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Medicare Drug Program News
CMS Says New Regulations Will Better Protect Seniors
in Advantage and Drug Plans
Proposal tightens marketing rules, protects from
inappropriate cost sharing
May 8, 2008 - The Centers for Medicare & Medicaid
Services (CMS) says in a news release today that it will propose new
regulations and new requirements for Medicare Advantage (MA) health
plans and Medicare prescription drug plans. The CMS statement says the
actions will provide "enhanced protections" for senior citizens enrolled
in these plans.
The actions "will strengthen marketing standards
and extend additional protections to all beneficiaries including those
receiving the low-income subsidy (LIS) and beneficiaries enrolled in
special needs plans," according to the statement.
“These proposed changes will have a direct,
positive impact on people with Medicare,” said Kerry Weems, Acting
Administrator of CMS. “The Medicare Advantage program is a valuable
source of enhanced benefits and coordinated care for beneficiaries, and
it should not be undermined by the actions of a limited number of
unscrupulous sales agents.”
The proposed rule would incorporate into regulation
a number of requirements that CMS previously imposed through operational
guidance. It also would introduce several new MA and prescription drug
plan requirements. The new proposed prohibitions on door-to-door
marketing and cold-calling as well as new proposed requirements
pertaining to broker/agent commissions 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 health
care-related products would have to be limited to the scope that the
beneficiary agreed to in advance. Cross-selling of non-health
care-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
health care-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.
Provisions to streamline eligibility determinations
for extra help and limit beneficiary liability would:
● Codify earlier guidance to plan sponsors
about using “best available evidence” (BAE) to determine an enrollee’s
eligibility for extra help through the LIS program. Recognizing that
the monthly files from the States and the Social Security Administration
that Medicare uses to establish LIS eligibility sometimes do not reflect
an applicant’s current eligibility status, the regulation would require
Part D sponsors to use the CMS-developed BAE process to establish the
appropriate cost-sharing for low-income beneficiaries whose information
in CMS systems is not correct or up to date. This change would help
protect low-income beneficiaries from unnecessary cost sharing charges
at their pharmacy counters.
● Set other premium and cost sharing
protections related to the Social Security premium withholding and
point-of-sale drug prices. For example, in cases when premiums are not
deducted even though the beneficiary has chosen the withholding option,
plans would not be permitted to disenroll the beneficiary for not paying
premiums.
The rule also would clarify one approach to
calculating fines, or civil monetary penalties, against Medicare
Advantage 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. Provisions in the proposed rule would:
● Require that 90 percent of new enrollees in
SNPs be special needs individuals, to ensure that SNPs focus on the
population for which these MA plans are designed.
● More clearly establish and clarify delivery
of care standards for SNPs.
● Protect beneficiaries from being billed for
cost-sharing that is not their responsibility.
For SNPs that target beneficiaries who are eligible
for both Medicare and Medicaid, the rule would establish standards
designed to ensure that those beneficiaries are able to access essential
services that are available through Medicaid in addition to those
benefits available through the SNP.
CMS says this proposed regulation is a continuation
of CMS’ efforts to enhance compliance and oversight of the Medicare
Advantage program over the past ten months.
Recent compliance and oversight actions include:
● posting the summaries of corrective actions taken against MA 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.
The proposed regulation will be available on the
CMS website later today. Comments must be submitted by 5:00 p.m.
Eastern time on July 15, 2008.
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