WASHINGTON BUREAU – The Obama administration now says Medicare Advantage carriers can communicate with enrollees about pending legislation – if the carriers first get enrollees’ permission to send them messages about legislative issues.

Medicare Advantage carriers also must get permission before sending enrollees requests to participate in grassroots advocacy efforts, and carriers must use their own money to finance any enrollee legislative outreach campaigns, according to Teresa DeCaro, acting director of the Medicare Drug and Health Plan Contract Administration Group at CMS.

Plan enrollees can provide consent for legislative outreach communications in writing, by telephone or through the Web, DeCaro writes in a memo issued Friday.

Carriers must agree not to use information collected in connection with legislative outreach efforts “to develop, market, or operate lines of business unrelated to their Medicare plan operations,” DeCaro writes.

CMS officials issued the memo as they were backing away from efforts to punish Humana Inc., Louisville, Ky., for a move to communicate with enrollees about the possible effects of health reform legislation on the Medicare Advantage program.

In September, Humana told 900,000 Medicare Advantage enrollees that pending legislation could lead to program cutbacks.

At the time, CMS infuriated health reform opponents and others by issuing what critics called a “gag order” barring Medicare Advantage carrier legislative mailings to plan enrollees.

CMS now has sent Humana a “notice of non-compliance” in response to the mailing.

CMS has concerns about the “inappropriate distribution of marketing material to Medicare enrollees in violation of your organization’s data use agreement with CMS, as well as statutory and regulatory authority and CMS marketing guidelines,” DeCaro writes in the notice.

A message on the envelope told recipients that the envelope contained “important information about your Medicare Advantage plan–open today!” Instead of providing information about Humana Medicare Advantage services, the September mailing “set forth Humana’s views on pending legislation, and called on beneficiaries to write their members of Congress,” DeCaro writes.

But the notice of non-compliance carries no sanctions, and CMS has dropped further efforts to punish Humana.

“A notice of non-compliance” is the lowest level of formal compliance action taken by CMS, CMSspokesman Peter Ashkenaz says.

“The matter is closed with the letter,” Ashkenaz says.

“We are glad the issue has been resolved,” a Humana spokesman says of the CMS notice.

Rep. David Camp, R-Mich., the highest ranking Republican member of the House Ways & Means Committee and an active critic of the original CMS gag order, is welcoming the CMS decision to ease limits on Medicare Advantage carrier communications with enrollees.

“I am relieved that the administration is no longer misusing its regulatory authority to prohibit plans from communicating to seniors factual information about the Medicare cuts in health care reform,” Camp says in a statement.

But “I remain concerned that CMS overstepped in issuing its gag order as a result of undue political pressure to penalize anyone who dare speak out against the Democrats’ health care bill,” Camp says. “We still need to get the answers to how and why this gag order was issued.”

CMS officials continue to argue, in the memo issued Friday and in comments by Ashkenaz, that the annual U.S. Department of Health and Human Services appropriations acts specifically prohibit use of appropriated funds to pay for legislative outreach efforts.

“As a condition of having been granted permission to use and receive beneficiary information from CMS databases, [Medicare Advantage carriers must] restrict the use of Medicare data to those purposes directly related to the administration of the Medicare managed care and/or outpatient prescription drug benefits for which they have contracted with CMS to administer,” DeCaro writes in the CMS memo.

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