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AHIP Offers Senate Panel Proposals To Tighten Medicare Advantage Marketing

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Legislation tightening regulatory oversight at both the federal and state level of the marketing of Medicare Advantage plans appears more likely as a result of a meeting of minds between industry leadership and members of the key Senate Finance Committee last week.

Specifically, at a meeting with the committee March 4, the board of America’s Health Insurance Plans presented proposals accepted by the full committee for legislative provisions that will curb the use of more aggressive techniques in the marketing of Medicare Advantage plans.

That constitutes a key reversal from prior AHIP policy, and undermines the adamant position of the Bush administration.

The AHIP board also said it would support creation of a process for a state to trigger a CMS targeted audit of marketing activities. Specifically, the AHIP board said it would accept provisions in legislation that would prohibit “cold calls” by agents and the offering of financial inducements to pressure seniors.

The provisions were accepted in principle by the panel and will be incorporated into Medicare legislation currently being drafted, said Sen. Max Baucus, D-Mont., after the meeting.

Baucus expects to bring the legislation forward for consideration this spring.

The fact that the AHIP board agreed to the consumer protections and all members of the committee were involved in the talks is critical because Republicans in Congress as well as the White House have stymied efforts by Democrats in both the House and the Senate over the past 15 months to impose curbs on the more aggressive techniques used to sell Medicare Advantage plans.

The AHIP board issued a statement in advance of the meeting that said its proposal indicates “its strong commitment to serving seniors in Medicare and to advocate that more be done through this process to advance consumer protections.”

AHIP said its members will also support provisions requiring Medicare Advantage and Part D plans to comply with state information requests about the performance of a licensed agent or broker as part of a state investigation into the individual’s conduct.

Specifically, AHIP supports the appointment of agents and brokers marketing Medicare Advantage and Part D plans consistent with state law so state insurance regulators know which company an agent or broker is marketing for and can act quickly to address any inquiries or abuses.

Regarding state regulation, the AHIP board said in the meeting with the Finance Committee that it would recommend that states be provided with additional tools to monitor sales activities and address market conduct issues.

To ensure that compensation arrangements do not provide incentives for inappropriate marketing activities, AHIP also said it would support regulations that will reform agent compensation structures to better protect consumers.

The new AHIP position supports requiring the Centers for Medicare and Medicaid Services to consult with the National Association of Insurance Commissioners and other stakeholders on new requirements for agent commissions.

In addition to prohibitions on cold calls, door-to-door marketing and financial inducements for seniors, AHIP’s proposals include better training of sales agents and stronger oversight at the local level, among other measures.

At the same time, Baucus said his bill will include language on marketing curbs beyond those suggested by the AHIP board. Baucus said additional provisions that he will include in his legislation “so that seniors are fully protected,” include:

–A prohibition on agents suggesting home visits to seniors. Home visits should only be allowed pursuant to seniors’ express requests.

–A prohibition on gifts or meals used to entice seniors to listen to sales presentations.

–Oversight authority to monitor and enforce senior protections at the state level to compensate for a lack of oversight by the CMS.

“I intend to write these and other protections for seniors into law with my Medicare bill this year,” Baucus said after meeting with the AHIP board. “The members of the Finance Committee are clearly committed to working together and will seek to work with insurers, where appropriate, to make sure seniors aren’t victimized by unscrupulous agents.”

In the meeting, Baucus also reiterated his concern regarding private Medicare Advantage providers that tie their agents’ bonus and compensation to the total number of approved applications, rather than to ensuring that consumers have the appropriate plan and coverage.

Commenting on the meeting, Karen Ignagni, president and CEO of AHIP, said the AHIP board wanted to send a strong message to Medicare beneficiaries that health insurance plans are calling for more government regulation to enhance consumer protections for every beneficiary who is considering Medicare Advantage or Medicare prescription drug plans.

“Seniors need to have complete confidence that they will be given the information they need to make the Medicare coverage decision that is best for them,” Ignagni said. “Moreover, our members want to ensure that seniors will be given accurate information in an environment that further enhances safeguards to protect beneficiaries from unscrupulous marketing practices.”


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