DMOs Using Gift Cards to Attract New Members But It’s Illegal For Dental Providers

Remember back in 2012 when the media and the state were outraged by dentists giving out gift cards or other small inducements to have Medicaid children get under care? In case you don’t, here are links to some media articles of the time.

Outrage in 2012 over gift cards

Texas Tribune: State Tackles Concerns in Medicaid Dental System
State officials, dentists and other providers met Friday on how to treat orthodontic transfer patients, why some corporate clinics are allowed to use gift cards and pizza to lure new patients and other technicalities related to the transition to Medicaid managed care.
KENS5: Medicaid recruiters scramble for Texas dental patients
They have different names recruiters, marketers, community outreach workers but their job is to get children on Medicaid into dental offices. Competition is intense, and taxpayers foot the bill.

Lots of education about illegal dental solicitation since

Since that time, OIG has gone around and done seminars and talks with stern warnings about illegal dental solicitation. We’ve even reported on them.

The TDA warns about it too. In their Medicaid Monthly, they’ve written: “Medicaid/ CHIP dentists are also prohibited by Medicaid/ CHIP regulations from offering gifts or other inducements designed to influence a client’s choice of dentist provider. … Items such as cash, cash equivalents and gift cards, regardless of the amount, are never permissible.”

What isn’t good for the goose, looks really good for the gander

All three DMOs, DentaQuest, MCNA, and United Healthcare, are using gift cards as inducements for new members. Words that applied to dentists — “lure, trick, manipulate” — have evaporated.

No horrified parents or guardians are speaking out. In 2012, an upset and shocked grandmother told KENS5, “Can you imagine getting a $20 gift card just to bring your kid to the dentist?” She thought it was terrible.

Now it is okay…as long as the insurer does it.

Is it legal for them to do so?

The latest DMO contract – Dental Services for Texas Children’s Medicaid and Children’s Health Insurance Program, Contract No. HHS0002879 – states:

2.3.22 MARKETING AND PROHIBITED PRACTICES
The Dental Contractor and its Subcontractors must comply with all applicable federal and state laws and regulations regarding marketing, gifts, and other inducements. The Dental Contractor and its Subcontractors must adhere to the Marketing policies and procedures as set forth in the Contract, including Chapter 4 of the UMCM [ UNIFORM MANAGED CARE MANUAL}. HHSC must approve all Marketing Materials before use or distribution. All Marketing Materials must comply with all state and federal marketing requirements, including State insurance laws and TDI regulations regarding marketing.

The contract even defines “Marketing” as: “any communication from the Dental Contractor to a Medicaid or CHIP Eligible who is not enrolled with the Dental Contractor that can reasonably be interpreted as intended to influence the Eligible to:

(a) Enroll with the Dental Contractor; or
(b) Not enroll in or to disenroll from another Dental Contractor.

Here is the link to a PDF copy of the contract if you wish to download and read it.

It is not clear in the contract if this is allowable.

So what does Chapter 4 of the UMCM state? A PDF of Section 4.3 is downloadable from here.

It is very clear.

XIX. Use of Giveaways and Incentives

1. The MCO may provide promotional Giveaways or Incentives to Potential Members provided that these items have an individual retail value of no more than $15 and no more than $75 in the aggregate annually per Potential Member.

2. The MCO is allowed to accept items from third-party sources and distribute them to CHIP and Medicaid Managed Care Program Members and Potential Members as Giveaways. The same dollar limits listed in this policy apply. The MCO may adhere its MCO sticker to third-party items.

3. The MCO may not make enrollment into the MCO a condition of Giveaways or Incentives to Potential Members.

4. The MCO may not willfully or knowingly provide multiple Giveaways or Incentives to Potential Members which exceed the value limitation.

5. The MCO may provide promotional items to a Provider at the MCO’s discretion. However, the MCO must not provide Giveaways or Incentives to Providers for the purpose of distributing them to Members or Potential Members.

6. The MCO may provide Giveaways or Incentives to encourage Member attendance at MCO events or participation in MCO periodic surveys, Member Advisory Committees, and Health-related Wellness Programs.

7. The MCO Giveaways may contain the MCO name or initials, logo, and contact information (phone number or website address). Giveaways may not make any reference to the CHIP/Medicaid Managed Care program.

8. The MCO may collect the name and telephone numbers of Potential Members who wish to participate in a door prize drawing at an event; however, the MCO must not use the Potential Members’ contact information for any purpose other than to arrange pick-up of the door prize by the winner.

9. The MCO must not give gift cards to Members or Potential Members that are redeemable for cash or allow the Members or Potential Members to purchase alcohol, tobacco, or illegal drugs.

So while banning Medicaid providers from providing patient inducements even from DMOs, Texas HHS encourages DMOs to do so. Just look at #5 above.

Does it violate federal regulations?

Apparently not. Under the U.S. CODE OF FEDERAL REGULATIONS 42 CFR 438.104, Marketing activities. the main relevant infringements would be

(iv) Does not seek to influence enrollment in conjunction with the sale or offering of any private insurance.

(v) Does not, directly or indirectly, engage in door-to-door, telephone, email, texting, or other cold-call marketing activities.

What does OIG say

When we first found out about this, we asked OIG and got a response from their communication director Dr. Andres Araiza. The question posed: “A dentist just informed us that United Healthcare is offering $25 gift cards to new members as an incentive. I’ve found their flyer that says so. If a Medicaid dentist did this, OIG would be investigating them. Is this a double standard?”

His answer: “Texas Health and Human Services is responsible for developing policies followed by MCOs regarding wellness incentives. Please contact Texas HHS if you have questions about the policy.”

So we reached out to Dr. Marguerite Laccabue, Dental Director at Texas Health and Human Services, Medicaid and CHIP Division. She wrote that she wasn’t aware of all the details and would provide us with a contact person in the contract division. We hope to get more details on how this came about.

TDMR doesn’t think it is wrong but why can’t providers

Do we think this is wrong? No, we don’t. Marketing one’s service is necessary.

It is just very strange to us that this is an acceptable practice for Medicaid DMOs but not Medicaid dentists.

It is about getting children under care for dental health.