The Centers for Medicare and Medicaid Services, seeking to curtail marketing abuses within Medicare Advantage and Medicare Part D prescription drug plans, has proposed new regulations that would prohibit such tactics as door-to-door marketing and cold-calling of beneficiaries.
The proposed rules, which would incorporate into regulation several requirements that CMS already has imposed administratively, would tighten marketing standards and require independent insurance agents who sell Medicare Advantage and Part D products to be licensed by the state, the agency said.
The rules, which are subject to public comment, also seek to eliminate incentives for agents to “churn” beneficiaries, or persuade people to change plans, in order to gain enhanced commissions, said Abby Block, director of the CMS Center for Beneficiary Choices.
“There won't be the kinds of incentives there are in the market now for brokers and agents to try and convince beneficiaries to move from one plan to another,” Ms. Block said at a press briefing.
CMS plans to roll out the final rule before the fall open enrollment season.
CMS Acting Administrator Kerry Weems noted that the proposed regulations “go beyond what the insurance industry recently endorsed as necessary regulatory changes to the program.” He added, “I want to emphasize that this is a large and comprehensive rule.”
However, the House Committee on Energy and Commerce, which has released a report on the Medicare Advantage program, said that the proposed changes in marketing requirements “will do little to address the fundamental problems with Medicare Advantage plans.”
According to Rep. Bart Stupak (D-Mich.), chairman of the committee's subcommittee on oversight and investigation, the committee's report “has verified countless stories of deceptive sales practices by insurance agents who prey on the elderly and disabled to sell them expensive and inappropriate private Medicare plans.” He noted in a statement that the report “shows that steps taken by CMS will not be nearly enough to protect our most vulnerable citizens from deceptive sales practices.”
The committee report recommended better sales agent training, strengthened state oversight of plan sales operations, standardization of plan benefit packages, and comprehensive tracking of beneficiary complaints.
The CMS proposal received mixed reviews from Medicare Advantage stakeholders.
Karen Ignagni, president and CEO of America's Health Insurance Plans, said in a statement that the proposed regulations are “an important step to ensure beneficiaries can rely on the information being provided to make the Medicare coverage decisions that are right for them.” In March, AHIP advocated for stronger federal regulation and oversight of Medicare Advantage and Part D plan marketing activities.
Robert Hayes, president of the consumer advocacy group the Medicare Rights Center, said in a statement that the proposed regulations “are inadequate to address the problems we see every day. These regulations do nothing to prevent insurance companies from using high commissions and volume-based bonuses to encourage agents to enroll people with Medicare in substandard plans that provide inadequate financial protection, abysmal customer service, and poor access to providers.”
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, such as sales activities at educational events like health information fairs and community meetings, or in areas such as waiting rooms where patients primarily intend to receive health care-related services, according to CMS.
In addition, Medicare Advantage organizations that use independent agents to market would be required to use state-licensed agents and to report to states that they were using those agents.
The regulations also would require Medicare Advantage organizations to establish commission structures for sales agents and brokers that are level across all years and across all product types. Commission structures for prescription drug plans would have to be level across the sponsors' plans as well. The requirements are designed to discourage “churning,” and would ensure that beneficiaries are receiving the information and counseling necessary to select the best plan based on their needs, according to CMS.
The rule also proposes new protections for beneficiaries enrolled in special needs plans (SNPs), a type of Medicare Advantage plan that provides coordinated care to individuals in certain institutions, such as nursing homes; those who are eligible for both Medicare and Medicaid; and those who have certain severe or disabling chronic conditions.
The proposed rules would require that 90% of new enrollees in SNPs be special needs individuals, would more clearly establish and clarify delivery of care standards for SNPs, and would protect beneficiaries enrolled in both Medicare and Medicaid from being billed for cost sharing that is not their responsibility.