Medicare Compliance & Reimbursement

The Centers for Medicare & Medicaid Services is on the move to stamp out marketing abuse in Medicare Advantage health plans and Medicare prescription drug plans. In a May 8 press release, CMS says it is considering converting current guidelines into regulations and creating new regulations -- changes that will help all beneficiaries, including those receiving the low-income subsidy and those enrolled in special-needs plans.

CMS Acting Administrator Kerry Weems says in the release that the agency's proposals for new marketing standards for Medicare Advantage are aimed at "unscrupulous sales agents."

For the past 10 months, CMS has been enhancing compliance and oversight of Medicare Advantage by taking several actions, including:

• posting summaries of corrective actions taken against Medicare Advantage plans on the CMS Web site;

• establishing five-star ratings for plan performance;

• embarking on an extensive secret shopping program of plan marketing events that have led to compliance actions and more accurate sales presentations; and

• requiring private fee-for-service plans to call new enrollees to verify their desire to join the plan.

CMS says in the release that its proposals would incorporate into regulation a number of requirements that the agency previously imposed through operational guidance. CMS also wants new requirements for Medicare Advantage and prescription drug plans, such as prohibitions on door-to-door marketing and cold-calling.

Other new marketing standards would prohibit cross-selling of non-healthcare-related products to a prospective Medicare Advantage or Part D enrollee, and prohibit sales activities at educational events such as health-information fairs and community meetings or in areas such as waiting rooms.

CMS is seeking other marketing standards that would:

• limit the value and type of promotional items offered to potential enrollees;

• require Medicare Advantage organizations to use only state-licensed, independent agents to market MA and Part D plans;

• 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 (e.g., HMOs, PPOs and private fee-for-service plans); and

• require commission structures for prescription drug plans to be level across the sponsors' plans.

To streamline eligibility determinations and limit beneficiaries' liability, CMS would require Part D sponsors to use its "best available evidence" process to establish "appropriate cost-sharing for low-income beneficiaries whose information in CMS systems is not correct or up-to-date." The agency also wants cost-sharing and premium protections for Social Security premium withholding and point-of-sale drug prices, the release says.

CMS proposes that Medicare Advantage and Part D plans that harm beneficiaries by violating Medicare rules should face a penalty of up to $25,000 for each enrollee affected by, or likely to be affected by, the violation. CMS also wants greater flexibility in determining fines for violations, the release says.

The Medicare Advantage special-needs plans provide coordinated care to beneficiaries in institutions such as nursing homes and those who are eligible for both Medicare and Medicaid or have certain severe or disabling chronic conditions. To protect these beneficiaries, CMS wants to require that 90 percent of new enrollees in special-needs plans be special-needs individuals, the release says.

CMS also wants to clarify SNP standards for delivery of care and protect beneficiaries from being billed for cost-sharing that is not their responsibility.

The proposed regulation is at http://www.cms.hhs.gov/HealthPlansGenInfo/.