On Nov. 19, 2010, CMS issued a press release on its website announcing that it was placing three Medicare Advantage carriers on marketing sanctions: Health Net, Arcadian, and Universal American. The Health Net sanctions stem from issues with claims processing for Medicare prescription drug benefits; Arcadian and Universal American are under the microscope for alleged violations of the CMS marketing guidelines.
Health Net's sanctions took effect on Nov.19, and Arcadian and Universal American's on Dec. 5. The disciplinary action did not include Universal American's standalone Part D plan, Community CCRx, though Health Net was restricted from accepting new enrollments for its standalone Part D plan, Health Net Orange. In addition to prohibiting new enrollments, the sanctions stated that these companies would not be able to accept plan changes on Medicare Advantage products.
CMS' action does not affect the companies' existing membership, nor does it impact agent commissions on existing or new business submitted before the sanctions took effect.
In the cases of Arcadian and Universal American, CMS referenced their "partners" as detecting the marketing violations. This is likely related to the CMS secret shopping program that was greatly expanded in 2010 – and since PPACA included funds to expand CMS' oversight of Medicare Advantage and Part D carriers, we should expect secret shopping activities to grow in the future.
What this means for you
Medicare Advantage and Part D carriers are responsible for the activity of each of their downstream agents, including independently contracted agents. Therefore, it's important for all agents selling these products to know how to conduct a compliant sales presentation.
Below are some tips to help you avoid CMS marketing violations and complaints. This isn't meant to be an exhaustive list, but it will protect you from the most common pitfalls.
1. Ensure that your client or prospect has a clear understanding of the differences between the original Medicare/Medicare supplement and Medicare Advantage.
Among the CMS complaints I've seen filed, one of the most fundamental mistakes involves the difference between the Medicare Advantage and original Medicare systems. In order to avoid these complaints, beneficiaries must have a clear understanding of how Medicare Advantage works. Agents need to be clear that Medicare Advantage works differently than original Medicare, while also letting clients know that they are not leaving Medicare, and that they maintain all of their Medicare rights and protections.
A key difference between the plans is found in the way Medicare beneficiaries access their benefits under Medicare Advantage. While Medicare Advantage covers all the same services as original Medicare, there are two primary differences in how the benefits work. First, MA's cost-sharing for each type of service (doctor's office visits, inpatient hospitalization, etc.) can, and likely will, be different than original Medicare. Second, MA's network of medical providers (or the level of access to providers) will be more restrictive than original Medicare. Medicare Advantage can offer benefits above and beyond original Medicare (such as caps on out-of-pocket spending, enhanced preventive benefits, dental, hearing, vision, transportation, nurse hotlines, coordination of care, gym memberships, etc.); however, these extra benefits come at the price of using the Medicare Advantage plan's network.
An easy way to illustrate this is to tell your client that when they access medical services, they will use the card issued by the MA plan rather than their Medicare card. This reinforces the idea that while they are still in the Medicare system, Medicare Advantage works differently.
2. Follow your Medicare Advantage plan's CMS-approved client presentation.
