Insurers agree to halt health plan sales States received complaints about unwanted policies sold to seniors Insurers agree to halt health plan sales
By Jim Stafford
Published: June 16, 2007
Seven marketers of health care plans to older Americans have agreed to stop selling so-called "private fee-for-service” plans to Medicare recipients, the Centers for Medicare and Medicaid Services said Friday.
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The voluntary suspension of the plans includes those sold by United Health Care, Humana, Wellcare, Universal American Financial Corp. (Pyramid), Coventry, Sterling and Blue Cross/Blue Shield of Tennessee, the agency said.
The deal was announced in a national teleconference Friday and appears to be a direct response to testimony by Oklahoma Insurance Commissioner Kim Holland and commissioners from other states last month.
The commissioners said they received complaints that unwanted policies were being sold to seniors.
Holland singled out Humana Insurance Co. as a major culprit in Oklahoma.
"I'm glad the message resonated and I'm glad we were able to act on it and did act on it, and the results are this,” Holland said.
"It's an important thing for them to do and important message for our consumers that when they go to insurance departments, we are able to make something happen for them. That's what my job is all about.”
As part of the agreement signed by the seven companies, sales of the plans will be suspended until the Centers for Medicare and Medicaid Services certify that each company has systems and management controls in place to meet all conditions specified by the agency.
"By the terms of the agreement, they are locked in until CMS, after reviewing their systems and their management provisions, assures us that they can, in fact, comply,” said Abby Block, director of the Center for Beneficiary Choices with CMS.
"Once they resume marketing, they will be strictly monitored as will everybody else be strictly monitored though the secret shopper process, through the complaint process and through the eyes and ears of CMS and the (Senior Health Insurance Counseling Program) and other partners out in the community.”
The agreement becomes effective on Wednesday.
In testimony before Congress in May, Holland documented cases in which Oklahomans were sold private policies that resulted in cancellation of long-held Medicare supplement policies they held.
Many believed they were buying Medicare Part D prescription coverage when in reality they bought a Medicare Advantage insurance plan that preempted previous coverage, Holland said.
Oklahoma was the only state that required volunteers enrolling seniors into the Medicare prescription drug program to be licensed by the state.
"We have pretty much taken the lead in the nation in terms of our effort to make sure our seniors are protected with this new program,” Holland said.
Here are the primary provisions that insurers signing the agreement must meet to have the suspension lifted on sales of private fee-for-service plans to Medicare recipients:
• All materials, including advertisements, will include disclaimer language provided by CMS;
• All representatives selling the product to beneficiaries on behalf of the plan sponsor must pass a written test;
• All provider outreach and education programs will be in place to ensure that providers have reasonable access to the plan terms and conditions of payment and that the providers' staffs are readily accessible to assist recipients with questions concerning the plans;
• Outbound education and verification calls will be made to all beneficiaries that requested enrollment to ensure that they understand the plan rules;
• Lists of planned marketing and sales events provided to CMS will include events sponsored by delegated brokers and agents as well as those sponsored by the plan;
• When asked by CMS, plan sponsors will provide a complete list of all representatives marketing private fee-for-service products and will authorize CMS to make that list available to state insurance departments on request.
Source: Centers for Medicare and Medicaid Services
