Centers for Medicare and Medicaid Services announced June 15 that seven insurers offering Medicare private fee-for-service plans have agreed to “voluntarily” suspend marketing of their plans.

The “marketing suspension” follows numerous complaints by Medicare beneficiaries that agents were using unscrupulous sales tactics to get them to join their plans, leaving consumers not knowing how plans worked or restrictions involved.

CMS said plans would be able to resume marketing when CMS certifies they have controls in place to prevent deceptive marketing. The seven insurers involved are United Healthcare, Wellcare, Universal American Financial Corporation, Coventry, Sterling, Humana and BlueCross/BlueShield of Tennessee.

To lift suspension, these plans must provide CMS, upon request, a complete list of its sales representatives and make the list available to state insurance departments, upon request. Plans must also call recent enrollees to ensure they understand plan rules and want to enroll. In addition, salespeople will have to pass a written test showing they understand Medicare and the product they are selling. Any sales events planned by these groups must first provide CMS with a list of the “delegated” brokers and agents that will attend and those sponsored by the plan.

The CMS action seems to have come in response to a recent Senate aging committee hearing that faulted Medicare officials for failing to properly oversee marketing of private plans in Medicare, sighting “countless” cases of seniors being preyed upon by unscrupulous insurance agents. Most cases cited at the hearing involved private fee-for-service plans.

Congressional response to the CMS agreement was mixed. Many see it as an attempt to pre-empt congressional action. Others see it as a first step in the right direction in curbing misleading sales tactics. This won’t affect current enrollees in these plans.

For more information, call the Federation’s Health Plan Information Center, 651/783-5045 or 866/783-5045.