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Medicare AdvantageFeatured Story March 3, 2008 CMS Could Soon Issue Guidelines or Regulations
to Control Medicare Advantage Marketing Reprinted from MEDICARE ADVANTAGE NEWS, biweekly news and analysis on the Medicare (and Medicaid) managed care programs. Amid reports that the Senate Finance Committee is crafting legislation that would further restrict Medicare Advantage plans' marketing and sales activities, Acting CMS Administrator Kerry Weems told the panel Feb. 13 that federal regulators are close to unveiling new MA marketing guidelines - or even perhaps regulations. Sen. Max Baucus (D-Mont.), the Senate finance panel's chair, reportedly is looking at banning door-to-door sales of MA plans, prohibiting insurers from paying bonuses or commissions to agents based on the number of beneficiaries they enroll, and giving more regulatory power to the states. His legislation also might prohibit MA plans from using call centers to find potential sales leads, and ban agents from representing themselves as being from the Medicare program. CMS officials have asserted that such legislation is unnecessary because the targeted practices already are prohibited through regulations and MA contract requirements. But Baucus asserted in his opening statement that CMS guidelines "are just not enough" to stop MA marketing abuses, and then pressed Weems, asking, "Why guidelines and not regulations?" Weems replied, "I'm not eliminating regulations as a possibility." Asked for further clarification, CMS spokesman Joseph Kuchler told MAN Feb. 15 that CMS "cannot comment on future administrative actions at this time." He noted that several marketing provisions are found in the draft 2009 MA/Part D industry call letter; a final letter is due out in March. Former CMS official Larry Kocot tells MAN that CMS is being pushed by Congress to make visible efforts. If political "noise" continues, CMS will be forced to act on MA marketing and could make examples of some plans, he says. He notes that during a Feb. 7 Senate finance hearing, Humana Inc. said it is taking action to curtail inappropriate MA marketing practices, while an individual beneficiary testified about harmful MA sales tactics during the same hearing. "The perception is more important than the reality," says Kocot, who is now Washington, D.C.-based senior counsel with the law firm of Sonnenschein Nath & Rosenthal LLP and deputy director of the Engelberg Center for Health Care Reform at The Brookings Institution. "Regardless of whether the [MA marketing] violations are widespread, the perception is that they are. And if plans don't take action to police their marketing, CMS will be forced to take further action, and Congress may as well." Looking beyond MA sales tactics, Congress in mid-February continued to focus on potential MA payment cuts. Rep. Pete Stark (D- Calif.), chair of the House Ways and Means health subcommittee, opened a Feb. 14 hearing on Medicare portions of the president's budget request by noting that while Congress has reduced resources for a variety of Medicare providers, "we somehow overlook doing anything with MA, where there seems to be some universal agreement among the experts that we're overpaying" such plans. Weems declined to offer specifics or to provide a timetable for CMS action during his Feb. 13 Senate testimony. But his remarks during an hour and a half of questioning from concerned committee members from both sides of the aisle shed some light on CMS's possible next steps. They include: Imposing further restrictions on how MA organizations are allowed to make contact with beneficiaries in marketing products. The panel referred back to its Feb. 7 hearing on MA marketing practices at which it heard testimony concerning "cold calls" to beneficiaries, and pressed Weems about whether CMS would crack down on the practice. "We're looking at cold calls, [as well as sales agents] approaching beneficiaries in a parking lot," he responded. "Why not just ban in-home sales?" Baucus asked Weems, the hearing's sole witness, at one point. The panel referred back to instances of allegedly abusive in-home MA sales tactics reported by a Medicare beneficiary at its Feb. 7 hearing. "We're considering a range of things. I won't say we'll ban in-home sales, [but] it's one of the things we're considering," Weems responded. At a Medicare marketing training session held Aug. 13, 2007, by CMS in preparation for the Oct. 1 start of the 2008 selling season, CMS cautioned (in a slide presentation now posted on its Web site) that "Medicare health plans and agents may not solicit beneficiaries door-to-door unless invited; send unsolicited e-mail; enroll people by phone, unless the person calls them; offer cash payment as an inducement to enroll; misrepresent or use high pressure sales tactics." Cracking down on agents' sales commission structure. Sen. Ron Wyden (D-Ore.), a member of the Senate finance panel, said he didn't get a sense that MA commission structure is a top priority for CMS. Wyden said he wanted to try to change Weems' mind about the urgent need to correct practices that could harm seniors. "Senator, I agree with you. I agree this is not theoretical," Weems responded. "We are on the way with further administrative action on commissions that you'll see in coming weeks." Weems said he is most concerned about so-called "churning," saying beneficiaries should "stay in the plan that is best for them, not for their agent." Wyden asked what kind of limitations CMS would impose to avoid churning. "There are certain industry standards we'll take a look at to see if they should be codified," Weems replied. Handing over more regulatory power on MA marketing to the states. "The states are ready to go now. They are ready to use their resources to help people being exploited now," Wyden said to Weems. "What can be done to take the shackles off the states?" Weems conceded that CMS is facing budgetary challenges with respect to its enforcement efforts. But he said Congress ought to consider giving CMS the resources that the agency requests before taking steps to give states more regulatory power over MA plans. Throughout the hearing, Weems insisted that CMS is strengthening its own oversight and regulation of plans. Referring to CMS data, he asserted that the agency's effort has paid off in fewer violations and complaints in recent months "as we began a more determined enforcement effort." At one point in the hearing, Baucus told Weems that the dearth of complaints from MA plans about CMS regulatory steps taken so far was causing him concern. "That to me is a signal you're not doing enough. I haven't heard a single complaint, not one, from plans saying, 'CMS is too aggressive on our marketing'…and one major company [i.e., Humana] says you should do more." "They will likely get their wish," Weems replied. For recent testimony, go to http://finance.senate.gov/sitepages/hearings.htm.
View marketing provisions in the draft 2009 call letter at www.cms.hhs.gov/HealthPlansGenInfo/.
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