CMS officials initiated a clampdown on the Medicare Advantage program by proposing new marketing rules last week, while Congress made little progress on a legislative fix to the way that Medicare reimburses doctors.
The new Medicare Advantage regulationmeant to better rein-in unprofessional and potentially illegal sales and marketing tacticsgot mixed reviews, with some saying they dont go far enough. Medicare Advantage has been criticized in the past as being too costly relative to traditional Medicare coverage.
The proposed regulation, released on May 8 and open for comment until July 15, prohibits cold-calling and expands a moratorium on door-to-door sales, acting CMS Administrator Kerry Weems said. Additionally, the proposal would alter the way plans pay sales commissions so that the bonus payments are consistent across each product type. The measure is meant to prevent sales staff from moving seniors from one plan to another in order to bolster their commissions. Plans that violate the rules could face fines of up to $25,000 per enrollee, Weems said.
In terms of enforcement, theyre talking about hard penalties, said Paul Precht, director of policy and communications at the Medicare Rights Center. But, he said, the regulation misses the problem. They just dont have the ability to find out which plans are problematic because they dont have the personnel to track complaints.
State insurance commissioners have lobbied Congress for a wider berth when it comes to investigating marketing practices. Under federal law, the states typically have regulatory authority over sales agents and brokers, but have limited authority over the actual insurance company itself. That lack of oversight, they say, leaves them handcuffed to pursue and punish certain abuses that come to light.
Earlier this year, the National Association of Insurance Commissioners released a survey showing that 37 out of 43 states received complaints about inappropriate or confusing marketing practices that led Medicare beneficiaries to enroll in a Medicare Advantage plan.
While the proposed regulation would require sales agents to be licensed under state laws, it doesnt, however, allow the states to levy financial penalties against the plans, Weems said.
An aide to Rep. Pete Stark (D-Calif.), chairman of the Ways and Means Health Subcommittee, said that while the goals of the regulation are laudable, the enforcement provisions fall short. Stark has championed measures that give state regulators the power to go after Medicare Advantage and prescription drug plans directly.
Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, cheered the proposal, saying that he would adopt many of the protections into law. Americas seniors have been pressured, prodded, preyed on and ripped off by shady marketing too often, he said in a written statement. I intend to get these bans into the law to ensure aggressive marketing tactics are quashed once and for all.
Meanwhile, physicians looking for Congress to prevent a 10% Medicare reimbursement cut from starting July 1 are likely to be left wanting until June.
Lawmakers have always talked about a bill getting to the Senate floor before they break for their Memorial Day recess, which begins after May 23. Its not going to happen by then, said Patrick Smith, senior vice president of governmental affairs with the Medical Group Management Association. My understanding is that Baucus will try to get the bill to the floor of the Senate by the first week in June.
Arguments over how to pay for the bill, which could come in at $18 billion, have held up the proceedings in the Senate, Smith said. The physician pay fix alone will cost the government $8 billion over the next five years. The Senate bill is expected to contain provisions that would delay Medicare physician cuts by 18 months, while boosting payments up to 1.7% over that time period, and extending other retiring Medicare provisions.
The Bush administration wants Congress to draft legislation by June 16.
Longer term, government officials also are pushing for fundamental reform to physician reimbursement, which relies on the sustainable growth-rate formula, beyond the temporary fix planned for June. The SGR is a pretty blunt instrument, said Herb Kuhn, deputy administrator of the CMS, speaking before the House Small Business Committee last week. I think its time to move on to find a better way to pay physicians, basing payments on outcomes and quality rather than just volume of care, he said.