The Federal Trade Commission seems to be cracking down on the healthcare industry: it sent warning letters last week to 25 companies that market or generate sales leads for healthcare plans over potentially deceptive marketing practices. This comes after the agency sent warning letters to 24 healthcare services companies in early October over price transparency.
The second round of letters was sent to companies that market Affordable Care Act Marketplace plans. The FTC did not list the names of the companies.
“Making healthcare more transparent and affordable is a top priority for the FTC,” said Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, in a statement. “Americans experiencing rising healthcare costs should not also have to worry about whether a healthcare plan or program is what it claims to be. … Today’s letters remind companies that open enrollment is not an invitation to misrepresent what their plans actually cover.”
The FTC outlined several practices that may violate the FTC Act, which prohibits deceptive or unfair acts or practices in commerce, including:
- Misrepresenting the benefits in a healthcare-related product
- Misrepresenting that a healthcare plan is major or comprehensive medical health insurance when it is not
- Misrepresenting the costs of a plan
- Incorrectly claiming that consumers will receive free offers or other incentives if they enroll in a plan
“Based on information collected by FTC staff and the Commission’s enforcement experience in this area, we have identified a pattern of deceptive claims made by marketers or advertisers, including lead generators, of health insurance and healthcare-related products. Such claims have been the subject of consumer complaints,” the FTC said in the letters.
The FTC also gave examples of when it previously acted against marketers for deceptive practices. This includes Top Healthcare Options Insurance Agency, which the FTC alleges falsely represented that limited benefit and medical discount plans were comprehensive health insurance, and Innovative Partners, which the agency alleges impersonated the government and insurance carriers to deceive customers.
The agency noted that the letters are not “intended to reflect an assessment or conclusion by the FTC staff that you or your company have engaged in illegal conduct.” Rather, the FTC is encouraging the companies to conduct a review of their marketing and advertising practices and ensure compliance. This includes paid or other online ads, representations made on websites and social media, and promotional materials.
“This letter is not intended to be an exhaustive list of all laws or rules the FTC enforces, or of all potential violations connected with marketing or advertising, including lead generation, for health insurance and healthcare-related products,” the agency said. “It is your responsibility to ensure compliance with all federal laws, including the FTC Act and other rules enforced by the Commission. FTC staff will continue to actively monitor this market for potentially deceptive or unfair acts or practices and will take enforcement action as warranted.”
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