WASHINGTON – Responding to concerns that private fee-for-service plans for Medicare are not being accurately marketed, the Centers for Medicare & Medicaid Services has announced a suspension in marketing for the plans.
Announced on June 15, the ban will remain in effect until CMS is assured that training and management programs are in place to limit the chances of what it calls “deceptive marketing practices.”
Seven plans have signed an agreement to suspend marketing the fee-for-service plans to beneficiaries. Those plans – Blue Cross Blue Shield of Tennessee, Coventry, Humana, Sterling, United Healthcare, Universal American Financial Corp. and Wellcare – cover about 90 percent of the 1.3 million beneficiaries enrolled in private fee-for-service plans.
Critics of the Medicare programs said the steps announced by CMS are meant to forestall Congressional inquiry. They said it would do little to curb abuses in the program or limit insurers’ profits from running the Medicare Advantage plans.
“The Bush Administration and private health plans have finally acknowledged part of the problem, but they continue to refuse to be a meaningful part of the solution,” said Rep. Pete Stark (D-Calif.). “Across America, profit-driven private plans and their agents are using dishonest tactics to sign seniors and people with disabilities up for private Medicare Advantage plans.”
“The Administration’s response is to allow private companies to determine which crimes they’ll plead to and which sentences they’ll serve,” Stark added. “This will do virtually nothing to protect Medicare beneficiaries and is a pathetic attempt to preempt Congressional action.”
CMS logged about 2,700 complaints from December 2006 through April concerning the Medicare Advantage plans, said Abby Block, director of CMS’ Center for Beneficiary Choices.
She said the deceptive marketing often came from “rogue agents,” who have contracts with the payers operating the plans.
“There’s confusion about what a private fee-for-service plan looks like,” Block said. “The impression (the rogue agents) give is that (of) the original Medicare fee-for-service of the past. Rogue agents encourage that misperception; they tell beneficiaries that they can go to any provider they choose. That’s not always the case.”
In addition to suspending marketing, the seven insurers have agreed to install systems and management controls and implement training to ensure that agents understand the program.
All marketing materials are to contain model disclaimer language, provided by CMS, by no later than October 1. Block said the agreement calls for a requirement that agents pass a written test to prove they are familiar with the private fee-for-service program and the products they are selling.
CMS plans to step up enforcement by investigating complaints, engaging partners and stepping up its “secret shopper” program, Block said.
Penalties for marketing violations can include suspension of the ability to enroll beneficiaries, suspension of payments, monetary penalties and termination from the Medicare program, she added.
Close oversight of marketing practices will continue for the rest of 2007, Block said, or until “full compliance is attained.” The crackdown is particularly important because enrollment in private fee-for-service plans has increased rapidly in the past year.
Block emphasized that the deceptive marketing appears to be limited to a few agents who are typically not under the direct control of the insurers with which they contract. “Most brokers and agents out there are responsible, reputable people,” she said. “We are bound and determined to shut those rogue agents down.”
Block said some of the plans could quickly meet CMS requirements and, once their adherence is verified, could begin marketing efforts within a couple weeks.