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Medicare News
Seven Companies Suspend Marketing Medicare Advantage
Fee-For-Service Plans
CMS lays down ‘strict guidelines’ to stop deceptive
marketing
 June 16, 2007 - Seven companies have agreed to
voluntarily suspend the marketing of their Medicare plans known as
Private-Fee-For-Service plans, according to the Centers for Medicare and
Medicaid Services. The action late Friday comes months after senior citizens,
advocacy groups and members of Congress began complaining about the
marketing tactics of these private insurance companies. CMS responded
with an investigation that included a “secret shopper” program to learn
the marketing tactics of the companies.
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The companies signing the voluntary suspension
include United Healthcare, Humana, Wellcare, Universal American
Financial Corporation (Pyramid), Coventry, Sterling, and Blue Cross/Blue
Shield of Tennessee.
The suspension for a plan will be lifted only when
CMS certifies that the plan has the systems and management controls in
place to meet all of the conditions specified in the 2008 Call Letter
and the May 25, 2007 guidance issued by CMS.
“Through a variety of methods, including our
‘secret shopper’ program that uses trained individuals to attend
marketing events and report back on the insurance agents’ activities,
and the eyes and ears of our thousands of partners throughout the
nation, CMS is proactive in protecting beneficiaries from rogue agents,”
said Leslie V. Norwalk, Acting Administrator of CMS.”
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Company List |
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BlueCross BlueShield of Tennessee
Coventry Health Care, Inc.
Humana Inc.
Sterling Life Insurance Company
UnitedHealth Group
Universal American Financial Corp.
Wellcare Health Plans, Inc. |
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“While we note that most health insurance agents
are helpful and responsible in describing and explaining choices to
beneficiaries, there are a few bad actors that need to be removed from
the system for good,” said Norwalk.
“This voluntary agreement demonstrates that CMS and
the plans are stepping up to ensure that deceptive marketing practices
end immediately, and that beneficiaries understand what they are
purchasing.”
“Although the 2700 agent complaints we logged from
December 2006 to April 2007 represent less than one half of one percent
of the 1.3 million members enrolled in individual PFFS plans, we can
always do better,” added Norwalk.
The agreement is effective five business days from
June 15 and will continue to apply to individual plans until they have
demonstrated to CMS that they have the systems and management controls
in place to ensure that they can meet all the CMS requirements.
CMS review will begin as soon as plans indicate
they are ready.
The action involves two of the nation's biggest
players in the marketing of Medicare health plans, UnitedHealth Group
and AARP. Last April the insurance giant announced an agreement with
AARP "to extend and broaden their existing arrangement for an additional
seven years to cover AARP-branded Medicare Advantage, Medicare Part D
and Medicare Supplement products across all markets." This new
agreement, which begins January 1, will also provide for an expanded
range of AARP-branded Medicare Advantage plans.
Plans signing the agreement will be actively
monitored to ensure they do not engage in marketing while the voluntary
suspension is in place. Violations will be subject to a full range of
available penalties, which can include suspension of enrollment,
suspension of payment for new enrollees, civil-monetary penalties, and
termination of the plan’s involvement in the Medicare program.
The full range of updated conditions will be in
effect for all sponsors of PFFS plans beginning October 1, 2007, and
violations of those conditions will be subject to the same types of
penalties.
Primary provisions that the plans signing the
agreement must meet to have the suspension lifted (and that all PFFS
must meet beginning October 1, 2007) are summarized below:
● All materials, including but not limited to
advertisements, enrollment materials, and materials used at sales
presentations by employees or contracted representatives of a health
insurance company will include the model disclaimer language provided by
CMS in its May 25, 2007 guidance.
● All representatives selling the product to
beneficiaries on behalf of the plan sponsor will pass a written test
that demonstrates their thorough familiarity with both the Medicare
program and the product they are selling.
● A provider outreach and education program will
be in place to ensure that providers have reasonable access to the plan
terms and conditions of payment, and that provider relations staff are
readily accessible to assist providers with questions concerning the
plan.
● Outbound education and verification calls will
be made to all beneficiaries requesting enrollment to ensure that they
understand the plan rules.
● Lists of planned marketing and sales events
provided to CMS will include events sponsored by delegated brokers and
agents as well as those sponsored by the plan.
● When asked by CMS, plan sponsors will provide
a complete list of all representatives marketing a PFFS product and
authorize CMS to make that list available to State Insurance Departments
on request.
“We want to underscore that Corrective Action Plans
already in place will remain in effect until full compliance is attained
and investigations underway involving fraud or criminal activity will
continue to their appropriate conclusion,” added Norwalk.
“In addition, once marketing resumes, CMS will
actively monitor performance. Any violations of the requirements set
forth in CMS guidance will be subject to immediate remedial action in
accordance with standard procedures.”
American Financial Corporation (Pyramid), Coventry,
Sterling, and Blue Cross/Blue Shield of Tennessee.
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