May 12, 2008
By C. Brooks Newman*
On May 8, 2008, The Centers for Medicare & Medicaid Services (CMS) issued proposed regulations intended to enhance protections for beneficiaries who are enrolled in Medicare Advantage (MA) health plans and Medicare prescription drug plans. According to CMS' press release, its actions "will strengthen marketing standards and extend additional protections to all beneficiaries including those receiving the low-income subsidy (LIS) and beneficiaries enrolled in special needs plans."
The proposed rule would incorporate into regulation a number of requirements that CMS previously imposed through operational guidance. It also would introduce several new MA and prescription drug plan requirements.
The proposed rule contains plan marketing standards that would:
- Prohibit cold-calling and expand the current prohibition on door-to-door solicitation to cover other unsolicited circumstances. Any appointment with a beneficiary to market healthcare-related products would have to be limited to the scope that the beneficiary agreed to in advance. Cross-selling of non-healthcare-related products to a prospective MA or Part D enrollee would also be prohibited.
- Prohibit sales activities at educational events such as health information fairs and community meetings, or in areas such as waiting rooms where patients primarily intend to receive healthcare-related services, as well as limit the value and type of promotional items offered to potential enrollees.
- Require that MA organizations that use independent agents to market MA and Part D plans use State-licensed agents for such marketing, and require that MA organizations report to States, in a manner consistent with State appointment laws, that they are using those agents.
- Require MA organizations to establish commission structures for sales agents and brokers that are level across all years and across all MA plan product types (for example, HMOs, PPOs, and private fee-for-service plans). Commission structures for prescription drug plans would have to be level across the sponsors' plans as well.
Low Income and Beneficiary Liability Standards
The proposed rule contains provisions to streamline eligibility determinations for extra help and limit beneficiary liability that would:
- Codify earlier guidance to plan sponsors about using "best available evidence" (BAE) to determine an enrollee's eligibility for extra help through the LIS program. Recognizing that the monthly files from the States and the Social Security Administration that Medicare uses to establish LIS eligibility sometimes do not reflect an applicant's current eligibility status, the regulation would require Part D sponsors to use the CMS-developed BAE process to establish the appropriate cost-sharing for low-income beneficiaries whose information in CMS systems is not correct or up to date.
- Establish other premium and cost sharing protections related to the Social Security premium withholding and point-of-sale drug prices.
Special Needs Plan Standards
The rule also proposes new protections for beneficiaries enrolled in special needs plans (SNPs). Provisions in the proposed rule would:
- Require that 90 percent of new enrollees in SNPs be special needs individuals, to ensure that SNPs focus on the population for which these MA plans are designed.
- More clearly establish and clarify delivery of care standards for SNPs.
- Prohibit beneficiaries from being billed for cost-sharing that is not their responsibility. For SNPs intended for beneficiaries who are eligible for both Medicare and Medicaid, the rule would establish standards designed to ensure that those beneficiaries are able to access essential services that are available through Medicaid in addition to those benefits available through the SNP.
The rule would clarify one approach to calculating civil monetary penalties against Medicare Advantage or Part D plans that violate Medicare rules in ways that adversely affect beneficiaries. Under the proposal, CMS would have greater flexibility in determining penalty amounts and would have clear authority to levy a penalty of up to $25,000 for each enrollee affected, or likely to be affected, by the violation.
Comments must be submitted to CMS by 5:00 pm Eastern time on July 15, 2008.
Access a copy of the proposed regulation on CMS' website.
*We would like to thank C. Brooks Newman, Esquire (Humana Inc., Louisville, KY) for writing this email alert.