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March 15, 2004 at 07:00 PM
NU Online News Service, March 15, 2004, 3:49 p.m. EST, New York – Scam artists are gearing up to misuse the new Medicare prescription program.[@@]
Consumer advocates and a state regulator delivered that warning here during the spring meeting of the National Association of Insurance Commissioners, Kansas City, Mo.
The Medicare Prescription Drug, Improvement and Modernization Act of 2003 will start by creating a prescription discount card program. Meeting participants say scam artists are gearing up to mislead consumers who think that they are buying medical insurance discount cards when, in fact, they are buying prescription discount cards.
One prosecutor says there is already abuse in his state, according to Mila Kofman, an NAIC-funded consumer representative and a professor at Georgetown University’s Institute for Health Care Research and Policy. “The people who were shut down for phony insurance companies are getting in to make a quick buck,” she says.
In Florida, according to Kevin McCarty, Florida’s director of insurance regulation, misleading advertising is leading consumers to believe that they are buying insurance when what they are really purchasing is a discount card. “It is already a huge problem and it will only get much, much worse with the advent of [Medicare] discount cards,” McCarthy says.
Seniors are losing credible coverage when they go to these plans, McCarty adds.
A bill in the Florida Legislature, H.B. 1629, could help curb the problem, and Tom Gallagher, the state chief financial officer, intends to take action to stop such fraud, McCarty says.
In Kansas, regulators could attack MPDIMA discount card program fraud with the state’s unauthorized entities law, according to Sandy Praeger, Kansas commissioner. The problem, she says, is that “since there are no bricks and mortar, by the time the problem reaches our office, [the crooks have] moved on.”
Simply answering consumer questions will be a major job for regulators, says Bonnie Burns, an NAIC-funded consumer representative and representative for California Health Advocates, Scotts Valley, Calif.
