The Centers for Medicare & Medicaid Services (CMS) announced today that, after being found compliant with Medicare requirements through a comprehensive marketing review, seven health plan sponsors may resume marketing their Private-Fee-For-Service (PFFS) plans. The approvals allow the sponsors, as well as all other Medicare Advantage organizations, to market to newly eligible Medicare beneficiaries through October 1, 2007. The plans may also market to those beneficiaries with special enrollment periods.
The United Health Group, Blue Cross Blue Shield of Tennessee, Humana Inc., and Sterling Life Insurance Co. represent four of the seven sponsors that voluntarily suspended marketing PFFS plans earlier this year that are now approved. CMS completed a similar review of and approved PFFS-plan marketing by the three other sponsors, Coventry Health Care Inc., Universal American Financial Corp., and WellCare Health Plans Inc., in August.
“Overseeing the marketing activities of Medicare Advantage plans to ensure beneficiaries have access to the health care services they need, and are not discriminated against in any way is one of my top priorities,” said CMS Acting Administrator Kerry Weems. “CMS conducted a comprehensive review of these seven sponsors and found vast improvements to their internal controls and oversight processes consistent with regulations and guidance for Medicare private-fee-for-service plans. But we’re not stopping there. Medicare’s procedures to continuously monitor all plans marketing, including the activities of their agents and brokers, are now in place.”
Any plan that is found to be in violation of CMS requirements can be subject to a full range of available penalties, which can include suspension of marketing and/or enrollment, suspension of payment for new enrollees, civil-monetary penalties, and termination from the Medicare program.
The suspensions of the plan sponsors’ PFFS market activities were lifted only after CMS verified that each organization had 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. When marketing begins for the 2008 benefit year on October 1, 2007, all PFFS plans will be subject to the same standards, which include the following:
All brokers and agents selling the product must pass a written exam to demonstrate an understanding of Medicare PFFS policies and the products being marketed;
Plans must telephone beneficiaries requesting enrollment in a PFFS plan to confirm that they understand the terms and conditions of the plan;
A provider outreach and education program must be in place to ensure that providers are aware of PFFS plans and their payment provisions and are encouraged by the plans to provide services to PFFS enrollees;
Plans must include specific disclaimer language in key enrollee materials to ensure beneficiaries understand the unique aspects of PFFS;
Lists of planned marketing and sales events sponsored by the plan’s brokers and agents must be provided to CMS so that CMS can monitor these events.
“Sponsors selling private-fee-for-service plan products will be actively monitored through 1-800-Medicare, our Regional Office casework system and improved oversight systems,” added Weems. “In addition, we have forged new partnerships with State Insurance Commissioners and others to give us an even larger surveillance net to help monitor this program.”
CMS has more than a dozen new oversight activities underway. Some of these activities include:
Creation of a dedicated monitoring team and a comprehensive rapid response plan;
Enrollment verifications of new PFFS plan enrollees by CMS to ensure the enrollees were not subject to inappropriate marketing activities and understand the characteristics of a PFFS plan;
Increased “secret shopping” at PFFS marketing events;
Random audits of PFFS agent training and test files;
Thorough reviews of PFFS enrollment packages to verify all required disclaimers are included;
Coordination with state insurance departments to share information about agent and broker complaints and license suspensions.
CMS has also developed an outreach plan to educate beneficiaries, advocacy organizations, and other interested parties about the marketing guidelines.
“The best practice is prevention. We believe the new requirements and compliance plans build a system that is designed to prevent marketing violations,” Weems concluded.