If you’re shopping for a Medicare Advantage plan, you might be looking for reviews of Clover Health. With Medicare Advantage, also called Medicare Part C, private companies contract with Medicare to provide customers with Medicare Parts A and B benefits and usually prescription drug coverage through a health maintenance organization (HMO), preferred provider organization (PPO), private fee-for-service (PFFS) plan or Medicare medical savings account (MSA) plan. Clover is a PPO that offers a low-premium Medicare Advantage plan where policyholders have no copay for a primary care doctor and a $15 copay for a specialist, and where out-of-network providers are obligated to treat them in emergency situations. They also get extra help managing their health from nurse practitioners and social workers.

Earlier this year, the U.S. Centers for Medicare and Medicaid Services, a division of the U.S. Department of Health and Human Services, fined Clover Health $106,095 for several misleading marketing activities during the 2016 plan year enrollment period that occurred at the end of 2015.

Here’s a look at what Clover offers, why it was fined and how the company's offerings are described in its marketing strategy for 2017’s annual enrollment period, which runs through December 7, 2016.

How Clover Differs from Other Medicare Advantage Plans

Clover is a healthcare technology startup founded in 2014 that is designed to improve patient outcomes and save money through data analysis. In September 2015, Clover told “Fortune” that “in the first half of the year, its members had nearly 50% fewer hospital admissions and 34% fewer hospital re-admissions than the average group of Medicare patients in the New Jersey areas it serves.” Clover uses data it already has as an insurance provider and analyzes patients’ claims and test results to identify potential problems and do something about them to keep patients healthier.

If the company notices, for example, that a patient hasn’t filled an important medication recently, one of its nurse practitioners or social workers might contact the patient and talk to him or her about what’s going on.  Clover aims to save money by keeping its customers out of the hospital and by better managing chronic illnesses such as type 2 diabetes, chronic obstructive pulmonary disease and congestive heart failure.  When the company saves money, it can pass that savings on to consumers in the form of lower premiums.

The company promises free primary care visits, no referrals required to see a specialist, more choices in doctors, prescription and vision coverage, and gym memberships. It says customers will have a personal care team that includes nurse practitioners, medical assistants and others who will visit them at home to check on them between doctor visits.  Customer service representatives are available to help customers choose the right doctor, schedule appointments and secure transportation to those appointments.

Clover’s target market is elderly and low-income patients. For 2017, Clover’s plans are only available in nine New Jersey counties: Bergen, Monmouth, Essex, Mercer, Somerset, Union, Passaic, Hudson and Atlantic.

Why Was Clover Fined?

Clover’s fine from the U.S. Centers for Medicare and Medicaid Services (CMS) was based on several things:

  • falsely claiming that out-of-network providers and facilities that participate in Medicare would be required to accept Clover customers
  • not including on its website all the information enrollees needed to make an informed decision about their Medicare options
  • failing to correct misleading statements after several notifications from CMS and falsely claiming to CMS that it had made all the required changes, which CMS uncovered during a secret shopper operation

According to CMS, Clover didn’t correct the problems until after the open enrollment period ended, and CMS received numerous complaints in January and February from customers who were being denied out-of-network benefits that Clover had promised them. CMS gave customers who complained an opportunity to enroll in a different plan.

CMS also charged Clover with not notifying customers when they were leaving Clover’s website to go to an external website, and with potentially misleading customers about the source of an award the company received.

“Each Medicare patient represents $10K of premium revenue and thus every county that Clover enters is a $100M revenue opportunity – a figure so staggering that it has few parallels today (e.g., Apple, Exxon, AT&T, Verizon),” writes Abhas Gupta, a venture capitalist whose company, Wildcat Venture Partners, provided Series B funding to Clover.

Has Clover Changed Its Marketing?

Based on a thorough examination of the company’s website, Clover appears to have corrected the problems CMS identified last year. The company has several disclaimers at the bottom of each page, one of which states, “Out-of-network/non-contracted providers are under no obligation to treat Clover members, except in emergency situations.” This same statement appears in Clover’s 2017 plan description documents. These documents are written in plain English and contain helpful charts showing each plan’s key features. 

When consumers click on links at Clover’s website that go to other sites, they’ll see a pop-up window that says, “You're now leaving the Clover Health Website. The information you will be accessing is provided by another organization or vendor. If you do not intend to leave our site, please click Cancel.”  

Further, Clover’s website now says that the award the company received from HealthMetrix for “Excellence in Medicare Benefits Value” in 2015 is not endorsed by Medicare.

The company hosts numerous marketing events throughout New  Jersey to gain customers.  Without attending these marketing events in person, we don’t know what the company’s representatives are telling potential customers about its  2017 benefits. What we can examine are the printed materials available at Clover’s website describing plan benefits and instructing health insurance brokers on how to market Clover’s plans.

Perhaps the most compelling evidence of Clover’s apparent commitment to honest marketing is a letter from the company’s chief compliance officer to brokers who sell Clover Health insurance. It says that Clover has implemented new procedures to protect members and comply with CMS rules. These include a secret shopper program conducted by an independent company to make sure agents are representing Clover accurately in sales to consumers; monitoring for a trend of an agent’s customers disenrolling in their Clover insurance, which could indicate that those customers didn’t understand what they were signing up for; and investigation of consumer complaints to CMS.

One statement on the company’s “find a provider” page that might confuse consumers is, “Clover plans are PPOs, which mean you’re covered to see Medicare doctors in and out of our doctor network for medically necessary services. And whether the doctor is in our network or not, you’ll pay the same low cost.” Looking at the brochures that describe each plan’s benefits, it is true that Clover members pay the same price whether they see an in-network or out-of-network provider.  But, as we noted earlier, consumers might be confused by the fact that out-of-network providers aren’t obligated to treat them except in emergency situations, and that they may need to get a pre-service determination from Clover before seeing an out-of-network provider to make sure Clover will pay for it. This information appears in the fine print at the bottom of the page. It could be more clearly explained higher up on the page.

Consumers might also have difficulty locating the page on Clover’s website that explains these out-of-network coverage rules. They might not come across it in casual browsing. It is accessible from a link near the bottom of the members plan document page, which contains a list of about 20 items. The page explains: 

“Out-of-network providers aren't required by law to accept Clover members. It's up to the out-of-network provider to decide whether they'll see Clover members or not. We're happy to reach out to out-of-network providers to let them know the benefits of accepting Clover members, but we can't guarantee they'll accept you as a patient.

“If you visit out-of-network providers, Clover will cover any service or procedure so long as it's medically necessary and covered by Medicare Parts A or B, or is as an additional benefit offered by our plan. “Medically necessary” means the services, supplies, or drugs are needed for the prevention, diagnosis, or treatment of your medical condition, meeting all accepted standards of medical practice. You may contact us in advance of any service or procedure to confirm it will be covered by our plan by calling 1-844-811-8899 (TTY 711) 8am – 8pm EST, 7 days/week.

“If you move forward with a service or procedure that isn't medically necessary with an out-of-network provider, you'll be held responsible for its full cost.”

To better serve consumers, this information, which is more thorough than the disclaimers throughout the website and in the plan description documents, could be included on or prominently linked to from other relevant webpages and included in the plan description documents. Better disclosures will help consumers, protect Clover’s reputation and keep the company out of trouble with CMS.

The Bottom Line

We may not know for sure whether Clover has stopped engaging in potentially misleading marketing practices until early next year, when we can find out whether CMS receives complaints about the company after customers start using their benefits in 2017. Based on what we can tell from looking at the company’s current online materials, Clover seems to have made all the changes requested by CMS last year. But there is still room for improvement in making sure customers and potential customers fully understand their out-of-network benefits.