THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, August 3, 1995 TAG: 9508030466
SECTION: LOCAL PAGE: B3 EDITION: FINAL
SOURCE: BY MARIE JOYCE, STAFF WRITER
LENGTH: Medium: 52 lines
Responding to complaints about a Maryland insurance company's aggressive sales techniques, state officials have written stricter rules for marketing to Medicaid users in poor neighborhoods.
The rules, which go into effect this week, are designed to stop practices like getting referrals from neighbors or family, approaching people on the street, or going door-to-door in neighborhoods.
Written into new contracts between the state and the insurance companies, the rules set down a brief list of sales techniques that are permitted - things like mailings, television and newspaper advertising, and community ``health fairs.''
Any other marketing methods must get approval from the state.
Insurance companies are rushing to sign up poor people for a new health maintanence organization for people on Medicaid, the government health insurance program for the poor.
The HMO is an experiment to privatize the system, to see if the managed care techniques that have reduced health costs for the middle class can save welfare money. Hampton Roads will be a test case for the entire state.
Four insurance companies have been approved to administer the plan locally. These companies have till the end of the year to sign up as many people as possible. After that, people who haven't picked a company will be assigned to one.
So far, Maryland company Optimum Choice has been the most successful contender, signing up about 21,000 people in Hampton Roads, more than twice the number of all the other companies combined.
But Optimum Choice, owned by Mid Atlantic Medical Services, also attracted complaints about their practices, like the door-to-door marketing.
The company stopped much of this after discussions with state officials.
``They've been very aggressive'' about fixing problems, said Thomas McGraw, who heads the Medicaid managed care program for the state Medical Assistance Services department.
``We would prefer not to have the state upset with our marketing practices,'' said Paul Dillon, senior vice president and treasurer for Mid Atlantic.
``We'll live by the letter of those codes.''
The new rules lay out penalties for violations. Offenders could be fined, have enrolled members taken away from them or have restrictions placed on the number of people they enroll. by CNB