Ritter Insurance Marketing

On July 15, 2008, Congress passed into law H.R. 6331, the Medicare Improvements for Patients and Providers Act (MIPPA) of 2008. The following is an explanation of the key components of the Act and its impact on how we market our products. 

 

What are the new sales and marketing provisions in this legislation?

 

The sales and marketing provisions for Medicare Advantage (MA) and Part D plans are virtually identical to the new regulations recently issued by CMS. Note that these provisions are expected to go into effect for 2009 marketing that starts on October 1, 2008.

 

The following are prohibited by H.R. 6331:

 

1. Providing Meals at Promotional and Sales Events

 

Meals can no longer be provided at community, senior and/or expo events. Agents are allowed to offer light refreshments such as soft drinks, coffee, cookies and snacks. Please remember that snacks and any gifts, such as gift certificates or other trinkets, must be kept within the approved CMS nominal value of $15 per prospect, per sales and marketing event.  

 

2. Cold Calling and Door-to-Door Sales

 

The new legislation formally prohibits any unsolicited direct contact with prospective enrollees. Specifically, prohibited activities include door-to-door sales (i.e. meeting with a prospect without an appointment) and cold-calling (i.e. outbound telemarketing without the prospective enrollee initiating contact). Agents can, however, continue to send direct mail communications and respond to business reply cards. Please note that CMS Marketing Guidelines also prohibit agents from sending unsolicited emails to prospective enrollees.

 

3. Cross-selling of non-health related products during marketing of MA and Part D Plans

 

Agents cannot sell a non-health related product, such as an annuity or life insurance plan, at the same time as they sell a Medicare Advantage or Part D plan. If a prospect is interested in these additional products, the agent needs to set up another appointment. Further guidance on the types of products that will be classified as health-related products will be forthcoming.

 

 

 

4. Sales and marketing activities at educational events

 

Agents are barred from making sales presentations or distributing or providing plan applications at educational events. 

 

Other prohibitions:

• Cash, gifts, prizes or monetary rebates as an inducement for enrollment

• Sales and marketing activities in health care settings except in common areas

 

The following sales and marketing activities are limited:

 

A. Marketing appointments with beneficiaries. Appointments with prospects are limited to the scope agreed upon in advance.

 

When making in-person appointments with prospects, agents must disclose and get agreement on the products that will be discussed. This prior agreement must be documented in writing.

 

During the initial appointment or sales meeting, agents may leave plan brochures regarding the other products or lines of business but may not discuss or conduct marketing activities related to these products.  Enrollment applications for these other products or lines of business may not be included in any materials provided to the prospect during the initial appointment.

 

B. Offering of gifts and other promotional items at promotional activities. The total of all gifts, giveaways, snacks, and refreshments is limited to a nominal value.

 

Currently, CMS defines nominal value as $15. All snacks and gifts at promotional events must be limited to under $15 per prospect, per sales and marketing event.

 

Other Limitations:

 

• Compensation for agents and brokers: The Secretary of Health and Human Services is to establish compensation guidelines to create incentives for agents and brokers to enroll individuals in the plans that best meet their health needs. 

 

CMS is currently in the process of defining these compensation guidelines. It is expected that these new guidelines will prevent Plans from providing agents with different commissions for different plans and MA products (i.e. a higher commission for a SNP plan versus a PFFS plan) and from providing agents with a significant first year commission that could encourage “churning.” Once CMS has issued these guidelines, we will update our commission structure as appropriate. Look for additional information on this topic soon.

 

• Agent training and testing: Plans must use agents and brokers that have completed an initial training and testing program, as well as an annual retraining and testing program.

 

Our agent training and testing program is already in place and compliant with the requirements in this new Medicare law. 

 

• Collaboration with states:

 

• Plan sponsors may only use agents and brokers who are licensed under state law to sell the MA or Part D product.
• Plan sponsors must abide by state appointment laws.
• Plan sponsors must report to the applicable state the termination of any agent or broker and the reasons for such termination, as required under applicable state law.
• Plan sponsors must comply with a state’s request for information about the performance of a licensed agent, broker or third party as part of an investigation by the state into his/her conduct.

 

What are the changes to the Private-Fee-For-Service program?

 

Beginning in 2011, individual PFFS plans in counties with two or more network-based MA plans may no longer use “deeming” to access providers. These plans must develop contracted provider networks and meet access to care requirements. Depending on the transition rules (which CMS will need to develop), this may trigger more than 1.7 million current PFFS plan enrollees into the buying process.

 

In addition, non-network PFFS employer/group plans will no longer be allowed in any markets beginning in 2011. 

 

What is happening with Special Needs Plans (SNP)?

 

The SNP program is extended through 2010, and the moratorium on expansion has been lifted for chronic and institutional SNPs. Dual SNPs can expand as well, if they have a contract with the state Medicaid agency.

 

The legislation also tightens the guidelines for SNPs. Disproportionate share, wherein a certain percentage of membership does not have the qualifying condition (medical, dual eligible, or institutionalized), is eliminated.  Also, enrollment requirements for chronic SNPs will be stricter. To support this requirement, agents should be even more diligent in verifying eligibility for these programs, including being sure to provide the relevant provider information to support chronic illness verification.

 

What are the new provisions that affect the Part D program?

 

Beginning in 2013, the classes of barbiturates (for certain conditions) and benzodiazepines are included as covered Part D drugs.  For pharmacies, there is a “prompt pay” provision beginning in 2010 which requires prescription drug plans to pay pharmacies within 14 days for clean claims submitted electronically and 30 days for clean claims submitted otherwise.  Also, the legislation encourages providers to use electronic prescribing.

 

What are the changes to Medicare Supplement?

 

This legislation directs the Secretary of Health and Human Services to implement the revised Medicare Supplement benefit standard as approved by the National Association of Insurance Commissioners (NAIC) on March 11, 2007. The bill also includes a provision that would require wrap-around policies that cover deductibles, coinsurance, co-payments and other cost sharing amounts applicable under Medicare Advantage plans to be regulated as Medicare Supplement products.

 

What happens next? 

 

We expect to receive additional guidance from CMS within the next several weeks that will finalize this document.  We will then update this document and redistribute.