Coakley endorses more regulations to combat medical marketing scams

Ashley Stinnett Sep. 15, 2009, 3:46pm


BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley is proposing tougher regulations designed to protect state residents against unfair and deceptive marketing practices.

The State is looking at more ways to protect consumers from marketing of plans that claim to offer discounts on medical products or services, according to Coakley.

Coakley's office has also set up a consumer education outreach program, along with tougher law enforcement actions.

The proposed regulations would require organizations marketing medical discount plans for sale in Massachusetts to fully disclose how the plan works and whether the plan is limited to certain services or products from certain providers.

The disclosures must make clear that the discount plan is not insurance and that the consumer will be required to pay for any services or products, according to Coakley.

In addition, the new regulations will require medical discount plans to keep a list of providers who subscribe to the discounts.

"As a result of health care reform in Massachusetts, all residents are required to have health insurance and are presented with a wide range of coverage options," Coakley said.

"It is critical that companies who offer any kind of medical coverage plans or medical discount card clearly disclose what their plans do and do not offer, and whether they fulfill the individual mandate."

According to Coakley, medical discount plans claim to offer consumers discounts for specific health care products or services from certain providers in exchange for some form of fee.

Under a medical discount plan, the plan member receives a discount, but is obligated to make all payments for services provided.

Medical discount plans are not insurance products and are not regulated by the Division of Insurance.

Coakley will hold a public hearing on the proposed regulations on Oct. 13.

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