
remember when creating materials.  The instruments contained from 5 to 86 questions depending 
on the type of piece reviewed.  Questions addressed issues ranging from the most critical 
information requirements (e.g., advertisements with premium information must state that 
beneficiaries must continue to pay their Medicare Part B premium) to formatting (i.e., print size). 
The longest review instrument (86 questions) was for the subscriber agreement.  This was actually 
a two-part instrument with the second part focusing on appeal rights and procedures.  We used 
this second part for the determination and appeal sections of the subscriber agreements, and for 
two other types of materials: (1) the standard determination letter (used when a member's request 
for a service is denied) and (2) the notice of non-coverage (necessary for members who believe 
they were discharged too soon from a hospital).  Both of these materials include members' rights 
to appeal and the appeal procedures. The instrument's questions addressed the many steps in the 
appeal process, including standard and expedited determinations, standard and expedited 
reconsiderations, and hospital discharges. 
Format of review questions.  Possible answers to questions in the review instruments were "Yes, 
No, Not mentioned, Can't tell."  An example of a question is, "Are footnotes in this ad the same 
size as the sales message?"  We would select "Yes" as the answer if the footnotes were the same 
size, "No" if the footnotes were not the same size, "Not Mentioned" if the ad did not contain 
footnotes, and "Can't Tell" if the print size was too blurred for us to tell.  Frequently, plans submit 
to HCFA photocopies or facsimiles that have distorted print. They also submit e-mails that 
contain the text of their marketing materials but no indication of the final format. 
23 
1998 Marketing Materials  OEI-03-98-00271  A P P E N D I X  B  
Table 1.  Types of print pre-enrollment materials we reviewed and types we did not review 
PRE-ENROLLMENT MATERIALS 
Types Reviewed  Types Not Reviewed 
<  Enrollment application forms  <  Instructions for enrollment application forms; translator and/or 
<  Advertisements - newspapers,  witness forms 
magazines  <  Event invitations; event registration forms 
<  Advertisements - direct mail, letters to  <  Letters asking former member to re-join plan 
non-Medicare members turning 65  <  Letters asking beneficiary for opportunity to explain plan in 
<  Sales brochures, booklets, leaflets  their home 
<  Summaries of Benefits  <  Letters from a provider promoting the plan 
<  Directories of Providers  <  Letters saying plan tried to contact beneficiary 
<  Member Handbooks  <  Surveys for beneficiary to evaluate a sales meeting 
<  Surveys for beneficiary to evaluate readability of sales material 
<  Envelopes; postcards; thank you cards 
Table 2.  Types of print member materials we reviewed and types we did not review 
MEMBER MATERIALS 
Types reviewed  Types Not Reviewed 
<  Letters confirming enrollment  <  Member card materials 
<  Letters denying enrollment  <  Letters with retroactive date of enrollment 
<  Letters confirming voluntary disenrollment  <  Disenrollment application forms 
<  Letters confirming involuntary disenrollment  <  Letters denying disenrollment 
<  Letters describing annual changes in benefits,  <  Letters confirming disenrollment after date of death 
premiums, providers, etc.  <  Letters regarding premium refund when member 
<  Letters describing a mid-year change in benefits,  paid unnecessarily 
premiums, providers, etc.  <  Schedules of co-payments 
<  Letters re: members failure to pay plan premium  <  Letters notifying member that benefits are 
<  Letters with plans determination of members  exhausted 
request for service  <  Invoices; payment for claims 
<  Letters providing status of an appeal  <  Letters describing Advance Directive (living will) 
<  Letters providing status of a filed grievance  <  Letters requesting update of members name, 
<  Notices of Non-Coverage (used if beneficiary  address, and phone number 
believes discharge from hospital is too early)  <  Letters informing members of senior advocacy 
<  Letters describing Physician Incentive Plan  board 
<  Letters notifying members that provider is no  <  Letters thanking member for sharing concerns 
longer with plan  <  Birthday cards; invitations to events for members 
<  Letters addressing operational changes (e.g.,  <  Letters requesting referrals from current member of 
change in business hours)  any potential new members 
<  Letters responding to a members request for  <  Surveys to determine demographics of plans 
information  elderly members who are still working 
<  Subscriber agreements (contains members rights,  <  Surveys of member satisfaction 
members and plans responsibilities; covered and  <  Surveys of member reasons for disenrollment 
non-covered services)  <  Surveys of members health 
<  Wellness materials (disease prevention information) 
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