The head of the Centers for Medicare and Medicaid Services promised today that CMS will take swift action to root out abusive Medicare Advantage plan sales practices.

Acting CMS Administrator Kerry Weems told the Senate Finance Committee that CMS will release new administrative guidance in “the coming weeks” that will address topics such as contact between agents and beneficiaries and mechanisms for CMS and state regulators to share information about agents.

But Sen. Max Baucus, D-Mont., the chairman of the Senate Finance Committee, opened the hearing by asking whether simply issuing guidance will be enough to end abusive sales practices.

At an earlier committee hearing on Medicare plan sales practices, 3 witnesses “shared the same story,” Baucus said. “Private plans and their agents are pushing private Medicare plans using methods that are aggressive and, too often, abusive or fraudulent. CMS guidelines are just not enough to stop the abuses.”

Weems said CMS already has undertaken other measures to ensure fair sales practices are being used, including introducing a “secret shopper” program that he has personally taken part in.

CMS auditors were present at 240 marketing events sponsored by 30 different plans across 39 jurisdictions, and they identified 696 violations, Weems said.

“CMS took swift action to address high-risk issues and help prevent further deficiencies,” Weems said, adding that one plan was placed under a marketing and enrollment freeze throughout the 2007 open enrollment period while two others were required to adopt corrective action plans.

Weems said he himself saw a consumer at a Medicare plan marketing event in Virginia ask why the plan would call consumers to confirm the consumers’ intent to join the plan.

The agent responded that, “We know CMS is watching,” Weems reported.

Baucus countered by arguing that the actions taken by CMS to date have not been enough.

A representative for Humana Inc., Louisville, Ky., one of the largest plan sponsors, offered recommendations for additional action by CMS at an earlier hearing, Baucus said.

The Humana recommendations were “a signal that you’re not doing enough,” to combat sales problems, Baucus said.

“We’re not getting complaints from plans saying, ‘Hey, get CMS off our backs,’” Baucus said. “In fact it’s just the opposite.”

Weems replied that plans seeking more oversight “will likely get their wish.”

Hearing participants also talked about the possibility of letting state regulators oversee Medicare plan agents, and about S. 1883, a bill that could give state regulators authority over Medicare plan agents.

CMS, and the Bush administration, might not agree with every aspect of S. 1883, “but we support the spirit of S. 1883,” Weems said.

If Congress wants CMS to give states Medicare plan enforcement power, it needs to provide the funding to make that possible, Weems said.

“This kind of help isn’t going to come for free,” Weems said.

State regulators already regulate agents selling Medicare supplement, or “Medigap,” plans, but “Medigap plans are uniform plans and therefore much easier for states to regulate,” Weems said.

In addition, carriers might find it too difficult to cope with variations in state regulatory requirements, Weems said.

Another issue that came up during the hearing was the State Children’s Health Insurance Program.

A CMS directive makes it more difficult for state to insure children in families with annual income over 250% of the federal poverty level.

Sen. John Rockefeller, D-W. Va., took Weems to task, saying the authority CMS exercised in issuing the guidance “went well beyond the intent of Congress, and the law.”

“You know it, [Health and Human Service Secretary Michael] Leavitt knows it, and I’m sure that the president doesn’t know it and wouldn’t be interested if he was told,” Rockefeller said.

Weems responded that CMS “took this action because we believe we had the authority to do so,” and added that it is not uncommon for CMS to issue guidance by sending out letters rather than through engaging in a formal regulatory process.