CMS Cautions Private Plans to Stop Misleading Marketing

After a May hearing by the Senate Special Committee on Aging exposed widespread marketing abuses by private Medicare plans, the Centers for Medicare & Medicaid Services (CMS) issued new guidance requiring some private plans to take steps to ensure new enrollees are informed of how the plan changes their Medicare coverage. The May 25 CMS guidance tells insurers selling private fee-for-service plans (PFFS) to stop marketing these products as Medicare supplement plans. This does not seem to be a major problem in Massachusetts, but staff should be alert for possible cases.

CMS is requiring PFFS plans to call new enrollees and explain that the PFFS plans will provide coverage instead of Medicare and that Medicare will no longer pay for enrollees’ health care once they are enrolled. Enrollees are then told that they have the option to disenroll if they act within seven day or by the end of the month, whichever is later. Note that enrollees are not given the option to disenroll during the phone call.

New enrollees who plans fail to reach by phone should receive a letter explaining how the PFFS plan changes their Medicare coverage. The letter explains the limits on their enrollment options, but does not explicitly warn them that failure to disenroll immediately will leave them locked in to the plan for the remainder of the year.

PFFS plans are also required to send additional notices confirming enrollment and cautioning enrollees to check to see if their doctor accepts the plan. These notices do not provide an option to disenroll. Instead they advise enrollees they will leave them locked in to the plan.

-Adapted from Medicare Watch e-mail, Issue 12, June 12, 2007.

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