CMS Adopts Medicare Marketing Rules

By Arthur D. Postal

September 15, 2008 at 07:55 AM

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The federal Centers for Medicare and Medicaid Services today released final regulations that will tighten the rules for agents selling Medicare Advantage plans.

The final regulations include strong prohibitions against use of unsolicited sales contacts, such as unsolicited telemarketing calls.

The final regulations also bar insurers from offering financial incentives that could encourage agents and brokers to maximize commissions by inappropriately moving, or churning, beneficiaries from one plan to another.

Another section of the regulations requires Medicare Advantage plan agents and brokers to be licensed and appointed in accordance with state laws.

Insurers and producers that market Medicare Advantage plans must comply with the new rules by Oct. 1.

In related news, CMS:

- Has issued an interim final rule that would implement other provisions of a new Medicare law.

CMS officials say the guidelines are designed to prevent churning and are based on existing industry standards for agent and broker compensation structure.

- Says it will conduct 3 times as many Medicare Advantage plan "secret shopper" investigations as it has been conducting in recent years.

The CMS officials who handle the secret shopper investigations pose as prospective enrollees and monitor sales agents' presentations for inaccurate information and prohibited sales tactics.

- Says it wants to ramp up reviews of Medicare Advantage plans' local print and broadcast advertisements and review more recordings of enrollment calls.

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