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Regulation and Compliance > State Regulation

CMS Proposes Medicare Rules

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The Centers for Medicare and Medicaid Services has unveiled a draft of strict new Medicare Advantage and Medicare Part D prescription drug plan regulations.

The draft regulations also would:

- Set new standards for agents selling Medicare Advantage programs.

- Subject Medicare Advantage plan agents to state oversight.

- Give CMS the authority to fine an insurer up to $25,000 per beneficiary if an agent violated the new rules.

- Revise procedures affecting how carriers handle members of special needs plans and low-income prescription drug plan members.

The marketing provisions of the proposal would require that insurers selling Medicare Advantage and Medicare drug plans through independent agents stick with state-licensed agents. Medicare Advantage carriers would have to report to states, “in a manner consistent with state appointment laws,” that they are using state-licensed agents, according to the text of the draft regulations.

The marketing provisions also would bar door-to-door marketing and cold-calling, and they would tighten the rules governing commissions for independent agents and brokers.

The proposed commission rules appear to be stricter than rules that members of America’s Health Insurance Plans, Washington, suggested in March.

Carriers would have to offer level commissions for different products and years.

The CMS added the level-commission rules to prevent churning, according to Abby Block, director of the CMS Center for Beneficiary Choices and Medicaid Services.

“There won’t be the kinds of incentives in the market that there are now for brokers and agents” to persuade clients to change plans, Block says.

Proposed restrictions on face-to-face marketing would prohibit agents from waiting in the parking lot of a senior center or in any place, such as a waiting room, where a senior intends to receive health care.

The regulations would limit the value of promotional items given to a potential client, such as snacks and water bottles, to $15.

Other sections in the proposed regulations deal with topics such as efforts to improve the services provided by Medicare special needs plans.

Most of the rules already have been implemented through operational guidance, according to Kerry Weems, the acting CMS administrator.

The CMS is hoping a final rule will be in place before Oct. 1, when Medicare plan open enrollment begins, Weems says.

Although the proposed regulations would give states oversight authority over Medicare plan agents, the proposed rules would not give states any regulatory authority to take action against agents in response to a complaint, Weems says.

The CMS has a “memorandum of understanding with almost every state” that would encourage the state to forward any complaints to CMS regulators, Weems says.

Members of the Senate Finance Committee have taken an interest in Medicare plan marketing, and the CMS will be briefing committee members to see if the proposed regulations will satisfy members’ concerns, Weems said.

AHIP President Karen Ignagni says AHIP is still reviewing the proposed regulations and developing detailed comments.


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