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Federal Officials Close Probe of FHP Senior Plan : Health: Isolated instances of improper sales practices were found, they say, but no systematic violations of guidelines.

TIMES STAFF WRITER

Federal health officials have closed an investigation of FHP International’s marketing tactics for its senior citizen health plan, saying they found isolated instances of improper sales practices but no systematic violations of federal guidelines, FHP announced Monday.

In a letter released by the Fountain Valley-based company, the federal Health Care Financing Administration also said it will allow FHP to expand sales of its senior plan into new territories. HCFA had imposed a halt on expansion after receiving complaints from seniors, some of whom charged in interviews with The Times that they did not understand what they were signing when they joined the health maintenance organization.

When federal investigators visited FHP in July, they concluded that while “a number of anecdotal instances of improper sales practices being used by individual sales representatives, there was no confirmation of systemic violations of federal requirements,” HCFA’s letter said. The agency found that FHP later took measures to correct the problems.

FHP has taken several steps to ensure compliance with federal standards, said Nick Franklin, FHP vice president for governmental affairs.

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Sales representatives receive a bonus if a senior citizen stays in the HMO for at least 90 days, Franklin said, a move that would discourage quick-sale tactics. The company has also hired an auditor to monitor sales practices and has adopted a new verification procedure to confirm that elderly customers understand the FHP program, he said.

FHP plans to deepen its penetration of the lucrative senior market in Southern California and expand into Northern California and Nevada, Franklin said.


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