I’ve had the opportunity to review the 2013 Medicare Marketing Guidelines, so I wanted to share my thoughts on the MMG. Primarily, this review is through the lens of the external agent or broker, but I’ve included some information on changes that won’t impact the agent day-to-day, but which might be “nice to know”.
Here is a link to the 2013 MMG.
Section 70.5, 70.6 and 70.7 (pages 49-51) provide the information on marketing through unsolicited contacts. These are some of the most important sections for an agent to understand and closely watched by CMS. I recommend any agents who are selling either Medicare advantage or Part D Medicare products review these 3 sections at least a couple times.
All of Section 120 (pages 87-94) is important for agents to understand, so I recommend reviewing this entire section thoroughly. I will call out a few specific sections that are particularly noteworthy.
Section 120.2 (page 87) directs health plans to terminate agents (and report to the state Department of Insurance) who submit enrollment applications without holding an insurance license in the state where the Medicare beneficiary resides.
Sections 120.4 including 120.4.1through 120.4.7 deal with agent compensation, so it’s important for agents to understand how they will be paid. It’s also important to know when they will be charged back commissions (section 120.4.6 gives the situations where a disenrollment in the first 3 months should NOT be considered a rapid disenrollment.)
Section 120.4.4 deals with developing and implementing a compensation strategy. The first bullet talks about what CMS defines as first year commission versus renewal. This, in my opinion, has been handled erratically by health plans. CMS instructs that if a Medicare beneficiary enters a plan effective September 1st (for example) of 2012, the RENEWAL payments should begin in January of the following year (January 2013 in this example). I’m still hearing about plans that wait until the plan has been in force for 1 year before paying renewals. Note that CMS gives plans discretion (with regard to the initial payment) to either (1) pay the full initial commission or (2) pay a pro-rated amount based on the number of months which the beneficiary was enrolled.
The first bullet on page 91 deals with movement from an employer group Medicare advantage plan (Series 800) to an individual Medicare advantage plan. This movement should create an INITIAL commission for the agent.
The fourth bullet on page 91 is interesting in that a Health Plan is able to consider an external broker the same as an “employed agent” if the external broker only represents ONE PLAN exclusively. This means that the HP is not bound by CMS compensation guidelines.
The last bullet on page 91 deals with when a plan (OR AGENT) elect to terminate their contracts and how existing renewal compensation is handled. Many plans will not pay renewal compensation if an agent is terminated (even if “not for cause”), because of CMS’ “in good standing rules”. This section, however, indicates that the terms of the contract can dictate remaining cycle year renewals. This makes me believe plans may have more discretion than I previously thought.
Section 30.12 directs health plans to include their Overall Star Ratings for the plan in 3 locations: on their website, on the Summary of Benefits and on the Enrollment Form. There continues to be a quality focus on Medicare advantage plans and CMS will continue to highlight Star Ratings as a measure of quality.
Sections 40.8 and 40.8.1 provide guidance for the listing of telephone numbers. Section 40.8 improves the readability of Marketing pieces in that the Hours of Operation only needs to be listed once on a marketing piece, even if the phone number is listed several times. Section 40.8.1 mandates that if an external broker’s phone number is listed on a marketing piece, the health plan must also list their telephone number (and hours of operation once).
Section 70.10.3 provides Scope of Appointment guidance. I recommend all agents are thoroughly familiar with this section as it is a focus area for CMS. Note that CMS indicates that the SOA should be obtained 48 hours in advance of the appointment. Also, if the SOA is not obtained 48 hours in advance, the agent needs to document the reason.
It is interesting in 70.10.3 that CMS indicates that plans are allowed and ENCOURAGED to employ the use of technology when acquiring SOA’s. This includes e-mail, so I’m wondering if a plan will develop a method for obtaining SOA’s with e-mail.
Section 70.10.4 deals with “walk ins” with respect to obtaining a SOA.
Following are just some changes I find interesting:
In 2012, CMS put an additional limit on nominal gifts. In addition to the $15 limitation, CMS put an annual cap of $50. In 2013, CMS clarified in section 70.2 (see NOTE) that this does not include PRE-enrollment nominal gifts. Thus plans only need to track members. One caveat is that plans can’t intentionally make multiple nominal gifts to PRE-enrollees. For example, they can’t have 10 different nominal gifts (say at 10 different tables) available for giveaway at one marketing event.
As a coorelary to this, section 70.3 is removing the $50 per year cap for members where Health Plans wish to incentivize their members to take advantage of certain benefits. One example would be smoking cessation.
CMS is allowing plans to deliver some documents in formats other than paper. This is good to see happening! The catch here is that the member must agree to receive the documents (specifying exactly which ones) and specify the method they are willing to receive it (like e-mail). For example, if the member agrees, the plan could deliver the ANOC letter via email. It will be interesting to see if health plans use agents to try and promote this type of efficiency in communications (example, agent delivers the authorization for electronic delivery at the time of enrollment). I’m sure there are some Medicare beneficiaries who would prefer getting notifications via e-mail or some other means, plus this saves time and money.
Another new item is the use of Multi-language insert (section 30.7.1) which now must be used by all plans regardless of whether or not at least 5% of their population is non-English speaking. The multi-language insert must be used with the Summary of Benefits and the Annual Notice of Change (ANOC).
CMS did some rewording of certain disclaimers (Disclaimers are in section 50). For example, the PFFS disclaimer which used to be about a paragraph long is not a short 2 sentence disclaimer. CMS edited a number of disclaimers to use plain language as opposed to legalese. For example, the PFFS disclaimer was, “A Medicare Advantage Private Fee-for-Service plan works differently than a Medicare supplement plan. Your doctor or hospital is not required to agree to accept the plan’s terms and conditions, and thus may choose not to treat you, with the exception of emergencies. If your doctor or hospital does not agree to accept our payment terms and conditions, they may choose not to provide health care services to you, except in emergencies. Providers can find the plan’s terms and conditions on our website.“
This has been revised to: “A Private Fee-for-Service plan is not a Medicare supplement plan. Providers who do not contract with our plan are not required to see you except in an emergency.“
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