CMS Chief Vows To Toughen Medicare Plan Sales Standards

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.”