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Home / News & IndustryManaged Care Insight and Analysis
Updated: Oct. 21, 2008
CMS Proposes Clamp Down On Medicare Advantage And Part D Marketing Abuses

A regulation that would further clamp down on Medicare Advantage (MA) and Medicare prescription drug plans marketing practices has been proposed by the Centers for Medicare and Medicaid Services (CMS).

The proposed regulation is a continuation of CMS’ efforts to enhance compliance and oversight of the MA program over the past 10 months, CMS said.

The proposed rule would incorporate into regulation a number of requirements that CMS previously imposed through operational guidance. It would also introduce several new MA and prescription drug plan requirements, CMS said.

The new proposed rule specifies prohibitions on door-to-door marketing and cold-calling as well as new proposed requirements pertaining to broker/agent commissions that go beyond what the insurance industry recently endorsed as necessary regulatory changes to the program for improvement.

Specifically, the proposed plan marketing standards would:

  • Prohibit cold-calling and expand the current prohibition on door-to-door solicitation to cover other unsolicited circumstances. Any appointment with a beneficiary to market healthcare-related products would have to be limited to the scope that the beneficiary agreed to in advance.
  • Cross-selling of non-healthcare-related products to a prospective MA or Part D enrollee would also be prohibited.
  • Prohibit sales activities at educational events such as health information fairs and community meetings or in areas such as waiting rooms where patients primarily intend to receive healthcare-related services, as well as limit the value and type of promotional items offered to potential enrollees.
  • Require that MA organizations that use independent agents to market MA and Part D plans use state-licensed agents for such marketing, and require that MA organizations report to states, in a manner consistent with state appointment laws, that they are using those agents.
  • Require MA organizations to establish commission structures for sales agents and brokers that are level across all years and across all MA plan product types (for example, HMOs, PPOs and private fee-for-service plans). Commission structures for prescription drug plans would have to be level across the sponsors’ plans as well.

These requirements are designed to discourage "churning" of beneficiaries from plan to plan each year in a manner that earns agents and brokers the highest commissions and would ensure that beneficiaries are receiving the information and counseling necessary to select the best plan based on their needs, CMS said.

CMS also proposed provisions to streamline eligibility determinations for extra help and limited beneficiary liability would:

  • Codify earlier guidance to plan sponsors about using "best available evidence" to determine an enrollee’s eligibility for extra help through the low income subsidy program.
  • Set other premium and cost sharing protections related to the Social Security premium withholding and point-of-sale drug prices.
  • The rule would also clarify one approach to calculating fines, or civil monetary penalties, against MA or Part D plans that violate Medicare rules in ways that adversely affect beneficiaries. Under the proposal, CMS would have greater flexibility in determining penalty amounts and would have clear authority to levy a penalty of up to $25,000 for each enrollee affected, or likely to be affected, by the violation.
  • The rule also proposes new protections for beneficiaries enrolled in special needs plans (SNPs). SNPs are a type of MA plan that provides coordinated care to individuals in certain institutions such as nursing homes, and those who are eligible for both the Medicare and Medicaid programs and/or have certain severe or disabling chronic conditions.

Address: Centers for Medicare and Medicaid Services, 7500 Security Blvd., Baltimore, MD 21244; (877) 267-2323, www.cms.gov.


  This article was taken from:
The Executive Report on Managed Care

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