Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

JUNE GIBBS BROWN 

Inspector General 

FEBRUARY 2000 

OEI-03-98-00271 

MEDICARE MANAGED CARE 

1998 Marketing Materials 
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 
EXECUTIVE SUMMARY 

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 Guide’s 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. 

1998 Marketing Materials 1 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. 

1998 Marketing Materials 2 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 HCFA’s comments. We believe the agency’s 

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 HCFA’s 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. 

1998 Marketing Materials 3 OEI-03-98-00271 
TABLE OF CONTENTS 

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 Guide’s Language Chart in 1998 ....................... 16

B: OIG’s Methods for Reviewing Marketing Materials ......................... 22

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

1998 Marketing Materials 4 OEI-03-98-00271 
INTRODUCTION 

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; copayment 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. 

1998 Marketing Materials 5 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 HCFA’s 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/Can’t 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 HCFA’s 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 time–on average–is 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 plan’s Medicare contract, and accurately describe benefits. 

Consequently, the review of materials can be extremely complex to perform, requiring 

1998 Marketing Materials 6 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 

program’s 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 

1998 Marketing Materials 7 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/Can’t 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 Guide’s language chart is in Appendix A. 

This study was conducted in accordance with the Quality Standards for Inspections issued 

by the President’s Council on Integrity and Efficiency. 

1998 Marketing Materials 8 OEI-03-98-00271 
FINDINGS 

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/Can’t 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 

1998 Marketing Materials 9 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 

Type of Marketing 

Materials Information That Must Be Conveyed 

Materials with 

Problems 

Percentage of 

Sales brochures Explanation of difference between managed care and fee-for-service 100% 

Subscriber agreements Appeal procedures 90% 

Subscriber agreements and 

member handbooks 

General terms of contract between plan and Medicare program 67% 

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 

sales brochures 

All beneficiaries (except those with end stage renal disease or in 

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 

advertisement’s 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. 

1998 Marketing Materials 10 OEI-03-98-00271 
“Unlimited maximum on generic prescriptions

after reaching $1,500 limit.”

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 

Contracted providers after receiving the 

Health Services authorized by the original 

Referral are Covered if you obtain a new 

Referral from your Primary Care Physician 

before receiving such Health Services.” 

(Subscriber agreement) 

“All services and 

benefits for care and 

conditions within 

each of the following 

classifications shall be 

excluded from 

coverage under this 

plan except such 

services as may be 

specifically provided.” 

(Summary of benefits) 

“Unlimited maximum on generic prescriptions 

after reaching $1,500 limit.” (Advertisement) 

1998 Marketing Materials 11 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-OFAREA URGENT 

CARE COVERAGE” 

(ADVERTISEMENT) 

“...capitation, case rates, 

fee-for service and 

incentive payments,” 

(Member handbook) 

“supplemental 

charge maximum” 

(Sales brochure) 

“stop loss protection” 

“utilization management services” 

“subrogation” 

(Subscriber agreement) 

“Medical GP 

name” 

(Application form) 

“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. 

1998 Marketing Materials 12 OEI-03-98-00271 
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 data on marketingmaterial 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. 

1998 Marketing Materials 13 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 agency’s 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 agency’s 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. 

1998 Marketing Materials 14 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 HCFA’s comments. We believe the agency’s 

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 HCFA’s 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. 

1998 Marketing Materials 15 OEI-03-98-00271 
APPENDIX A 

National Marketing Guide’s Language Chart in 1998 

Marketing Language: “Must Use/Can’t 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 

use (name of plan) 

(contracting, affiliated, 

or name of plan 

participating) providers” 

• “Plan available to all 

Medicare beneficiaries” 

MEDIA: All except 

outdoor advertising. 

*Outdoor advertising has 

the option of excluding this 

topic. 

* See definition of outdoor 

advertising on page 124. 

• "Participating 

providers" unless you 

use plan name 

• Enrolled members 

“must use (name of 

plan) (contracting, 

affiliated, or name 

of plan 

providers” 

participating) 

HCFA requires 

lock-in for all 

media to inform 

beneficiaries of 

managed care 

Because of the 

messages and the 

nature of outdoor 

advertising, this 

topic does not 

apply to outdoor 

requirement. 

length of the 

advertising. 

Quality* • Superlatives (e.g. 

highest, best) 

• Unsubstantiated 

comparisons 

• Qualified 

superlatives (e.g. 

some of the 

highest) or 

among the best, 

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 

Quality is not a 

required topic in 

materials. 

marketing 

* HCFA has the discretion to disapprove language based on site visit reviews identifying substantial deficiencies in plan 

operation. 

1998 Marketing Materials 16 OEI-03-98-00271 
APPENDIX A 

Subject Must Use Can't Use Can Use Reason 

Premiums/ 

Costs 

• If a plan premium is 

mentioned, it must be 

accompanied by a 

statement that 

beneficiaries must 

continue to pay Part B 

premium or Medicare 

premium. 

MEDIA: Print 

• TV-Part B caveat must 

be flashed in TV safe 

range or mentioned in 

narration. 

• "No premium" 

• "No premiums or 

deductibles" 

• "Free" 

The following may be used. 

• "No plan premium." 

• "Plan premium equals 

_______" 

• $0 plan premium 

• "At no extra cost to you" 

specific benefit 

• "No plan premiums or 

deductibles" 

but only if referring to a 

• "No premiums or 

deductibles (you must 

continue to pay the 

Medicare Part B 

premium)" 

• "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. 

• Materials must 

disclose that 

beneficiaries 

must continue to 

pay the Part B 

premium and 

continue their 

Medicare Part B 

enrolled in the 

Because of the 

length of the 

HMO. 

nature of outdoor 

advertising, this 

topic does not 

apply to outdoor 

advertising. 

coverage while 

messages and the 

Testimonials • Content must comply 

with HCFA marketing 

guidelines, including 

statements by 

members. 

• Cannot have nonmembers say 

he/she belongs. 

(Can use actors, 

but they cannot 

say they belong to 

the plan.) 

• Speaker must 

identify specific 

health plan 

membership 

MEDIA: All 

1998 Marketing Materials 17 OEI-03-98-00271 
APPENDIX A 

Subject Must Use Can't Use Can Use Reason 

Contract with the 

Government 

• Must include one of 

the phrases from the 

can use column 

MEDIA: All except 

outdoor. Outdoor 

advertising has the 

option of excluding this 

topic. 

• "Recommended or 

endorsed by Medicare" 

has a unique or custom 

arrangement with the 

government, e.g.: 

-- "Special contract 

with Medicare" 

• Cannot imply that plan 

-- "Special plan for 

Medicare 

beneficiaries" 

• "HMO with a 

Medicare contract" 

qualified HMO 

with a Medicare 

contract" 

• "A federally 

• "A federally 

qualified Medicare 

contracting HMO" 

• "Medicare 

approved HMO" 

MEDIA: All 

Because of the 

length of the 

messages and the 

advertising, this 

topic does not 

apply to outdoor 

advertising. 

nature of outdoor 

Physicians and 

Other Health 

Care Providers 

• If the number of 

physicians and other 

health care 

providers is used, it 

must include only 

those available to 

Medicare 

beneficiaries 

MEDIA: TV, radio, 

outdoor 

• If the number of 

physicians and other 

health care providers 

is used, it must 

include only 

providers available 

to Medicare 

beneficiaries. If a 

total number is used 

it must separately 

delineate the number 

of primary care 

providers and 

specialists included. 

MEDIA: Print and 

direct mail 

• Implication that 

providers are 

available exclusively 

through the particular 

HMO unless such a 

statement is true 

• "Participating 

providers" unless you 

use plan name 

• "(Plan's name) 

participating 

providers" 

• "Network" 

providers 

• "Contracting" 

• "Affiliated" 

providers 

• Number of 

providers should 

be same total 

number of 

Medicare 

providers 

MEDIA: All 

providers 

• Do not use the 

word 

“participating” 

when referring 

to plan 

providers 

(unless you use 

plan name), 

with a 

participation 

with Medicare. 

Plans should 

either use 

“contracting” 

or “plan name” 

when referring 

to plan 

providers. 

since it could 

be confused 

agreement 

Limited Open 

Enrollment 

Period 

• Describe open 

enrollment period 

if open enrollment 

is not continuous 

MEDIA: All 

1998 Marketing Materials 18 OEI-03-98-00271 
APPENDIX A 

Subject Must Use Can't Use Can Use Reason 

Eligibility • Must indicate 

that all 

Medicare 

beneficiaries 

may apply. 

• "No health 

screening" unless 

specific mention is 

made of ESRD and 

hospice 

• "Seniors" unless 

term appears with 

"and all other 

Medicare eligibles" 

• "Plan designed 

especially for 

seniors" 

• "Senior plan" unless 

part of plan name 

• "Individuals age 65 

and over" 

• "You must have 

Parts A and B of 

Medicare" 

• "Anyone with 

Medicare may apply" 

• "Medicare entitled" 

for Medicare" 

• "Individuals on or 

entitled to Medicare" 

• "Medicare 

beneficiaries" 

• "People with or on 

• "Seniors and all other 

• "No physicals 

required" 

• "Individuals eligible 

• "Medicare enrollees" 

Medicare" 

Medicare-eligibles" 

• "No health screening" 

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 

• Since all Medicare 

beneficiaries may 

enroll in Medicarecontracting HMOs, 

you may not refer to 

plan” (unless you 

refer to it as part of 

the plan name). The 

term “senior plan” 

beneficiaries may not 

enroll. 

• Medicare Part A is 

not a requirement for 

Medicare-contracting 

HMOs. Plans may 

under Part A to 

purchase equivalent 

coverage directly 

your plan as a “senior 

enrollment in 

require beneficiaries 

from the plan 

implies that disabled 

who are not covered 

Claims 

Forms/ 

Paperwork 

• "No paperwork" 

• "No claims or 

paperwork/complicat 

ed paperwork" 

• "No claims forms" 

• "Virtually no 

paperwork" 

• "No paperwork when 

using plan providers" 

• "Hardly any 

paperwork" 

MEDIA: All 

• Members may be 

required to submit 

bills or claims 

documentation when 

using out-of-plan 

providers. 

1998 Marketing Materials 19 OEI-03-98-00271 
APPENDIX A 

Subject Must Use Can't Use Can Use Reason 

Benefits 

a. Comparison 

b. Limitations 

c. Prescription 

Drugs 

• If premiums and 

• If prescription drugs 

are mentioned and 

benefits vary by 

geographic area, must 

clearly state this or 

must clearly state 

geographic area in 

which differing 

premiums and 

benefits are 

applicable. 

• If only benefits vary, 

clearly state 

geographic area in 

which benefits are 

applicable. 

MEDIA: All 

have limitations, 

must say: 

• limited drug 

coverage; 

• drug coverage 

benefits subject to 

limitations; or 

• up to xxx annual 

limit or xxx limit 

per year and other 

limits and 

restrictions may 

apply. 

• Minimal copays 

may apply 

• At no extra cost 

to you or free, if 

copays apply 

• "We cover 

prescription 

drugs" unless 

accompanied by 

reference to 

limitation 

• "Prescription 

drug coverage" 

unless 

accompanied by 

reference to 

limitation 

• "Premiums and benefits 

• State exact dollar amount 

• State which benefits are 

subject to limitations 

may vary by county" or 

"These benefits apply to 

the following counties" 

• "Except for ________ 

county" 

MEDIA: All 

• Fully disclose dollar 

amount of copayments and 

annual limit 

• If limited, you must say so 

• Limited drug coverage 

with xx copayments and 

xxx annual limit 

• "Prescriptions must be 

filled at contracting or plan 

limit on any benefit 

• "Limitations and 

restrictions may apply" 

• "Minimal copayments will 

apply" 

• "Minimal copayments may 

vary by county” 

affiliated pharmacies." 

MEDIA: All 

• Premiums, 

benefits and /or 

copayment 

amounts may 

vary by county 

within a given 

service area. 

This must be 

clearly conveyed 

in all marketing 

materials. 

• If benefits are 

specified within 

the piece, any 

applicable 

copayment 

should be stated 

or you may 

include the 

general 

statement as 

shown. 

Prescription 

drugs are an 

important 

benefit that 

must be 

adequately 

described. Any 

dollar limits 

must be clearly 

conveyed. 

1998 Marketing Materials 20 OEI-03-98-00271 
APPENDIX A 

Subject Must Use Can't Use Can Use Reason 

Definitions • "Life threatening" 

• “True emergency” 

• Emergency --

current HCFA policy. 

definition as stated in 

• Urgent -- definition 

as stated in current 

HCFA policy. 

MEDIA: Direct mail 

• Emergency criteria 

explained per 

should be 

guidelines rather 

than in the 

commercial 

Medicare 

context. 

Drawings/ 

prizes 

• "Eligible for free 

drawing and prizes" 

MEDIA: Direct mail, 

flyers, print advertising 

• "Eligible for a free 

drawing and prizes 

• "Free drawing 

with no obligation" 

without obligation" 

MEDIA: Direct mail, 

flyers, print advertising. 

• It is a prohibited 

marketing practice 

prizes as an 

inducement to 

to use free gifts and 

enroll. Any 

made available to 

all participants 

gratuity must be 

regardless of 

enrollment. The 

value of any gift 

must be less than 

the nominal 

amount of $10. 

Sales 

presentation 

s 

• "A sales 

representative will be 

present with 

information and 

applications." 

MEDIA: Flyers, 

invitations and print 

advertising 

• "A sales 

representative may 

call." 

MEDIA: Response card 

• A 

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). 

• "A plan 

representative will be 

available to answer 

questions." 

• This phrase must 

be used whenever 

beneficiaries are 

invited to attend a 

group session with 

enrolling those 

individuals 

attending. 

• This phrase must 

be included on any 

response card in 

beneficiary is asked 

telephone number. 

the intent of 

which the 

to provide a 

1998 Marketing Materials 21 OEI-03-98-00271 
APPENDIX B 

OIG’s 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/Can’t use/Can use" language chart, 

1998 Marketing Materials 22 OEI-03-98-00271 
APPENDIX 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. 

1998 Marketing Materials 23 OEI-03-98-00271 
APPENDIX 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: member’s failure to pay plan premium < Letters notifying member that benefits are 

< Letters with plan’s determination of member’s 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 member’s 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 member’s request for < Surveys to determine demographics of plan’s 

information elderly members who are still working 

< Subscriber agreements (contains members’ rights, < Surveys of member satisfaction 

members’ and plan’s responsibilities; covered and < Surveys of member reasons for disenrollment 

non-covered services) < Surveys of member’s health 

< Wellness materials (disease prevention information) 

1998 Marketing Materials 24 OEI-03-98-00271 
APPENDIX C 

1998 Marketing Materials 25 OEI-03-98-00271 
APPENDIX C 

1998 Marketing Materials 26 OEI-03-98-00271 
APPENDIX C 

1998 Marketing Materials 27 OEI-03-98-00271 
APPENDIX C 

1998 Marketing Materials 28 OEI-03-98-00271 
APPENDIX C 

1998 Marketing Materials 29 OEI-03-98-00271 
APPENDIX C 

1998 Marketing Materials 30 OEI-03-98-00271 
APPENDIX B APPENDIX C

1998 Marketing Materials 31 OEI-03-98-00271 
APPENDIX C 

1998 Marketing Materials 32 OEI-03-98-00271