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Weems Warns Medicare Advantage Plans About Marketing Abuses

By John Reichard, CQ HealthBeat Editor

September 24, 2007 – The new head of the Centers for Medicare and Medicaid Services used his first public appearance before a group of managed care executives to warn them that public confidence in Medicare's private health plans hinges on avoiding unscrupulous marketing practices.

"The old saying that a few bad apples spoils the bunch is particularly apt with regard to marketing abuses," said Kerry Weems, recently named acting administrator of the Centers for Medicare and Medicaid Services. "Unless the marketing abuses are nipped in the bud, congressional and public sentiment can easily turn against the entire Medicare Advantage program." Medicare Advantage is the private health plan component of Medicare.

Speaking to attendees of a Medicare and Medicaid conference Monday sponsored by America's Health Insurance Plans, Weems said "this past week we issued civil monetary penalties against two plans for marketing abuses. I want to be clear. Despite the fact that we believed that civil monetary penalties were necessary, they represent a failure for all of us: CMS as well as these plans." Government and industry must work together to prevent abuses in the first place, he emphasized.

Medicare Advantage program overseers have shied away from tough regulatory talk since the program was launched by the 2003 Medicare overhaul law (PL 108-173). And when officials have acted against plans, they've offered few details. But criticism of the marketing practices grabbed press attention this spring when the Senate Aging Committee held a hearing spotlighting marketing abuses. On June 15, CMS officials held a rare press briefing on such violations and announced a suspension of marketing efforts by seven Medicare Advantage plans until their practices were changed.

In his speech Monday, Weems announced he has notified the plans they can resume marketing because they have taken steps to correct abuses. He added that "oversight involves more than shining a light on the problems after they occur. We also need transparency to support better service so problems will not occur. That's why on Nov. 15, we'll post the Medicare Part C and D reports cards on our Web site so the public will have full access to information on plan performance. And on Oct. 1 the full range of corrective action plans issued during 2006 and 2007 will be posted on our Web site." Part D is the prescription drug part of the Medicare program.

Weems did not name the two plans slapped with civil monetary penalties in his speech. In a subsequent e-mail, CMS Spokesman Jeff Nelligan said "CMS imposed penalties of $264,000 on Coventry Health Care, Inc. based on misrepresentations made by sales agents representing Coventry's Advantra Freedom plan. CMS also imposed penalties of $75,000 on Humana, Inc. based on the use of unlicensed sales agents to market their plans to Medicare beneficiaries in Oklahoma."

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