Health Care Legal Update September 2007
Medicare Advantage Plan Marketing Do's and Don'ts
The Centers for Medicare and Medicaid Services ("CMS") is keeping a watchful eye on improper marketing activities with regard to the Medicare Advantage product. CMS has received numerous complaints about aggressive sales tactics being used by some plans, agents and brokers. Among the activities complained of are misrepresentation of benefits coverage and door-to-door solicitation. There have also been reports that some sales agents represented themselves as being employees of the federal government. Penalties for non-compliance with Medicare marketing rules are severe. CMS has issued stern warnings to some plans and several Medicare Advantage Plans have had to shut down their sales operations because of inappropriate sales and marketing agent activity. CMS has indicated that enforcement actions may be pursued if the marketing activities are in violation of federal rules and regulations. Don't risk millions of dollars in lost revenues, disrupted operations and CMS fines and penalties. Protect your Medicare beneficiaries, your Medicare Advantage Plan reputation, and your bottom line by educating and training your staff, agents and brokers regarding the permissible and impermissible Medicare Advantage marketing practices listed below.
Health Plan Promotional Activities
Medicare Advantage Plans can advertise to Medicare beneficiaries in a variety of ways, including:
- Direct mail (i.e., postcards, reply cards), but Plans cannot include enrollment forms
- Television advertisements
- Radio advertisements
- Outdoor advertising (i.e., billboards)
- Banners
- Print advertisements (i.e., newspaper, magazine, flyers, posters, brochures)
- Internet advertisements
- Telephone, but plans cannot enroll beneficiaries over the telephones and plans cannot ask for financial or personal information over the telephone
Medicare Advantage Health Plans can also:
- Conduct sales presentations
- Distribute and accept enrollment applications
- Educate potential enrollees at health fairs
- Schedule appointments with beneficiaries upon request (including those in long-term care settings)
- Offer gifts to potential enrollees if they attend a marketing presentation as long as the gifts are of nominal value and are provided whether or not the individual enrolls in the plan
- Offer a drawing, prize or giveaway of any value to the general public as long as it is not routinely or frequently awarded (as long as there is no obligation to enroll in the plan in order to win the gift)
- Offer gifts of nominal value for patient referrals as long as the gift is available to all members and is not conditioned on actual enrollment of the person being referred
- Provide objective information regarding specific plans, such as covered benefits, cost sharing, and utilization management tools
- Distribute marketing materials
- Offer health-related or non health-related "value added items and services" to plan members
Medicare Advantage Health Plans cannot:
- Offer cash gifts - including charitable contributions, gift certificates or gift cards that can be readily converted to cash
- Offer inducements to persuade beneficiaries to enroll in a particular plan or organization
- Offer anything of value to induce potential plan enrollees to select them as their Medicare Advantage Plan
- Conduct sales presentations and distribute and accept enrollment applications in areas of health care settings where patients primarily intend to receive health care services
- Conduct door to door marketing (unless invited)
Health Plan Employee/Independent Contractor Sales and Marketing Agents
Medicare Advantage Health Plan Sales and Marketing Agents must:
- Use marketing materials that have been reviewed and approved by CMS
- Comply with the "Do not call registry;" honor "do not call" requests and abide by calling hours set forth in Federal and State law
- Provide information in a professional manner
- Ensure that sales and marketing agents have received training regarding compliance with CMS rules and regulations
- Use state-licensed, certified, or registered individuals to market plans (if the state requires it)
- Ensure that a marketing agent clearly identifies the types of products the marketing agent will discuss prior to marketing to a potential enrollee, if the marketing agent meets with the potential enrollee
Medicare Advantage Health Plan Sales and Marketing Agents cannot:
- Solicit Medicare beneficiaries door-to-door (unless invited)
- Imply that a face-to-face meeting is required for a beneficiary to receive information about a Medicare Advantage Plan
- Send unsolicited email
- Enroll beneficiaries through outbound telemarketing
- Offer cash payment as an inducement to enroll
- Misrepresent or use high pressure sales tactics
- Engage in any activity which a Medicare Advantage Plan is prohibited from engaging in
Provider Promotional Activities
Providers, such as physicians (including IPAs, medical groups and individual physicians), hospitals, long-term care facilities, and pharmacies, can educate their patients/clients, by presenting objective information about Medicare Advantage plans.
In presenting such objective information, Providers can:
- Provide the names of plans which they contract and/or participate
- Provide information and assistance in applying for the low income subsidy
- Provide objective information on specific plan formularies, based on a particular patient's medications and health care needs
- Provide objective information regarding specific plans, such as covered benefits, cost sharing, and utilization management tools
- Distribute marketing materials, excluding Medicare Advantage Plan enrollment application forms
- Refer patients to other sources of information and/or print out and share information from CMS's website
- Use comparative marketing materials comparing plan information created by a third-party who doesn't provide benefits or health care services
- Display posters or other materials that advertise their relationship with the plans
- Help beneficiaries enroll in a plan that "best meets the beneficiaries' needs"
Providers cannot:
- Direct, urge, or attempt to persuade any prospective enrollee to enroll in a particular plan or to insure with a particular company based on financial or any other interest of the provider (or subcontractor)
- Collect enrollment applications
- Offer inducements to persuade beneficiaries to enroll in a particular plan or organization
- Health screen when distributing information to patients, as health screening is a prohibited marketing activity
- Offer anything of value to induce plan enrollees to select them as their provider
- Expect compensation in consideration for the enrollment of a beneficiary
- Expect compensation directly or indirectly from the plan for beneficiary enrollment activities
CMS recommends that Medicare Advantage Plans develop policies and procedures, implement training programs, and dedicate staff to overseeing sales agents and brokers. Our firm has assisted numerous clients with Medicare Advantage Plan state license applications, federal contract applications, the development of policies, procedures, compliance plans and sales agent/broker training programs, and general compliance with Medicare Advantage rules and regulations.
If you require our assistance or have any questions please contact Michael Dowell at mdowell@tocounsel.com or the lawyer in the firm who generally handles your health care legal matters.