Medicare Advantage

Federal Regulators Are Cracking Down on Improper Marketing Activities by Medicare Advantage Plans

Reprinted from MEDICARE ADVANTAGE NEWS, biweekly news and analysis on the Medicare (and Medicaid) managed care programs.

Federal regulators are cracking down on improper marketing by Medicare Advantage (MA) plans, CMS officials stressed at a conference in Washington, D.C., late last month. Not only does CMS intend to expand its scrutiny of MA marketing activities, but the federal agency is looking into establishing thresholds for agent and broker commissions on MA products, agency officials said.

CMS Acting Administrator Kerry Weems told the America's Health Insurance Plans' Medicare Conference Sept. 24 that the agency had levied civil monetary penalties against two plans that it would not identify for "marketing abuses" in the previous week. Unless marketing abuses are "nipped in the bud," he said, "congressional and public sentiment could easily turn against the entire MA program."

Later that day, Abby L. Block, director of CMS's Center for Beneficiary Choices, said one violation involved solicitation of Medicare beneficiaries at three public housing projects "in the Washington area" to join MA-only plans with no prescription drug coverage. Some of the solicited enrollees previously had drug coverage through a stand-alone Prescription Drug Plan (PDP) or through a Medicare Advantage prescription drug plan (MA-PD), she said.

The other case, according to Block, involved the use of unlicensed brokers. Block said that she couldn't determine in that case "whether there was foreknowledge, but in the first case the incident occurred in more than one location."

Block opened her panel presentation by talking about the concept of Medicare as a brand. "The reputation of a brand can be as important as any other asset," she said. "Medicare is also a brand — a brand we all represent. To the public, Medicare is Medicare, whether they receive their benefit from fee-for-service, Medicare Advantage, or a Prescription Drug Plan."

In her presentation, Block outlined a number of CMS actions. Among them:

• CMS intends to expand its ongoing scrutiny of marketing activities. "We're also taking steps for 100% compliance with [marketing] requirements," she said. "What we've learned on private-fee-for-service marketing has applicability across all Part C [i.e., MA] and Part D [i.e., drug benefit] products."
• CMS is looking into establishing thresholds on agent and broker commissions for MA products. "We have some guidance in our marketing guidelines on commissions, but my guess is [that] in the immediate future we'll be looking at guidance.that allows reasonable variation in commissions depending on the type of product marketed," she said.
• CMS will continue to identify "emerging issues" to address, such as employer coverage of retirees using PFFS plans. PFFS is attractive to employers because it doesn't require a set network of providers, she said, but "there are problems that arise around marketing." Frequently with retiree plans, she said, the choice of plans is in the hands of the employer and, because retirees can be widespread geographically, some providers may not be familiar with a product or product sponsor. Thus, she said, there could be a potentially high incidence of retirees in an employer-sponsored PFFS plan lacking coverage, and yet these retirees may not change plans until the next annual open-enrollment period. Companies should have a "fallback plan," she said, asserting that such a situation illustrates the need for provider outreach on payment and access issues by both CMS and the plans.

"As an initial effort, we're considering requiring employers using CMS handouts to educate people on how PFFS works.…Along with increased provider education, beneficiaries need better information about all MA products," Block said. "No materials provided to beneficiaries should confuse or mislead them." She said plans should have "an early warning system" for certain populations, such as people for whom English is a second language or those with cognitive impairment.

In a question-and-answer session, Block was asked whether CMS is addressing variation in handling marketing issues and compliance among CMS's regional offices. "This is something that I've heard and something that we're working on in many different ways," she said. CMS announced Sept. 24 that all seven MA organizations which had voluntarily suspended non-group PFFS marketing in June had passed CMS marketing reviews and were allowed to resume marketing. She said CMS worked to review these organizations "in the same way using exactly the same criteria," and has given regional CMS offices the same format.

Block cited "a small reorganization" within CMS establishing an MA consortium headed by Jim Kerr, regional CMS administrator in New York.

Block spoke on a panel that included Steve Calabrese, Medicare officer for the eastern region of Health Net, Inc. "Selling Medicare Advantage plans is not like selling Q-tips, cotton socks or quarter pounders," he said, explaining that Health Net tries to make communication with beneficiaries "as simple as possible" by color coding its array of MA products.

Health Net contracts with individual general agents and field marketing organizations and has special marketing arrangements, Calabrese said. "A captive sales force 12 months a year isn't now affordable or manageable," he said. "We also contract with a broker distribution model - a new strategy for us — for broader geographic outreach."

Anyone selling Health Net's MA products must take online training and pass certification examinations, must provide current licenses and proof of insurance, and must attend local face-to-face training on Health Net's products, Calabrese said. They also must provide schedules of PFFS sales events on a monthly basis, and abide by Health Net's standards of professionalism, he said.

In another effort at self-policing, Health Net sales leaders monitor sales data and address adverse trends, such as rapid disenrollments or suspected "churning" — moving in and out of insurance products, Calabrese said. Health Net has "a national producer compliance handbook that spells out procedures for monitoring, documenting and archiving producer activities," he said, as well as a special investigations unit that looks into allegations of fraud, waste and abuse.

Advertise With AIS

Privacy

Site Map