Department of Health and Human Services


OFFICE OF 

INSPECTOR GENERAL 

MEDICARE ADVANTAGE 


MARKETING MATERIALS FOR 


CALENDAR YEAR 2005 


Daniel R. Levinson


Inspector General 


August 2006


OEI-01-05-00130

Office of Inspector General 

http://oig.hhs.gov 

The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as 

amended, is to protect the integrity of the Department of Health and Human Services (HHS) 

programs, as well as the health and welfare of beneficiaries served by those programs. This 

statutory mission is carried out through a nationwide network of audits, investigations, and 

inspections conducted by the following operating components: 

Office of Audit Services 

The Office of Audit Services (OAS) provides all auditing services for HHS, either by conducting 

audits with its own audit resources or by overseeing audit work done by others. Audits 

examine the performance of HHS programs and/or its grantees and contractors in carrying out 

their respective responsibilities and are intended to provide independent assessments of HHS 

programs and operations. These assessments help reduce waste, abuse, and mismanagement 

and promote economy and efficiency throughout HHS. 

Office of Evaluation and Inspections 

The Office of Evaluation and Inspections (OEI) conducts management and program evaluations 

(called inspections) that focus on issues of concern to HHS, Congress, and the public. The 

findings and recommendations contained in the inspections generate rapid, accurate, and up-todate information on the efficiency, vulnerability, and effectiveness of departmental programs. 

OEI also oversees State Medicaid Fraud Control Units, which investigate and prosecute fraud 

and patient abuse in the Medicaid program. 

Office of Investigations 

The Office of Investigations (OI) conducts criminal, civil, and administrative investigations of 

allegations of wrongdoing in HHS programs or to HHS beneficiaries and of unjust enrichment 

by providers. The investigative efforts of OI lead to criminal convictions, administrative 

sanctions, or civil monetary penalties. 

Office of Counsel to the Inspector General 

The Office of Counsel to the Inspector General (OCIG) provides general legal services to OIG, 

rendering advice and opinions on HHS programs and operations and providing all legal support in 

OIG’s internal operations. OCIG imposes program exclusions and civil monetary penalties on 

health care providers and litigates those actions within HHS. OCIG also represents OIG in the 

global settlement of cases arising under the Civil False Claims Act, develops and monitors 

corporate integrity agreements, develops compliance program guidances, renders advisory 

opinions on OIG sanctions to the health care community, and issues fraud alerts and other 

industry guidance. 
ΔEXE CUTIVE S U MMAR Y

 EXECUTIVE SUMMAR Y 

OBJECTIVE 

To determine whether Medicare Advantage marketing materials for 

2005 met the Centers for Medicare & Medicaid Services’ (CMS) 

marketing requirements. 

BACKGROUND 

The Medicare Prescription Drug, Improvement, and Modernization Act 

of 2003 (P.L. 108-173), referred to as the MMA, expands the availability 

of managed care options through a revised managed care program, 

Medicare Advantage (MA). MA organizations recruit beneficiaries 

using a variety of marketing materials. These materials can be grouped 

into two broad categories: advertising materials and enrollment 

materials (i.e., sales brochures, enrollment forms, summaries of 

benefits, and evidence of coverage documents). MA organizations 

generate sections of their plans’ summaries of benefits using CMS’s 

Health Plan Management System (HPMS), which CMS also uses to 

track marketing materials. 

CMS’s Managed Care Manual includes standards that MA marketing 

materials must meet to obtain CMS’s approval. These requirements, 

last updated in August 2004, address such aspects of marketing 

materials as premium costs, required definitions, benefit descriptions, 

prescription drug benefit descriptions, and required contact information. 

We reviewed marketing materials for January through December 2005 

from a random sample of 36 MA plans. We did not review marketing 

materials for Medicare Part D plans because Part D did not begin until 

January 1, 2006. While our sample was randomly drawn, it was not 

large enough to produce reliable estimates of the population of plans. 

Using standard protocols that we developed based on CMS’s Managed 

Care Manual, we reviewed advertisements, sales brochures, enrollment 

forms, summaries of benefits, and evidence of coverage documents from 

the 36 MA plans. We also interviewed staff at four CMS regional offices 

responsible for reviewing a large number of marketing materials from 

MA plans. 

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EXE CUTIVE S CUTIVE S U MMAR Y

FINDINGS 

Some marketing materials in our sample lacked CMS-required 

information concerning limitations to prescription drug benefits. 

• Fifty-five percent of summaries of benefits did not state that 

formulary contents can change. 

• Eighteen percent of evidence of coverage documents did not specify 

that beneficiaries can use the appeals process to have drugs added 

to the plan’s formulary or to appeal a decision not to cover a 

particular drug. 

• Ten percent of advertisements did not identify coverage limitations 

when referring to prescription drug benefits. 

Some marketing materials in our sample lacked elements required 

by CMS to ensure that beneficiaries can access plan information. 

• Fifty-two percent of advertisements did not provide operating hours 

for their customer service numbers. 

• Sixty-seven percent of summaries of benefits and 8 percent of 

evidence of coverage documents did not indicate that 

1-800-MEDICARE operates 24 hours a day, 7 days a week. 

Moreover, this information was missing from the sections of the 

summaries of benefits that MA plans generate from HPMS. 

• Ten percent of advertisements failed to present text telephone 

numbers for individuals with hearing impairments in the same font 

size and style as other phone numbers. 

• Twenty-eight percent of advertisements inviting beneficiaries to 

sales presentations failed to indicate that special arrangements 

could be made at these events for persons with special needs. 

• Thirty-nine percent of evidence of coverage documents did not 

indicate that individuals with special needs could obtain the 

document in alternative formats. 

Some marketing materials in our sample did not clearly convey 

information concerning other aspects of MA plan coverage. 

• Twenty-eight percent of summaries of benefits did not define the 

term “benefit period” when using the term to describe their plan. 

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EXE CUTIVE S U MMAR Y 

• Thirty-six percent of summaries of benefits did not state that the 

plan’s contract with CMS is renewed annually and that nonrenewal 

could result in loss of coverage. 

• Nineteen percent of enrollment forms and 14 percent of evidence of 

coverage documents contained technical language. Eleven percent 

of both enrollment forms and evidence of coverage documents 

contained unclear language. 

CONCLUSION 

Our review found that some Medicare Advantage marketing materials 

lacked CMS-required information essential for beneficiaries to make 

informed plan choices. Missing information concerned prescription drug 

benefit limitations and details that convey how beneficiaries can access 

plan information. Furthermore, some marketing materials used 

unclear and technical language. 

CMS’s continued diligence in reviewing marketing materials is 

essential. CMS will also need to ensure consistency between its HPMS 

system and its requirements for marketing materials. We will continue 

to monitor marketing materials for Medicare Advantage plans and for 

Medicare Part D plans, as well as CMS’s oversight of the review process 

for these materials. 

AGENCY COMMENTS 

CMS concurred with our findings, stating that the report will help it 

improve its marketing review process. CMS also highlighted 

enhancements it made to the review process for Medicare Advantage 

and Medicare Part D plan marketing materials to improve their 

consistency. These include a consolidated review of Medicare 

Advantage and Medicare Part D plan marketing materials by CMS 

regional office staff, a contractor review of the consistency of marketing 

materials, and new features in its HPMS system to assist in monitoring 

the review process. 

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Δ T ABLE OF CONTENTS 

EXECUTIVE SUMMARY ..................................... i

INTR O D U C T I ON ........................................... 1

FINDI NGS ................................................. 5

Some materials lack prescription drug benefit limitations ....... 5

Some materials lack elements needed to access plan information . 6 

Some materials do not clearly convey coverage information...... 8

CON C L U SION ............................................ 12

Agency Comments...................................... 12

ENDN OTE S ............................................... 13

APPENDIXES ............................................. 15

A: Methodology........................................ 15

B: Agency Comments ................................... 18

ACKN O W LEDGMENTS .................................... 22
Δ INTRODU C TION 

OBJECTIVE 

To determine whether Medicare Advantage marketing materials for 

2005 met the Centers for Medicare & Medicaid Services’ (CMS) 

marketing requirements. 

BACKGROUND 

Medicare Managed Care 

The Medicare Prescription Drug, Improvement, and Modernization Act 

of 2003 (P.L. 108-173), referred to as the MMA, revised the managed 

care program and expanded the availability of managed care options for 

Medicare beneficiaries. The MMA renamed the revised managed care 

program Medicare Advantage (MA). This program took effect 

March 22, 2005.1 

The MA encompasses multiple forms of Medicare managed care. As of 

January 2005, approximately 5.4 million Medicare beneficiaries were 

enrolled in managed care plans. Roughly 4.7 million, or 85 percent, of 

these beneficiaries received services through 143 health maintenance 

organizations, hereafter referred to as MA organizations.2 Each MA 

organization may offer multiple plans. 

We evaluated materials that MA organizations distributed to market 

their plans for calendar year 2005. These plans operated prior to 

implementation of the Medicare prescription drug benefit, hereafter 

referred to as Part D. We did not review marketing materials for the 

Part D plans, as Part D did not begin until January 1, 2006. Thus, any 

references to MA plan drug benefits exclude Part D drug benefits. 

Medicare Advantage Marketing 

MA organizations market their plans to differentiate them from both 

the original Medicare fee-for-service program and other MA plans. MA 

organizations employ a variety of marketing materials to inform and 

recruit beneficiaries. These materials can be grouped into two broad 

categories: 

• Advertising materials, including newspapers, direct mail, 

television advertisements, and radio scripts. 

• Enrollment materials, including the following: 

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INTROD UCT ION 

o Sales brochures, which are product descriptions used in 

the sales/enrollment process that provide more details 

than advertisements; 

o Enrollment forms/applications, which beneficiaries 

complete prior to enrolling in an MA plan; 

o Evidence of coverage documents (also known as the 

member contract or subscriber agreement), which detail 

the benefits and restrictions of the MA plan; and 

o Summary of benefits documents, which provide a 

synopsis of the MA plan’s coverage. 

To ensure consistency across summaries of benefits, CMS directs MA 

plans to generate sections of these documents directly from information 

the plans enter into the Health Plan Management System (HPMS).3 

CMS maintains the HPMS to track marketing materials that plans 

submit to CMS for review. Plans also use the HPMS to submit 

marketing materials electronically to CMS for review. 

Medicare Managed Care Marketing Oversight 

Pursuant to section 1876 (c)(3)(C) of the Social Security Act and Federal 

regulations, CMS, on behalf of the Secretary of the Department of 

Health and Human Services, reviews the marketing materials that MA 

organizations use.4 Federal regulations set forth required elements of 

marketing materials. Pursuant to the regulations, MA organizations 

must provide beneficiaries with adequate written descriptions of rules, 

plan benefits, appeals and grievance processes, and the information 

necessary to make informed decisions about enrollment.5 Federal 

regulations also prohibit some marketing practices. For example, MA 

organizations must not discriminate against recruiting beneficiaries 

from low-income areas, mislead or confuse beneficiaries, misrepresent 

the health plan or CMS, or provide monetary rebates for enrollment.6 

CMS’s Medicare Managed Care Manual (hereafter, the manual) 

provides operational guidelines for meeting Federal marketing 

requirements and provides instructions regarding the review process. 

In addition, the manual instructs plans to make their marketing 

materials reader-friendly.7 In the manual, CMS also provides MA 

organizations with models of various marketing materials they can 

adapt for their own use. CMS drew heavily upon the manual when it 

created guidelines for marketing materials for the Medicare Part D 

benefit that began in January 2006.8 

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INTROD UCT ION 

The manual specifies language that marketing materials must use, 

language plans can use, and language they cannot use. This guidance 

addresses such aspects of marketing materials as: 

• descriptions of premium costs, 

• required plan contact information, 

• descriptions of prescription drug benefits, and 

• definitions of coverage terms (e.g., benefit period). 

For example, marketing materials that refer to prescription drug 

benefits must reference any limitations to these benefits to avoid 

misleading beneficiaries about the true level of coverage.9 

Prior Work by the Office of Inspector General 

Two Office of Inspector General (OIG) reviews of managed care 

marketing materials (OEI-03-98-00270 and OEI-03-98-00271) conducted 

in 2000 found that only 13 percent of a purposive sample of 

CMS-reviewed materials met all of CMS’s marketing requirements.10 

Furthermore, OIG found that 46 percent of the materials were 

confusing or contained jargon. OIG recommended that CMS 

standardize and mandate use of member materials, update its 

marketing guidelines, develop standard review instruments, and track 

marketing material reviews across regions. 

The reports’ recommendations spurred changes in CMS’s handling of 

Medicare managed care marketing materials. Specifically, CMS 

established standard and model forms for member materials, formalized 

marketing guidelines into the manual, and developed the HPMS to 

track marketing materials. 

METHODOLOGY 

We reviewed a total of 415 marketing materials from a multistage 

random sample of 36 MA plans. While our sample was randomly 

drawn, it was not large enough to produce reliable estimates of the 

population of plans. The MA plans we examined met two criteria. 

First, these MA organizations were in operation prior to 

January 1, 2004. Second, these MA organizations enrolled new 

members in December 2004. These criteria ensured that we selected 

plans that had at least 1 year of experience and that participated in 

Medicare through January 2005. 

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INTROD UCT ION 

These criteria yielded a population of 130 MA organizations from CMS’s 

HPMS. Some MA organizations offer more than one plan; however, we 

selected only one plan from each organization.11 We sampled plans 

based on the number of plans offered by the MA organizations and the 

number of members in these plans. Appendix A contains a detailed 

description of our methodology. 

After selecting our sample, we contacted the 36 MA plans and requested 

copies of any of the following materials the selected plan issued through 

March 1, 2005: advertising materials, sales brochures, enrollment 

forms/applications, summaries of benefits, and evidence of coverage 

documents. We received materials from all 36 plans for a total of 

415 pieces of marketing materials. For each plan, we received one 

enrollment form, one summary of benefits, and one evidence of coverage 

document. We also received a total of 281 advertisements and 26 sales 

brochures from the 36 plans. 

For our review, we created and used five review guides—one for each 

type of material. We based these review guides on requirements 

specified in the manual. We used five separate review guides because 

CMS marketing requirements vary depending on the type of marketing 

material. In addition to determining whether the marketing materials 

met CMS’s requirements, we assessed whether the material was clear 

(i.e., obvious and not misleading) and free of technical language. 

Additionally, we interviewed staff from four CMS regional offices that 

are responsible for overseeing large numbers of MA plans: Atlanta, 

Chicago, San Francisco, and Seattle. Our interviews focused on these 

offices’ reviews of marketing materials and barriers to the review 

process. 

This study was conducted in accordance with the “Quality Standards for 

Inspections” issued by the President’s Council on Integrity and 

Efficiency and the Executive Council on Integrity and Efficiency. 

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ΔF I NDING S 

 FINDINGS

Some marketing materials in our sample lacked 

CMS-required information concerning 

limitations to prescription drug benefits 

Prior to January 1, 2006, MA 

plans offering prescription drug 

coverage provided a benefit 

unavailable through traditional fee-for-service Medicare. To ensure 

that beneficiaries understand the true benefits and limitations of a 

plan’s prescription drug benefit, CMS requires that plans include 

several types of information in their marketing materials when they 

refer to prescription drug coverage.12 

Some marketing materials for MA plans offering drug coverage omitted 

required information concerning prescription drug benefit formularies 

(see Table 1). Specifically, in our sample, 55 percent of summaries of 

benefits for these plans did not state that the formulary contents are 

subject to change without advance notice. Because the formulary 

represents the list of drugs a plan covers, beneficiaries should 

understand these restrictions on their drug coverage. For this reason, 

CMS requires plans to inform beneficiaries that the plan uses a 

formulary, that formulary contents can change at any time, and that 

beneficiaries can appeal if they have complaints about the formulary. 

Table 1. Missing Information Concerning Prescription Drug Formularies 

CMS Requirement 

Materials Not Meeting 

This Requirement* 

Summaries of benefits must state that formulary contents are subject to 

change without advance notice. 

55% 

(12 out of 22) 

Evidence of coverage documents must specify that beneficiaries can use the 

appeals process to get drugs added to the formulary or to appeal a decision 

not to cover a particular drug. 

18% 

(4 out of 22) 

*Denominators equal the number of materials for plans that use a formulary for prescription drug benefits. 

Source: Office of Inspector General analysis of MA plan marketing materials, 2005. 

Additionally, to ensure that beneficiaries understand the full costs and 

restrictions of a prescription drug benefit, CMS requires that 

advertising materials identify any drug coverage limitations and the 

amount of any copayments, as well as inform beneficiaries if the benefit 

is restricted to a formulary.13 However, 10 percent of advertisements in 

our sample omitted required information concerning coverage 

limitations on prescription drug benefits (see Table 2). 

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F I NDING S 

Table 2. Missing References to Coverage Limitations 

CMS Requirement 

Materials Not Meeting 

This Requirement* 

Advertisements must identify any coverage limitations when referring to 

prescription drug benefits. 

10% 

(18 out of 179) 

Sales brochures for plans with prescription drug benefits must identify the 

amount of any copayments for prescription drugs. 

82% 

(9 out of 11) 

Sales brochures for plans with prescription drug benefits must inform 

beneficiaries if the prescription drug benefit is limited to a formulary. 

70% 

(7 out of 10) 

 * Denominators equal the total number of marketing materials that require the respective information. 

Source: Office of Inspector General analysis of MA plan marketing materials, 2005. 

Finally, many sales brochures we reviewed also omitted required 

information about prescription drug benefit limitations. It is important 

that sales brochures include this information so that beneficiaries 

understand the amount of drug coverage they receive (see Table 2). One 

sales brochure noted only that “copayments may apply,” without 

explaining how beneficiaries incur these costs or providing copayment 

amounts. Moreover, 7 out of 10 sales brochures did not inform 

beneficiaries that the plan’s prescription drug benefit was limited to a 

formulary. 

Some marketing materials in our sample lacked 

elements required by CMS to ensure that 

beneficiaries can access plan information 

Some marketing materials omitted operating hours and contact information 

CMS requires that each plan’s marketing materials include complete 

contact information, including operating hours for phone numbers.14 

Listing this contact information ensures that beneficiaries know how to 

obtain any additional information they need to make informed plan 

selections. Yet, 52 percent of advertisements did not provide operating 

hours for their customer service numbers (see Table 3). 

Additionally, 67 percent of summaries of benefits and 8 percent of 

evidence of coverage documents did not include the operating hours for 

1-800-MEDICARE (see Table 3). Whenever enrollment materials list 

1-800-MEDICARE, the manual directs materials to state that this 

phone number operates 24 hours a day, 7 days a week, because this 

represents an additional resource for beneficiary information.15 In 

contrast, many MA plans operate customer service phone numbers only 

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F I NDING S 

on weekdays during business hours. Because 1-800-MEDICARE can 

provide beneficiaries with additional information on MA plans, CMS 

directs plans to include language identifying 1-800-MEDICARE and its 

operating hours in the template MA plans use to develop summaries of 

benefits. Because plans create sections of their summaries of benefits 

directly from CMS’s HPMS system, it is unclear why HPMS does not 

automatically include 1-800-MEDICARE’s operating hours in these 

sections.16 

Table 3. Missing Contact Information in MA Marketing Materials 

CMS Requirement 

Materials Not Meeting 

This Requirement 

Advertisements that provide customer service phone numbers must list 

operating hours for these services. 

52% 

(146 out of 279*) 

Summaries of benefits must state that 1-800-MEDICARE operates 24 

hours a day, 7 days a week if they provide this phone number. 

67% 

(24 out of 36) 

Evidence of coverage documents must state that 1-800-MEDICARE 

operates 24 hours a day, 7 days a week if they provide this phone number. 

8% 

(3 out of 36) 

*Denominator equals the number of advertisements that provide customer service phone numbers. 

Source: Office of Inspector General analysis of MA plan marketing materials, 2005. 

Some marketing materials lacked information for beneficiaries with special 

needs 

CMS requires marketing materials to include language to ensure that 

beneficiaries with special needs have full access to plan information (see 

Table 4).17 CMS also requires MA plans to present the text telephone 

number for individuals with hearing impairments, known as a TTY 

phone number, in the same font size and style as other customer service 

numbers.18 Ten percent of advertisements did not present TTY phone 

numbers in the same font size and style as other phone numbers. Eight 

percent of advertisements failed to include this number at all. 

CMS requires advertisements that invite beneficiaries to attend sales 

presentations to provide contact information for accommodating persons 

with special needs.19 Sales presentations offer beneficiaries more 

detailed plan information than advertisements provide. Twenty-eight 

percent of these advertisements failed to include information about 

special accommodations (see Table 4). For example, one advertisement 

simply invited “qualified Medicare beneficiaries” to attend a sales 

presentation—language that did not indicate how beneficiaries with 

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F I NDING S 

special needs can access these opportunities for learning about plans 

and interacting with sales representatives. 

Table 4. Omitted Contact Information for Beneficiaries With Special Needs 

CMS Requirement 

Materials Not Meeting 

This Requirement 

Advertisements must provide TTY phone numbers whenever other 

customer service numbers are presented. 

8% 

(23 out of 275*) 

Advertisements must present TTY phone numbers in the same font size 

and style as other phone numbers. 

10% 

(25 out of 252*) 

Advertisements that invite beneficiaries to sales presentations must 

indicate how to make arrangements for individuals with special needs. 

28% 

(34 out of 120*) 

Evidence of coverage documents must indicate that information in the 

document is available in other formats. 

39% 

(14 out of 36) 

* Denominators equal the total number of marketing materials that require the respective information. 

Source: Office of Inspector General analysis of MA plan marketing materials, 2005. 

Thirty-nine percent of evidence of coverage documents did not indicate 

that individuals could obtain the document in other formats (see 

Table 4). Moreover, simply including a statement about the availability 

of other formats does not ensure that beneficiaries will understand what 

options exist. For example, three of these documents noted only that 

the document was “available in other formats.” However, 19 evidence of 

coverage documents (53 percent) indicated which other formats were 

available—for example, large print, audio tape, and non-English 

language. Statements indicating exactly which formats are available 

are likely to be more useful to beneficiaries than statements that refer 

to other formats but do not identify them. 

Some marketing materials in our sample did not 

clearly convey information concerning other 

aspects of MA plan coverage 

When describing plan coverage, 28 percent of summaries of benefits did not 

define “benefit period” as CMS requires 

CMS requires summaries of benefits to define the term “benefit period” 

in a footnote when using it to describe the plan (see Table 5).20 A 

benefit period defines a specific period of health care and a beneficiary’s 

coverage during that period.21 To fully understand the details of a 

plan’s coverage, beneficiaries must understand such coverage terms. 

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F I NDING S 

CMS’s HPMS system generates a footnote for the summary of benefits 

that defines benefit period when describing original Medicare benefits. 

The manual specifies that plans must add this footnote when using the 

term to describe what the MA plan provides. 

Thirty-six percent of summaries of benefits did not communicate the risk of 

nonrenewal as required by CMS 

CMS reviews MA organizations annually and may choose not to renew 

an MA organization’s contract for the following year. CMS requires MA 

organizations to include a statement in their summary of benefits 

informing beneficiaries of this annual review and renewal process to 

make beneficiaries aware that their plan may not be available in future 

years.22 Of the summaries of benefits we reviewed, 36 percent did not 

state that CMS renews MA organizations’ contracts annually and that 

nonrenewal could result in the termination of the beneficiaries’ 

enrollment in the plan (see Table 5). While CMS declined to renew only 

3 plan contracts in January 2005, the number of plans participating in 

Medicare has fluctuated considerably, from a high of 346 plans in 1998 

to a low of 151 plans in 2003.23 

Table 5. Omitted Information About Plan Coverage 

CMS Requirement for Summaries of Benefits Materials Not Meeting 

This Requirement 

Include a footnote definition of the term “benefit period” when using this 

term to describe the health plan. 

28% 

(9 out of 32*) 

State that the plan’s contract is renewed annually and nonrenewal could 

result in loss of coverage. 

36% 

(13 out of 36) 

*Denominator equals the number of summaries of benefits that use this term. 

Source: Office of Inspector General analysis of MA Plan Marketing Materials, 2005. 

Enrollment forms and evidence of coverage documents were not 

reader-friendly 

The manual encourages MA organizations to develop reader-friendly 

marketing materials so that beneficiaries are able to fully understand 

plans’ benefits and conditions.24 For this study, we defined 

reader-friendly materials as those that use clear language and avoid 

technical language (see Text Box 1). Eleven percent of enrollment forms 

and evidence of coverage documents contained unclear language. 

Additionally, 19 percent of enrollment forms and 14 percent of evidence 

of coverage documents included technical language. We found unclear 

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F I NDING S 

and technical language most often in enrollment forms and evidence of 

coverage documents (see Table 6 on page 11). 

Text Box 1. Examples of Unclear and Technical Language 

Unclear language 

“Services rendered without prior authorization of my Plan contracting 

primary care physician (PCP), except for emergency services anywhere 

in the world or urgently needed services outside the Plan service area (or 

under unusual and extraordinary circumstances, provided when I am in 

the service area, but my contracting medical group is temporarily 

unavailable or inaccessible), will not be reimbursed by Plan or Medicare.” 

(Evidence of coverage) 

“I agree and understand that any and all disputes, including claims 

relating to the delivery of services under the plan and claims of medical 

malpractice (that is as to whether any medical services rendered under 

the health plan were unnecessary or unauthorized or were improperly, 

negligently or incompetently rendered), except for claims subject to 

ERISA, between myself and my dependents enrolled in the plan 

(including any heirs or assigns) and HMO, or any of its parents, 

subsidiaries or affiliates shall be determined by submission to binding 

arbitration. Any such dispute will not be resolved by a lawsuit or resort to 

court process, except as the Federal Arbitration Act provides for judicial 

review of arbitration proceedings.” (Enrollment Form) 

Technical language 

“Termination of Coverage will not terminate coverage of Medicare Part A 

inpatient Covered Health Services under the Plan if, on the date of 

termination, you are Confined as an inpatient in a Hospital, a 

rehabilitation Hospital, a distinct part of a Hospital used as an inpatient 

rehabilitation unit, or a long-term care facility or Hospital as covered 

under Section 6.B.2 of this EOC, and your place of Confinement is paid 

by CMS on a prospective payment system basis (per stay basis.)” 

(Evidence of coverage) 

Source: Office of Inspector General analysis of MA Plan Marketing Materials, 2005. 

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F I NDING S 

Table 6. Unclear and Technical Language in Marketing Materials 

Type of Material Unclear Language Technical Language 

Enrollment Form 11% 

(4 out of 36) 

19% 

(7 out of 36) 

Evidence of Coverage 11% 

(4 out of 36) 

14% 

(5 out of 36) 

Summary of Benefits 3% 

(1 out of 36) 

0% 

(0 out of 36) 

Advertisement 0% 

(0 out of 281) 

1% 

(3 out of 281) 

Sales Brochure 0% 

(0 out of 26) 

0% 

(0 out of 26) 

Source: Office of Inspector General analysis of MA Plan Marketing Materials, 2005. 

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Δ CONCLUSION 

Our review found that some Medicare Advantage marketing materials 

lacked CMS-required information essential for beneficiaries to make 

informed plan choices. Missing information concerned prescription drug 

benefit limitations and details that convey how beneficiaries can access 

plan information. Furthermore, some marketing materials described 

aspects of plan coverage using unclear and technical language. 

CMS’s continued diligence in reviewing marketing materials is 

essential. CMS will also need to ensure consistency between its HPMS 

system and its requirements for marketing materials. We will continue 

to monitor marketing materials for Medicare Advantage plans and for 

Medicare Part D plans, as well as CMS’s oversight of the review process 

for these materials. 

AGENCY COMMENTS 

CMS concurred with our findings, stating that the report will help it 

improve its marketing review process. CMS also highlighted 

enhancements it made to the review process for Medicare Advantage 

and Medicare Part D plan marketing materials to improve their 

consistency. These include a consolidated review of Medicare 

Advantage and Medicare Part D plan marketing materials by CMS 

regional office staff, a contractor review of the consistency of marketing 

materials, and new features in its HPMS system to assist in monitoring 

the review process. For the full text of CMS’s comments, see 

Appendix B. 

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Δ ENDNOTE S 

1 70 Federal Register 4588, 4591 (January 28, 2005). 

2 The remaining 15 percent of Medicare beneficiaries are enrolled in 

a variety of Medicare programs, such as cost-based plans, 

demonstration projects, preferred provider organizations, private 

fee-for-service plans, and provider-sponsored organizations. In 

addition, the Program of All-Inclusive Care for the Elderly is a 

capitated managed care model that is not part of the MA program. 

3 CMS. “Medicare Managed Care Manual,” Chapter 3, “Marketing,” 

p. 61. 

4 42 C.F.R. § 422.80. 

5 42 C.F.R. § 422.80(c)(1). 

6 42 C.F.R. § 422.80(e)(1). 

7 CMS. “Medicare Managed Care Manual,” Chapter 3, “Marketing,” 

p. 3. 

8 CMS. “Medicare Part D Plan Marketing Guidelines,” August 15, 

2005. 

9 CMS. “Medicare Managed Care Manual,” Chapter 3, “Marketing,” 

pp. 47-48. 

10 Department of Health and Human Services, OIG, Office of 

Evaluation and Inspections (OEI), Final Reports, “Medicare 

Managed Care: Goals of National Marketing Guide,” OEI-03-98-

00270; and “Medicare Managed Care: 1998 Marketing Materials,” 

OEI-03-98-00271, February 2000. 

11 The MA organization carries the actual contract with CMS; in 

CMS’s system this is referred to as the “H#,” which is analogous to 

a provider number for a hospital. Within that H#, an MA 

organization may offer plans for different geographic areas 

(typically counties), different benefit packages, or different 

premium arrangements. 

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12 CMS. “Medicare Managed Care Manual,” Chapter 3, 

“Marketing,” pp. 22, 32, and 47-48. 

13 Ibid., pp. 47-48. 

14 Ibid., pp. 16-17, 20, 38, and 45. 

15 Ibid., pp. 16-17, 20, and 38. 

16 Ibid., p. 62. 

17 Ibid., pp. 16 and 61. 

18 Ibid., pp. 17, 21, 34, and 38. 

19 Ibid., p. 16. 

20 Ibid., p. 63. 

21 Ibid., p. 63. CMS requires plans to include the following 

definition for a benefit period: 

A benefit period begins the day you go to the hospital or 

skilled nursing facility. The benefit period ends when you 

have not received hospital or skilled nursing facility care for 

60 days in a row. If you go into the hospital after one 

benefit period has ended, a new benefit period begins. You 

must pay the inpatient hospital deductible for each benefit 

period. There is no limit to the number of benefit periods 

you can have. 

22 Ibid., p. 23. 

23 Medicare Health Plan Tracker; Medicare Advantage Fact Sheet. 

Henry J. Kaiser Family Foundation. September 2005, available 

online at www.kff.org. 

24 CMS. “Medicare Managed Care Manual,” Chapter 3, p. 3. 

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Δ APPENDIX A 

METHODOLOGY 

We obtained marketing materials from a random sample of 36 MA plans 

that CMS classifies as health maintenance organizations (HMOs) and 

HMO point of service (HMOPOS) plans.1 We selected these 

organizations in an unbiased random sample that is representative of 

organizations that vary by their number of plans and of plans that vary 

by enrollment size. While our sample was randomly drawn, it was not 

large enough to produce reliable estimates of the population of plans. 

Selection of MA plans. The MA plans we examined were from MA 

organizations that met two criteria. First, the MA organizations must 

have been in operation prior to January 1, 2004. We used that date to 

ensure that the MA organization had at least 1 year of operational 

experience prior to the timeframe for which we requested materials. 

Second, the MA organization must have enrolled new members in 

December 2004. This criterion ensured that the plan continued to be an 

active contractor in the MA program at the time we sampled. 

From these criteria, we obtained a population of 132 MA organizations 

from CMS’s Health Plan Management System. After consulting with 

other branches of OIG, we reduced the number under consideration to 

130 MA organizations. 

Each MA organization may offer more than one plan.2 Our starting 

population of 130 MA organizations included 659 plans. Some 

organizations have 20 or more plans, while others have only one. We 

selected only one plan from each organization because organizations 

may use similar marketing materials for all their MA plans. 

Due to sample size limitations, the variability in the number of plans 

offered by MA organizations, the variability in the enrollment size 

among plans within MA organizations, and our desire to have a sample 

that was representative of the population, we used the following 

sampling strategy. First, we eliminated from our population 146 plans 

1 The HMOPOS plans are point-of-service plans. HMOs make up about 94 percent of 

enrollees and plans, and the eight HMOPOS plans make up the remaining 6 percent of 

each. 

2 The MA organization carries the actual contract with CMS; in CMS’s system this is 

referred to as the “H#,” which is analogous to a provider number for a hospital. Within that 

H#, an MA organization may offer plans for different geographic areas (typically counties), 

different benefit packages, or different premium arrangements. 

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APP E N D I X A 

that enrolled fewer than 100 beneficiaries. This left a population of 

513 plans in the 130 MA organizations. 

We grouped the 130 MA organizations into 8 strata by first forming 

4 primary groups based on the number of plans that the MA 

organizations offer. We then subdivided each primary group into two 

subgroups based on enrollment size within the organizations. 

In the first stage of sampling, we randomly selected MA organizations 

within each stratum. In the second stage of sampling, we randomly 

selected one plan from each MA organization selected in the first stage 

of sampling, yielding individual plans with a relatively high enrollment 

and plans with a relatively low enrollment. 

Marketing materials reviewed. We contacted the selected MA 

organizations and asked them to send us the following materials issued 

for the selected plan for the 2005 marketing period, through 

March 1, 2005: 

• Advertising materials 

o Print advertisements published in newspapers 

o Direct mail advertisements 

o Scripts for radio and television advertisements 

• Enrollment materials 

o Sales brochures/kits 

o Enrollment forms/applications 

o Summary of benefits 

o Evidence of coverage 

We received materials from all 36 plans, for a total of 415 pieces. For 

each plan, we received one enrollment form, one summary of benefits, 

and one evidence of coverage document. We also received a total of 

281 advertisements and 26 sales brochures from the 36 plans. 

Review guides. We developed and used five review guides, one for each 

type of material. Multiple guides were necessary because requirements 

governing what must appear in the different types of materials vary. 

We based these review guides on requirements specified in CMS’s 

Medicare Managed Care Manual, Chapter 3, “Marketing.” 

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APP E N D I X A 

In addition to determining whether the marketing materials met CMS’s 

requirements, we included two additional questions on each review 

instrument to assess whether the material was reader-friendly: 

• Is this piece clear or confusing? 

• Does this piece contain technical language or jargon? 

For our purposes we defined a clear piece as one in which the meaning 

of all the text is obvious and not misleading. We define jargon as: 

• Technical language (i.e., words, terms, phrases, and acronyms 

specific to a certain field) and 

• Sentences with strings of big words, overblown phrases, 

“-izing” words (e.g., finalizing, utilizing), invented words (e.g., 

signage), legalese, or bureaucratic language. 

We recognize that determining whether marketing materials are 

reader-friendly is a subjective process. These criteria provided a way of 

looking at the materials systematically. 

CMS Regional Office Interviews 

To learn more about the marketing material review process, we 

interviewed staff from four CMS regional offices that are responsible for 

overseeing large numbers of MA plans: Atlanta, Chicago, San 

Francisco, and Seattle. Our interviews focused on the offices’ reviews of 

marketing materials and barriers to the review process. 

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ΔAPP E N D I X ~ A 

 APPENDIX B 

Agency comments 

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APP E N D I X B 

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APP E N D I X B 

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APP E N D I X B 

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ΔAPP E N D I X ~ A 

 ACKNOWLEDGMENTS 

This report was prepared under the direction of Joyce M. Greenleaf, 

Regional Inspector General for Evaluation and Inspections in the 

Boston regional office, and Russell W. Hereford, Deputy Regional 

Inspector General. Other principal Office of Evaluation and Inspections 

staff who contributed include: 

Maria E. Maddaloni, Team Leader 

Rosemary Borck, Program Analyst 

Benjamin T. Mahdi, Intern 

Linda B. Abbott, Program Specialist 

Barbara Tedesco, Mathematical Statistician 

Kevin Farber, Mathematical Statistician 

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