Don t t Scuttle the Ship: Navigating the Regulatory Ocean in Pursuit of Part D Marketing Compliance HCCA s Medicare Prescription Drug Part D Compliance Conference December 10, 2007 Anne W. Hance McDermott Will & Emery LLP Robert E. Slavkin Foley & Lardner LLP 1
Medicare Beneficiaries PDP Trusted Information Sources Part D Plans CMS Insurance Agents State Medicaid Program Physicians and Pharmacists 2
Overview Regulatory Ocean You Must Navigate - State Laws and Federal Preemption - Medicare Marketing Guidelines - HIPAA Privacy Rule Implications Pursuing Internal Compliance Pursuing Downstream Compliance 3
State Marketing Laws and Federal Preemption Social Security Act 1856 States That With Respect to the Medicare Advantage (MA) Program: The standards established under this part shall supersede any State law or regulation (other than State licensing laws or State laws relating to plan solvency) with respect to MA plans which are offered by MA organizations under this part. Social Security Act 1860D-12 12 Incorporates This Provision by Reference Into the Medicare Prescription Drug Benefit Program The Medicare Marketing Guidelines ( Guidelines( Guidelines ) ) are Considered Federal Standards and Therefore Preempt State Laws Governing Health Plan Marketing 4
State Marketing Laws and Federal Preemption (cont) But the Guidelines Leave Room for State Regulation... because an organization is required to use only a state- licensed, registered or certified individual to market a plan, if a state has such a requirement, CMS expects an organization to comply with a reasonable request from a state insurance department or other state department that licenses individuals for purpose of marketing insurance plans, which is investigating a person that is marketing on behalf of an organization, if the investigation is based on a complaint filed with the state insurance or other department. -The Medicare Marketing Guidelines (p.130) 5
State Marketing Laws and Federal Preemption (cont) State Insurance Departments Retain Oversight Over Agents and Brokers Plans operating in more than one state must be aware of and comply with each state s s requirements for agent/broker licensure, activities A Plan answers to two regulatory agencies CMS and the state insurance department for agent misfeasance State Medical Practice Acts May Regulate Marketing by Licensed Providers 6
The Medicare Marketing Guidelines Purpose Standardize information Minimize beneficiary confusion Prevent misleading beneficiaries Protect beneficiaries against inappropriate influence 7
Medicare Marketing Guidelines (cont.) Scope Regulates Plan marketing - the steering or attempting to steer Medicare beneficiaries towards a Plan or group of Plans Also address educational and enrollment activities and materials As a Result, Guidelines Apply to Wide Range of Materials and Activities Advertising, such as billboards, fliers, newspaper and TV ads and other promotional materials Marketing representatives scripts and presentation materials Outbound marketing and inbound enrollment calls Agents and brokers Provider directories and summaries of benefits Member ID cards, evidences of coverage and other Member communications Provider activities 8
Regulated Marketing Encounters P o s t S ta n d s a n d F re e s ta n d in g B a n n e rs P rin t A d v e rtis e m e n ts E v e n t S ig n a g e B illb o a rd s P o te n tia l E n ro lle e E n c o u n te rs In d iv id u a ls / P la n R e p s / E n ro llm e n t S ta ff W e b s ite s K io s k s M a ile rs C o u n te r T e n ts & S tic k e rs P u b lic S e rv ic e A n n o u n c e m e n ts P ro m o tio n a l B u tto n s 9
CMS Oversight Tools Guidelines Impose Several Mechanisms for CMS Oversight of Marketing Activities Defined marketing periods Mandatory materials for distribution Rules about materials content, style CMS review of all marketing materials Permitted and prohibited marketing activities Guidelines Rules and Requirements Apply to Plans As Well As Plans Subcontractors and Participating Providers CMS Holds Plans Responsible for Their Contractors Actions 10
CMS Review of Marketing Materials CMS Reviews ALL Marketing Materials, Including Those That Promote an organization Provide enrollment information Explain the benefits of enrollment Explain conditions of coverage, coveraged services Review Processes Standard review File and use certification File and use eligibility 11
CMS Review of Marketing Materials (cont.) Standard Review Plan may use the material if approved/not disapproved 45 days after submission (10 days if model used) Required for all materials that deviate from model documents or for which models are not available File and Use Certification Plan may use the materials if approved/not disapproved 5 days after submission Available only for certain marketing materials and requires certification of compliance with applicable regulations CMS conducts retrospective review File and Use Eligibility Available to Plans with track record of marketing compliance Permits qualifying Plans to use certain non-standard marketing materials 5 days after submission Plan materials still subject to retrospective review 12
CMS Review of Marketing Materials (cont.) CMS reviews materials for: Accurate and adequate description of benefits Accurate and adequate explanation of grievances and appeals process Information necessary for beneficiary to make an informed decision Misleading or materially inaccurate statements 13
HIPAA Privacy Rule Implications Plans and providers are responsible for following all Federal and State laws regarding confidentiality and disclosure of patient information to plan sponsors for marketing purposes. This obligation includes compliance with the provisions of the HIPAA privacy rule and its specific rules regarding uses and disclosures of beneficiary information. - Medicare Marketing Guidelines (p. 125) 14
HIPAA Privacy Rule Implications (cont.) Covered entities, Plans included, may use patient protected information for: Treatment Payment Health care operations Certain public interest or benefit purposes 15
HIPAA Privacy Rule Implications (cont.) Plans may use their Members information to provide those Members with information regarding the Plan s Part D benefit packages Advantage for MA-PDs -- Challenge for PDPs Where do they get their contact information? Blanket advertising Bowling for beneficiaries! HIPAA A One-Way Street, So To Speak Entities sub-contracted with MA-PDs must execute business associate or data use agreements 16
Pursuing Internal Compliance Plan Marketing Dos and Don ts Plans Sales Force Practical Implementation of Marketing Activities Potential Compliance Issues Potential Compliance Strategies 17
Plan Marketing Dos and Don ts Plans May: Use employees, subcontractors, independent contractors to market the Plan Conduct outbound telephone marketing, in accordance with federal and state laws Provide gifts of nominal value for event attendance, so long as the gift is not contingent on enrollment 18
Plan Marketing Dos and Don ts (cont.) Plans May Not: Engage in cherry-picking Undertake door-to to-door solicitation Mislead beneficiaries or misrepresent the Plan Plans May Not Offer Inducements to Medicare Beneficiaries to Select The Plan Plans May Not Violate the Federal Anti-Kickback Statute or Similar Federal or State Laws 19
Plans Sales Force Plans Must be Marketed by Licensed Insurance Salespersons if State te Law Requires Determine activities regulated by the state Determine licensure, other regulatory requirement Monitor compliance! For Example: Florida licensure requirements: Pre-licensing course completion Pass a licensure exam Submit application that Includes: Applicant s s full name, address, age, ss # Proof of completion or about to complete prelicensing course Information on whether the applicant has had an insurance sales license revoked Whether the applicant is indebted under an agency contract Proof applicant meets requirements for type of license sought Additional information regarding experience, education, ability Fingerprinting 20
Practical Implementation of Marketing Activities Web Site Guidelines Must have a dedicated Prescription Drug Benefit web site or page, including name of Part D plan Must have font size 12 coded into its site Part D Plan toll-free customer service number, TTY/TDD number, physical or Post Office Box address & hours of operation Description of services, benefits, applicable terms and conditions, premiums, cost sharing, conditions associated with receipt or use of benefits 60 day notice regarding formulary changes, pharmacy access information, out of network coverage, grievance, appeals & exceptions policies Links for Summary of Benefits, Enrollment Instructions & Forms, Evidence of Coverage & Privacy Notice 21
Practical Implementation of Marketing Activities (cont.) Evidence of Coverage Must Include Plan service area Annual deductible amount; initial coverage limit; cost sharing under u initial coverage limit and the cost sharing between initial coverage limit and annual out of pocket threshold. Major exclusions and limitations, including UM, generic substitution tion and any other formulary restrictions; emergency and urgent care All monetary limits as well as restrictive policies that might impact i access to drugs or services Quality assurance policies & procedures, including UM and DTM Part D Plans contract is renewable annually so coverage beyond 1 year not guaranteed Define & explain formulary & how to obtain exceptions to formulary ry or tiered cost structures; EOBs for prescription drug benefits used Availability of limited income subsidies and rights of appeal 22
Potential Compliance Issues Matching Oral with Written Communications Regarding Plan Benefit Package, Enrollment/disenrollment Formulary coverage and cost-sharing sharing obligations Coverage determinations and appeals Work Force Education/Competency & Qualifications Brokerage Activities Call Center Environment Training materials TSF/ASA requirements Performance standards Documentation/risk management 23
Potential Compliance Strategies Marketing Department Self-Monitoring Develop and maintain policies and process for internal review of ALL activities and materials Provides framework, structure for organizing marketing activities s and meeting CMS regulatory requirements and time frames Assists in maintaining consistent messages in marketing materials Enables monitoring of all activities (performed by Plan and by contractors) c Can prevent inadvertent violations Train and test employees and contractors engaging in marketing activitiesa Many contractors unaware that Medicare marketing activities are so highly regulated, especially compared to commercial plans Provides an opportunity for individuals to ask questions, get clarification Compliance Department Oversight and Auditing Routine and unannounced monitoring of marketing materials, secret shoppers Prevents/corrects inappropriate activities Identifies areas where additional training is required 24
Pursuing External Compliance Identifying the Players Agents, brokers and other marketing contractors Providers Understanding What Each Player May, May Not Do and Say Compliance Strategies to Prevent, Detect and Correct Issues 25
Agents, Brokers and Other Marketing Contractors Independent Agents and Brokers Similar Issues and Employed Agents and Brokers Significant Enforcement Scrutiny of these Entities Other Marketing Contractors e.g. Telemarketers and Printing Companies Strict oversight and training Both Outbound Marketing and Inbound Enrollment Calls Routine Monitoring of Print Materials HIPAA Issues 26
Role of Providers Recall the Definition of Marketing Steering, or attempting to steer, an undecided potential enrollee e towards a plan, or limited number of plans, and for which the individual or entity performing marketing activities expects compensation directly or indirectly from the plan Education Informing a potential enrollee about MA or other Medicare Programs, generally or specifically, but not steering or attempting to steer, er, a potential enrollee towards a specific plan or limited number of plan This Distinction is Important for Providers, Who May Educate Beneficiaries About Medicare Options, But May Not Market Specific Plans, Including Those Plans With Whom the Provider Contracts 27
Providers CAN Objectively provide the names of Part D plans in the region Provide information and assistance in applying for the Extra Help Provide objective information on specific Plan formularies, based on a patient s s medications and health care needs Provide objective information regarding specific Plans, such as covered benefits, cost sharing, and utilization management tools Distribute Plan marketing materials, including enrollment application forms or standalone PDPs (but not MA-PDs PDs) Refer patients to other sources of information Distribute comparative marketing materials 28
Providers CAN T Ө Direct, urge, or attempt to persuade, any prospective enrollee to enroll in a particular Plan or to insure with a particular company based on financial or any other interest of the provider (or subcontractor) tor) Ө Provide Plan to Plan comparison unless part of an overall third d party comparison Ө Collect completed enrollment forms for submission to a Plan (both PDPs and MA-PDs PDs) Ө Offer inducements to persuade beneficiaries to enroll in a particular plan or organization Ө Health screen when distributing information to patients Ө Offer anything of value to induce Plan enrollees to select them m as their Plan provider Ө Expect compensation in consideration for the enrollment of a beneficiary Ө Expect compensation directly or indirectly from the Plan for beneficiary enrollment activities 29
Compliance Strategies to Prevent, Detect, and Correct Issues Periodic Training and Testing of Contractors Practical Monitoring Tools Consider Including in Provider, Contractor Contracts Provision(s) ) Addressing Marketing Activities Specifically, require compliance with the Guidelines Require Plan oversight and/or approval of all marketing activities Require Plan approval of all marketing materials prior to use 30
Potential Penalties For Non-Compliance CMS May Impose Sanctions on Plans That Violate the Applicable Regulations, Including Marketing Guidelines Civil money penalties ( CMPs( CMPs ) ranging from $10,000 to $100,000, depending on the violation Suspension of enrollment Suspension of payment Suspension of marketing activities Denial of contract renewal or contract termination Less Severe Sanctions Include Cease and Desist Letters and Warnings Against Similar Actions BEWARE: States Like to Get Into the Act, too. CMS 31
Potential Penalties For Non- Compliance (cont) Bases for Imposing Sanctions Include Failure to substantially carry out the terms of the contract with CMS Carrying out the contract in a manner that is inconsistent with the effective and efficient implementation of the MA or Part D program CMS determines that the Plan Sponsor no longer meets the requirements... for being a contracting organization Marketing Violations Also Can Be Basis for Investigation by the Medicare Drug Integrity Contractors (MEDICs( MEDICs), United States Attorneys, State Insurance Departments, State Attorney Generals 32
More Information CMS Medicare Marketing Guidelines (v.7-25 25-06): http://www.cms.hhs.gov/prescriptiondrugcovcontra/downloads/final MarketingGuidelines.pdf CMS Part C Marketing Website: http://www.cms.hhs.gov/managedcaremarketing/01_overview.asp CMS Part D Marketing Website: http://www.cms.hhs.gov/prescriptiondrugcovcontra/07_rxcontracting _Marketing.asp#TopOfPage 33
Questions and Comments Anne W. Hance McDermott Will & Emery LLP 202.756.8270 ahance@mwe.com Robert E. Slavkin Foley & Lardner LLP 407.436.7656 rslavkin@foley.com 34