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Life Health > Health Insurance > Life Insurance Strategies

Some Private FFS Plans To Suspend Marketing

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Several health carriers have agreed to take a break from selling new private Medicare fee-for-service coverage.

The Centers for Medicare and Medicaid Services already has responded to consumer group criticisms of marketing of plans in its newly expanded private Medicare FFS program by setting new systems and management controls requirements that will take effect Oct. 1.

Now the CMS says 7 carriers have agreed voluntarily to suspend marketing altogether while implementing the safeguards required by CMS and other safeguards.

The 7 carriers are units of Aon Corp., Chicago; Blue Cross and Blue Shield of Tennessee, Chattanooga, Tenn.; Coventry Health Care Inc., Bethesda, Md.; Humana Inc., Louisville, Ky.; UnitedHealth Group Inc., Minnetonka, Minn.; Universal American Financial Corp., Rye Brook, N.Y.; and WellCare Health Plans Inc., Tampa, Fla.

The suspensions will be lifted when CMS certifies that plans have the systems and management controls in place to meet the Oct. 1 conditions, CMS officials say.

“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,” Leslie Norwalk, acting CMS administrator, says in a statement.

The private FFS program, which relies on private insurers to provide Medicare plans which permit members to see any willing provider, now has about 1.3 million members, Norwalk says.

The CMS has received 2,700 complaints about agents selling private FFS plans between December 2006 and April 2007, Norwalk says.

Companies that violate the “voluntary agreement” to suspend marketing “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,” officials say.

The full range of updated conditions will be in effect for all sponsors of private FFS plans beginning Oct. 1, and violations of those conditions will be subject to the same types of penalties, officials say.

The CMS is requiring of private FFS plan sellers that:

- All materials, including advertisements, enrollment materials, and materials used at sales presentations by employees or contracted representatives of a health insurance company must include CMS model disclaimer language.

- All representatives selling the product to beneficiaries must pass a written test.

- The carrier must reach out to providers to ensure that they have reasonable access to the plan’s provider payment information.

- The carrier must make outbound verification calls to make sure that customers understand the plan rules.

- The carrier must be able to give CMS officials a complete list of all representatives marketing a private FFS product and authorize the CMS to make that list available to state insurance departments.

America’s Health Insurance Plans, Washington, has put out a statement welcoming the private FFS marketing suspension agreement.

“This action will complement efforts already under way to ensure that brokers, agents and in-house marketing staff are appropriately trained and give beneficiaries additional assurances that they will have accurate, clear and useful information they need to understand their choices,” AHIP President Karen Ignagni says.

AHIP has asked federal officials and the National Association of Insurance Commissioners, Kansas City, Mo., to develop a reporting mechanism that will help plans to give states information about the brokers and agents selling private Medicare plan coverage, Ignagni says.

AHIP also is asking for a mechanism that plans can use to report serious producer misconduct, Ignagni says.

Several carriers put out statements of their own about the suspension agreement.

Universal American says it already has made most of the required changes.

“We believe that are our agents and brokers endeavor to act in the best interests of Medicare beneficiaries and we welcome any improvements to the ways in which this valuable coverage is marketed,” Universal American Chairman Richard Barasch says.

Humana says it already has begun making the changes, and it is emphasizing that the suspension affects only Medicare Advantage private FFS coverage, not the larger Medicare Advantage health maintenance organization program and the Medicare Advantage preferred provider organization program.

Coventry notes that it is “not under investigation or the subject of any corrective action plans or sanctions.”

“These actions are part of ongoing efforts to strengthen marketing practices with independent brokers and agents,” Coventry says.

WellCare notes that it has adopted many new marketing protections of its own, including extensive criminal background screening of prospective agents and post-enrollment outreach calls to all new Medicare plan members.


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