FHP Investigated for Allegations It Is Duping Patients
Federal health officials are reviewing complaints that FHP International Corp., one of the nation’s largest health maintenance organizations, is duping Medicare patients into signing up with the company.
A senior official for the federal Health Care Financing Administration, which regulates Medicare programs, said Friday that complaints about FHP’s Medicare program have been increasing since January.
The complaints are from Medicare recipients who say they have been asked by FHP sales agents visiting their homes to sign papers that they believe are only an acknowledgement that a company representative had been there, said the official, who requested that his name be withheld. But, instead, the signature constitutes enrollment in the company’s Senior Plan, he said.
Nick Franklin, FHP’s vice president of government affairs, said the Fountain Valley-based company is “in full compliance” with the government’s regulations. He said FHP has a good working relationship with the federal agency and would correct any problems that are found.
Enrollment in FHP’s Senior Plan costs nothing, but a person who enrolls unwittingly and then visits his or her regular doctor may be told that the visit will not be paid for by Medicare, the federal official said. As with other health maintenance organizations, FHP enrollees must visit one of the HMO’s doctors.
The federal review began two weeks after three elderly San Fernando Valley women sued FHP for fraud. The suit--filed June 13 in Van Nuys Superior Court--alleges that door-to-door salespersons for FHP claimed to represent Medi-Cal and Medicare and that the women could continue to be cared for by their longtime doctors if they joined the FHP plan.
The suit by Ada Solorzano, 81, and America Rodruguez, 78, both of North Hollywood, and Dolores Morales, 68, of Van Nuys, seeks $25,000 in damages for emotional distress.
The federal official said the lawsuit was one factor that prompted the review. Another factor was that people are dropping out of FHP’s Senior Plan at a “higher (rate) than other HMOs in the area,” sometimes within two to four months, he said.
“That indicates to us that people were unhappy with the program or didn’t realize they were enrolled,” he said.
He declined to specify how many complaints the agency has received. The agency monitors about 150 HMOs nationwide that contract with the government to provide extra benefits to Medicare recipients. He said the agency conducts six to 10 reviews of HMO practices a year.
About one-quarter of FHP’s business is with Medicare recipients. It serves 148,000 seniors in the greater Los Angeles area. It also provides health services to 3,500 employers in California, Utah, Arizona, New Mexico and Guam.
The government has had similar complaints within the past four years about how FHP markets its Senior Plan. Those complaints resulted in the company firing one or two of its sales agents, the official said.
He said there is every reason to believe that FHP will cooperate with the review. If it does not, the company risks losing its contract to serve Medicare patients.
The federal agency said it will not process the company’s applications to expand its Senior Plan service area until the review is completed. FHP had planned to expand its Senior Plan to Ventura County and northern San Diego County this fall.
Enrollees in FHP’s Senior Plan pay no monthly premiums and no deductibles and are partially reimbursed for some prescriptions.
Federal officials plan to visit FHP’s offices in Fountain Valley in mid-July. They will review FHP’s procedures to see if the problem is systemic and will draw up a plan to correct the problem by the end of the month.
Clem Scharwath, FHP’s regional vice president, said FHP’s sales agents are instructed to make it clear to people that the purpose of their home visits is to enroll them. The enrollment form includes eight statements explaining the Senior Plan, with a line for a signature after each. An employee at FHP’s office verifies the enrollment by telephone with the salespeople while they are still in the home, he said.
“Seniors can sometimes get confused or forget after the fact,” Scharwath said.
He said anyone who calls to say they misunderstood the agreement and asks to be removed from the program is allowed to do so at no cost.
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