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Medicare Advantage Marketing

In This Article:

• Common Marketing Messages
• Private Fee-for-Service Marketing - Guidance
• Private Fee-for-Service Marketing Rules - Summary
• SEPs to Remedy Medicare Advantage Marketing Abuses or Violations

SEPs to Remedy Medicare Advantage Marketing Abuses or Violations

In June 2007, CMS announced a Special Enrollment Period (SEP) for certain Medicare Advantage members.

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This SEP is for Medicare Advantage plan members who were enrolled in a Private Fee-for-Service or other type of Medicare Advantage plan as a result of receiving misleading or incorrect information from plan sales agents, brokers or employees. CMS states that beneficiaries should call 1-800-MEDICARE in order to find out if they are eligible for this SEP.

According to CMS, 1-800-MEDICARE representatives would be able to grant the SEP if beneficiaries described the incorrect or misleading information the plan sales rep gave them. For example, beneficiaries might report that a PFFS plan sales representative alleged that a PFFS plan is like a Medigap policy, or that a member could see any provider in the country – without further explaining that providers can decline to accept PFFS plan terms and conditions merely by refusing to see PFFS plan members. Since CMS has determined that these are incorrect and misleading statements, the 1-800-MEDICARE operators should be able to grant the SEP.

Remember that disenrollment from a Medicare Advantage plan under these circumstances would likely require reinstatement of enrollment back into the plan enrollees previously belonged to, or back to original Medicare in order to safeguard their access to care. In the latter case, beneficiaries may need help reinstating their previous Medigap plan, or regaining their MSP benefits.

In July 2007, CMS issued a Memorandum (38Kb PDF file) outlining the Special Enrollment Period. Additional CMS information currently available about this SEP is found in a CMS e-mail (24Kb Word file) to the SHIP network and the June 26th CMS National Medicare Training Program audio training Power Point presentation (373Kb PowerPoint file) on Slide Number 23.

Other Related Medicare Advantage SEPs

CMS has long provided two other SEPs for beneficiaries whose Medicare Advantage enrollment was due to misrepresentations by plans or their marketing agents. These older SEPs are described in Chapter 2 of the CMS Medicare Advantage Manual, where they are linked to provisions that provide remedies for adversely affected beneficiaries.

Because these related and longstanding Medicare Advantage SEPs may be applicable to situations involving Medicare Advantage abusive or fraudulent marketing, we thought benefits counselors would want to know more about them.

SEP for Contract Violation

This SEP is for beneficiaries who can prove to CMS that a plan employee or sales agent materially misrepresented the plan during marketing activities. A material misrepresentation is a statement about a very important fact that is misleading and/or erroneous. Examples of material misrepresentation might include exaggerating the scope of a PFFS plan, alleging that a PFFS plan is the same as Medigap, or saying that a member can see any provider in the U.S. These statements are material and are misleading and inaccurate. When beneficiaries enroll in Medicare Advantage plans in reliance upon material misrepresentations about the Medicare Advantage plan, this SEP provides a possible remedy.

This SEP may also be used by plan enrollees who can establish that the plan or an agent substantially violated a material provision of its Medicare Advantage contract. A material provision is a key provision of plan coverage or operation that beneficiaries relied upon in deciding to enroll. Examples might include plans promising to provide a covered service but failing to provide the service, alleging there are no out-of-pocket costs even when cost-sharing is required, or promising an extra benefit that is not actually available.

CMS decides whether or not to grant this SEP, the length of the SEP, and whether to allow a retroactive disenrollment in conjunction with this SEP. Retroactive disenrollment would enable beneficiaries to return to their previous plan, or to Original Medicare. Beneficiaries who return to Original Medicare are guaranteed the right to reinstate any Medigap policy they discontinued when they joined the Medicare Advantage plan.

This SEP is described in Section 30.4.2 of Chapter 2 of the Medicare Advantage Manual, and the Medigap guaranteed issuance provision is in Section 30.4.

SEP for Enrollments That Were Not Legally Valid

Medicare Advantage plan enrollment is not considered by CMS to be legally valid when beneficiaries never intended to enroll. Beneficiaries who did not intend to enroll may be disenrolled through application of this SEP. Evidence of a lack of intent to enroll might include continuing to obtain non-emergency care from out-of-network providers or purchasing a Medigap policy after enrolling in the Medicare Advantage plan. Payment of the plan premiums is not evidence of intent to enroll, because new enrollees might be confused about what type of plan they are paying for. Similarly, using in-network providers is not an indicator of intent to enroll, because most providers see patients from many plans as well as those with Original Medicare.

CMS has the discretion to employ retroactive disenrollment as a remedy for unintended disenrollment. Beneficiaries who return to Original Medicare are guaranteed the right to reinstate any Medigap policy they discontinued when they joined the Medicare Advantage plan.

This SEP is described in Section 40.6 of Chapter 2, the Enrollment and Disenrollment chapter of the Medicare Advantage Manual, and the Medigap guaranteed issuance provision is in Section 30.4.

Private Fee-for-Service Marketing - Guidance

CMS issued a new guidance (74Kb PDF file) in June 2007 about marketing and enrollment practices for Medicare Advantage plans offering private fee-for-service (PFFS) plans. CMS’s directions to plans may give you important new tools to help you in your education and counseling activities. Here are summaries of key changes that CMS is requiring PFFS plans to implement as well as several best practices CMS encourages PFFS plans to adopt:

Private Fee-for-Service Marketing and Enrollment Requirements:

Newly Prohibited Marketing Language

Effective immediately, marketing language and materials about PFFS plans are prohibited from stating that these plans are Medicare supplement replacements. Moreover, they are precluded from implying that PFFS plans replace Medigap policies.

Mandatory Disclaimer for Print Materials

All advertisements and pre-enrollment materials given to interested beneficiaries must include required language explaining that providers are allowed to decide prior to each patient encounter whether or not to treat members.

Remember that by offering treatment to plan members, providers are deemed to have accepted plan terms and conditions for that patient encounter, including payment terms and rates. The explanation about this provider option must also be included in all public sales events and private meetings with prospective enrollees.

Mandatory Information

• All Medicare Advantage plans must give a complete description of plan rules, including provider choices with PFFS plans to decide prior to each patient encounter whether or not to treat or decline to treat the member. CMS has created a template brochure (42Kb Word file) for this purpose.

• List of Events

  PFFS plans must give their Regional CMS office a monthly list of marketing and sales events by the 20th day of the preceding month, effective as of June 2007. The list must be certified as accurate by an organizational Medicare vice president or director. This means that by June 20, 2007, PFFS plans had to send their July list of events to their CMS Regional Office.

• Outbound post-enrollment verification phone calls

  Within 10 calendar days of PFFS enrollment request submissions, plans must contact the enrollees to verify that they understand the PFFS plan rules, including provider option to decide prior to each patient encounter whether or not to treat the member. These calls may not be made at the point of submission of the enrollment request, and sales personnel are not allowed to make these calls. Moreover, CMS directs plans to insure that sales personnel are not present when the outbound calls are made.

  CMS recommends immediate implementation of such verification calls and has provided plans with a model script (55Kb Word file). The verification call process is required as of October 2007, when plans are permitted to begin marketing 2008 PFFS plans.

Private Fee-for-Service Plan Best Practices

CMS notes several best practices that PFFS plans are encouraged to adopt.

• Provider Education about PFFS Plans

  CMS has required PFFS plans to make staff available to respond to provider questions about plan terms and conditions. Now CMS is urging plans to develop provider education processes and materials. To further assist with provider education about PFFS plans, CMS has created a model provider education kit (129Kb Word file) that plans can send to providers that have billed the plan or called the plan for billing information.

  Additionally, CMS has posted PFFS plan terms and conditions contact information. This information is to be updated monthly.

• Specific PFFS presentation language

  CMS has developed PFFS-specific marketing language (39Kb Word file). The language clarifies the differences between PFFS plans and more traditional Medicare Advantage plans and also emphasizes the option of providers to decide prior to each patient encounter whether or not to treat or decline to treat the members"

• Broker and Agent Training On March 6, 2008, CMS advised Medicare Advantage plans of recommended practices for training brokers and commissioned agents selling Medicare Advantage products. These practices include training both in-house and commissioned agents identically tro sell Medicare Advantage products, annual refreshers for all agents and brokers. Moreover CMS expressed a "strong" recommendation that plan sponsors self-assess their training policies and procedures. CMS provided a recommended list of Private Fee for Service plan topics that would represent comprehensive training curriculum on for agents and brokers.

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Private Fee-for-Service Marketing Rules - Summary

In August 2007, CMS issued a concise consumer-oriented summary of key marketing rules (21Kb PDF file) with which Private Fee-for-Service plans must comply.

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Common Marketing Messages

Here are some Private Fee-for Service marketing messages that should be curtailed under the Medicare Advantage marketing rules.

• “You can see any doctor you want to.”

  Members of Private Fee-for-Service (PFFS) plans may see any Medicare provider anywhere in the country that agrees to accept the plan terms and conditions.

  Providers can decide whether or not to accept the patient on each encounter so it is important for members to check with their providers every time they come in to make sure the provider will still treat them. Providers are allowed to decline to treat PFFS plan members even if they are accepting Original Medicare patients. Private Fee-for Service plan marketing must explain these distinctions and may not claim that members can see any doctor.

• “Now that you can see what a great product this is, wouldn’t you like for me to visit with all of your neighbors in this senior complex?”

  Door-to-door “cold” calls are prohibited by the CMS Marketing Guidance. Sales representatives may not obtain permission from one resident to call on others who live in a housing development, apartment building, or other residential setting in order to market a Medicare Advantage or Part D plan. Violations of this rule may be reported to your Senior Medicare Patrol, your Regional CMS office, and your state’s Insurance Department.

• “Just sign here to get a lot more valuable information.”

  Some unscrupulous insurance sales representatives have reportedly enrolled people into PFFS and other Medicare Advantage plans by mis-representing an enrollment as a request for more information.

  It is always the best practice to NOT sign anything without reading carefully to make sure you know what you are signing! When you meet beneficiaries who were enrolled into a PFFS plan without their knowledge or express consent, there are ways to help that person disenroll.

• “This is just like Original Medicare, but you save a lot of money.”

  Salespeople are not permitted to claim that Private Fee-for-Service plans are “just like Original Medicare. Moreover, no general rule can be applied to all Medicare beneficiaries with respect to how much they might save by joining a Medicare Advantage plan rather than remaining on Original Medicare with a Medigap policy.

  The only way to ascertain this is to calculate anticipated out-of-pocket expenditures on plan premium charges, deductibles and co-payments. Then compare anticipated expenses for various plans against Original Medicare with a Medigap.

  While nobody can fully predict their future health status and therefore, these calculations can only yield estimates, it may be possible to see comparative anticipated costs and from there to derive the potential for savings or for higher costs.

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