Stop Marketing Abuses in Medicare: Senator Wyden Helped Lead the Charge

As a member of the House of Representatives in the 1990s, Wyden authored the "Medigap" law that put an end to Medicare supplement insurance scams and, with Senator Kohl and Senator Dorgan, Senator Wyden introduced legislation to address some of the same deceptive practices that have resurfaced in the marketing of Medicare Advantage (MA) and Medicare Part D plans.

When Congress passed the Medicare Prescription Drug and Modernization Act of 2003, Senator Wyden pledged to work to improve the Medicare drug benefit. Since the implementation of the Medicare Part D prescription drug program, there have been reports of aggressive marketing practices by overzealous insurance agents and some insurance plans.

The Accountability and Transparency in Medicare Marketing Act of 2007 (S. 1883) would end the Federal pre-emption preventing states -- the eyes and ears of those on the ground -- from regulating MA and Medicare Part D plans. The bill returns authority to the states to regulate both agents and companies in the marketing and sales of MA and prescription drug plans. The bill also provides for State certification prior to waiver of licensure requirements under the Medicare prescription drug program, and for other purposes.

The bill was written in response to testimony received at an April 16, 2007 Aging Committee hearing on marketing abuses in the Medicare Advantage program. Introduced on July 26, 2007, the Kohl-Wyden-Dorgan bill later provided the framework for discussions with consumers and the industry around Medicare marketing abuses. In February 2008, the Senate Finance Committee also held two hearings on Medicare Advantage marketing abuses.

The Accountability and Transparency in Medicare Marketing Act of 2007 (S. 1883) has received the support from the California Health Advocates, Medicare Rights Center and Center for Medicare Advocacy.

Substantial provisions of the Accountability and Transparency in Medicare Marketing Act of 2007 were included in the Medicare Improvements for Patients and Providers Act of 2008, which was enacted into law over President Bush's veto in July 2008. Among other protections, the provisions of the Medicare Improvement for Patients and Provider Act:

Prohibits:

• Cold calling (unsolicited direct contact) potential enrollees
• Cross selling non-health care related products by insurance agents or plans during Medicare sales or marketing activities
• Meals as part of marketing activities
• Sales and marketing in health care settings (e.g., physicians offices and pharmacies)
• Sales and marketing at educational events such as health fairs

Places Limits on:

• Marketing appointments for a Medicare Advantage or Medicare Part D product , including in-person sales calls
• Co-branding of Medicare products with other insurance products on membership and marketing materials
• Gifts to potential customers
• Compensation (commissions and bonuses) for agents and brokers to ensure that compensation creates incentives to enroll seniors in the Medicare Advantage plan that is intended to best meet their health care needs

Requires:

• Agent and broker training and testing and annual re-training and re-testing
• Name of all MA and PDP plans to include plan type (HMO, PPO, PFFS)

Strengthens the ability of states to address fraudulent or inappropriate marketing practices:

• Appointment of Agents and Brokers - Requires MA organizations to use only agents and brokers appointed and licensed under state law to sell MA and PDP plans
• Requires plans to report to the State the termination of any agent or broker, including the reasons for such termination
• Requires Medicare Advantage organizations to comply in a timely manner with any request by a State for information regarding the performance of a licensed agent, broker, or other third party as part of an investigation by the State into the conduct of the agent, broker, or other third party