Federal regulators have fined Clover Health $106,095 for misleading consumers about their out-of-network benefits.
Founded in 2012, Clover Health sells Medicare Advantage products in New Jersey. The health insurance startup provides enrollees with out-of-network benefits and lets them pay nothing for monthly premiums, copayments and generic prescriptions.
According to a May 26 notice from CMS, Clover engaged in marketing activities that misled or confused potential enrollees about their ability to always receive covered services from any out-of-network provider. Specifically, Clover's materials incorrectly stated that out-of-network providers participating in the Medicare program are obligated to accept Clover enrollees. CMS said it initially notified Clover executives of the misleading language Nov. 12, 2015.
At an insurance event Dec. 5, Clover agents/brokers incorrectly told a secret shopper sent by CMS that out-of-network providers must accept any beneficiary who is enrolled in Clover's plan. CMS subsequently reviewed the company's website and discovered additional marketing violations, such as failing to display CMS' star rating of the plan.
Clover didn't correct the marketing language and other deficiencies until Dec. 18, according to CMS.
In January and February, CMS said it received a high volume of complaints from new Clover enrollees who were denied services by out-of-network providers after being told by Clover that they could see any provider they wished.
Clover has until July 26 to request a hearing to appeal CMS' determination and the fine imposed.