Medicare Oversight May Shift

The addition incorporates of H.R. 3089, the Accountability and Transparency in Medicare Marketing Act of 2009. That bill was introduced earlier this year by Rep. Kathy Castor, D-Fla.

Under current law and policy, state insurance regulators oversee the licensing and solvency of Medicare Advantage plans, but the federal government oversees the marketing. In September 2008, the Centers for Medicare and Medicaid Services adopted regulations that tightened the Medicare Advantage marketing rules. The revisions 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.

The Part D provision is similar to a bill passed by House Democrats soon after they took control of Congress in 2007. The 2007 bill died in the Senate. The provision would strike the Part D “non-interference” clause – a section that prohibits the secretary of the U.S. Department of Health and Human Services from interfering with negotiations between pharmaceutical manufacturers, pharmacies and Part D plan sponsors. The provision would authorize the HHS secretary to negotiate directly with pharmaceutical manufacturers to determine the prices–including discounts, rebates and other price concessions–that Part D plan sponsors could charged for covered drugs.

The negotiated prices would apply beginning in calendar year 2011, and they would not prevent Part D plan sponsors from obtaining further reductions or discounts, according to health care lawyers at McDermott, Will & Emery, Washington.

Health care analysts at Washington Analysis, Washington, rated as a “toss up” the chances that the provision will be included in final health system change package. But, “even if the Senate Finance Committee decides to give the liberals this victory, we think the actual implementation of this authority will be more limited in scope,” the analysts write in a comment on the amendment.