1 Marketing Updates: Medicare Marketing Guidelines; OEV and Surveillance Findings and Areas of Compliance Focus April 12, 2012 Chevell Thomas Christine Reinhard Division of Surveillance, Compliance, & Marketing Medicare Drug & Health Plan Contract Administration Group

2 Overview of Presentation Medicare Marketing Guidelines (MMG) Outbound Enrollment Verification Calls Surveillance Results Compliance Focus for 2012

3 MEDICARE MARKETING GUIDELINES (MMG) UPDATE Medicare Marketing Guidelines Streamlining Project Began Fall 2011 Focus Marketing requirements (Subpart V) Eliminating redundancy Consolidating requirements Reducing prescriptiveness Cut ~70 pages

4 MMG Guiding Principles Plan sponsors are responsible for: Compliance with CMS’ current marketing regulations and guidance Full disclosure when providing information to beneficiaries about plan benefits, policies and procedures Documenting compliance with all applicable MMG requirements

5 First Principle Compliance with CMS’ current marketing regulations and guidance, including monitoring and overseeing the activities of their subcontractors, downstream entities and/or delegated entities Agents, Brokers, Third-party Marketing Organizations (TMOs), Providers, Pharmacy Benefit Managers (PBMs), etc. Materials, activities, and information

6 Second Principle Full disclosure when providing information to beneficiaries about plan benefits, policies, and procedures Materials are accurate, do not mislead and do not misrepresent the sponsor or plan products Beneficiaries must have the information complete to make their own choices

7 Third Principle Documenting compliance with all applicable MMG requirements Plan sponsors are responsible for developing systems to monitor and document compliance with all aspects of their marketing program Calls, appointments, material dissemination, use of personal information Oversight Processes

8 Marketing Changes for 2013 Health Plan ID cards Agent/Broker Fair Market Value Cut-off Amounts Materials Not Subject to Review OMB forms Ad hoc Enrollee Communication Materials Materials Eligible for File & Use Scripts Summary of Benefits (SBs) Other marketing materials (considering) Agent/Broker Reporting Requirements (considering)

9 Outbound Enrollment Verification (OEV)

10 Outbound Enrollment Verification Call Audit Findings Significant number of benefit related questions Didn’t know premium Didn’t know cost sharing Plan processed cancellations as disenrollments Plan unable to process cancellations Plan failed to address beneficiary questions

11 Outbound Enrollment Verification – Suggestions for Improvement Listen to your OEV calls Ensure your disenrollment department understand cancellation requirements Address beneficiary questions Provide CSRs with training and tools to answer questions CSRs did not know their plan’s premium Beneficiaries did not understand plan rules CSRs did not explain the plan rules

12 Benefits of Reviewing OEV Calls You will have a better understanding of how agents/brokers are marketing You can use information to update training You should see a decrease in complaints

13 Surveillance Results

Surveillance Activities Secret Shopping of Formal Events Surveillance Marketing Allegation Response Team (SMART) Activity Tracking of Unreported Marketing Events

15 Secret Shopping Preliminary Results Over 1650 formal events shopped CMS Regional Offices CMS contractors State Departments of Insurance We continue to see improvements

16 Top Deficiencies Found In Secret Shopping Events not taking place Approximately 5% of events CMS attempted to shop did not occur Remember to cancel events in HPMS at least 48 hours in advance If timely cancellation in HPMS is not possible, a plan representative should be at the site

17 Top Deficiencies Found in Secret Shopping Absolute marketing statements Inaccurate statements Inappropriate statements Scare tactics

18 Top Deficiencies Found In Secret Shopping Absolute marketing statements – not permissible Certain plan is the best Most recognizable name in market Largest enrollment growth Lowest annual out of pocket costs Largest Medicare provider network We have more drugs on our formulary than anyone else

19 Top Deficiencies Found In Secret Shopping Inaccurate statements “A 3.5 rating is excellent” “There are no 5 star plans” “The government allows you to test drive for a year” “We have 3.5 stars but most plans only have 2 stars”

20 Top Deficiencies in Secret Shopping Inappropriate statements “I don’t know how long you’ll have a choice” “CMS will penalize you if you don’t enroll in a Medicare plan or a stand-alone prescription drug plan” “Original Medicare is a disaster” “Original Medicare won’t be around” “You can’t win with CMS”

21 Top Deficiencies Found In Secret Shopping Scare tactics “By 2012 all plans would require deductibles, co-pays and/or coinsurance…take advantage…zeros while they can” “If other plans have a $0 copay, they will get their money somewhere…cut the number of hospitals…authorization for all medical tests…not letting your doctor make the decision”

22 Top Deficiencies in Secret Shopping Failure to ensure contact information optional Form may state optional, but agent/broker pressure Failure to adequately explain drug coverage Which drugs are covered Failure to adequately explain Special Needs Plans Disenrollment and eligibility Prescription drug coverage

23 Secret Shopping Observations Presenter did not cover the entire presentation Insufficient number of copies of materials Inadequate explanation of rules Use of contracted pharmacies Late Enrollment Penalty

24 Addressing Specific Agent Issue - Surveillance Monitor data for trends Deficiencies per agent Geographic differences Provide necessary training Take appropriate disciplinary action Document actions taken against agents/brokers

25 Unreported Marketing Events Reviewed advertisements to ensure parent organizations are reporting scheduled marketing events to CMS Reviewed over 2100 advertisements The 2100 advertisements listed over 9700 events No decrease in unreported events between 2011 and 2012 Approximately 4% of advertisements reviewed were not submitted to HPMS

26 Surveillance Marketing Allegation Response Team (SMART) Received and investigated referrals of potential marketing misrepresentation from numerous sources Senior Medicare Patrol Beneficiaries CMS staff Plan sponsors State Departments of Insurance SHIPs

27 SMART Referrals Types of referrals/allegations received Door to door solicitation Inaccurate statements made by agents/brokers Third party marketing Unapproved marketing materials General inquiries

28 SMART Actions Referred issue to Account Manager Follow up by sponsor Performed secret shop Referred to Medic No action

29 Plan Sponsor Secret Shopping CMS to inquire about Sponsor’s secret shopping programs Tool development Resources used to shop Risk assessment for shopping Shopping findings

30 Areas of Compliance Review

31 Bids and Benefits Bids Failure to include supporting documentation that describes how the findings and observations have been addressed Failure to follow Actuarial Standards of Practice (ASOP) Basing Part D worksheet risk scores on the wrong risk model Benefits Plan corrections

32 ANOC/EOC Documents Inaccurate information Untimely distribution of ANOC/EOC documents

33 Agent/Broker Compensation Submission of compensation information Attesting to compensation information Attesting timely

34 File and Use – Retrospective Review Review of existing File and Use documents Moving more document types to File and Use More systematic retroactive review National effort Consistency Compliance letters based on national findings

35 Risk Adjustment and Encounter Data Development of compliance process Timeliness Accuracy Completeness of submission Compliance letters release for Encounter Data certification process

36 Reminders

37 Sponsors and the CTM Think “beneficiaries first” Work cases thoroughly and expeditiously Perform trend analysis Areas where issues could be resolved at sponsor level Notify CMS of trends and significant issues Conduct root cause analysis Implement processes to address findings Implement corrective actions

38 CMS and the CTM We perform regular review of issues We identify and notify sponsors of our findings Sponsors should have already identified the same findings Tracking and trending Investigations Enforcement

39 Questions? Chevell Thomas Christine Reinhard