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U.S. Bans Free Meals, Cold Calls for Medicare Pitches
By
Lisa Richwine, Reuters
September 15, 2008
Companies that offer Medicare health insurance and prescription drug coverage can no longer offer free meals during pitches or make unsolicited sales calls, the U.S. government said on Monday.
The insurers also must modify commissions to stop salespeople from switching patients to a new plan each year to earn the highest possible fee, the Centers for Medicare & Medicaid Services (CMS) said.
The changes are meant to "protect Medicare beneficiaries from deceptive or high-pressure marketing tactics by insurance companies and their agents," Acting CMS Administrator Kerry Weems told reporters during a conference call.
The new rules also prohibit unsolicited door-to-door marketing and pitches in doctors office waiting rooms or other places where health-care is delivered.
Companies that violate the new rules could face penalties of up to $25,000 for each person that was harmed or might have been harmed by the practices, Medicare officials said.
Insurers such as Humana Inc and UnitedHealth Group contract with Medicare to sell private fee-for-service or managed-care insurance plans to beneficiaries, as well as prescription drug coverage.
Medicare is the federal health insurance program that covers more than 44 million elderly and disabled Americans. About 10.1 million of them are enrolled in Medicare Advantage plans.
For others in traditional Medicare, the government pays directly for care through a system that lets beneficiaries choose doctors and hospitals.
More than 25 million Medicare patients also have prescription drug coverage from private companies.
Companies must follow the new rules starting October 1 when they begin marketing plans to Medicare enrollees for next year. An open enrollment period for switching plans starts November 15.
Many of the changes were proposed by CMS in May and put into law by Congress in July.
Senate Finance Committee Chairman Max Baucus, a Montana Democrat, welcomed the rules but said CMS must follow them by tracking companies' compliance.
Officials must "listen to complaints from seniors and crack down when any plan runs afoul of the law or fails to stop shady agents and brokers from engaging in unfair practices," Baucus said in a statement.
Medicare officials said surveillance would include "secret shoppers" posed as potential enrollees to monitor sales pitches, and reviews of advertisements.
America's Health Insurance Plans, which represents health insurers, called for strong marketing restrictions in March to prevent inappropriate behavior, spokesman Robert Zirkelbach said. The group is still reviewing the new rules, he said.
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