U.S. approves rules for drug plan sales

Supplementary Medicare programs drew complaints

North Carolinians enrolled in two supplementary Medicare programs should see fewer high-pressure sales tactics under stricter federal oversight, the Centers for Medicare and Medicaid Services said Monday.

But a state insurance official said the proof will come in federal enforcement of the new regulations.

Prescription drug plans, known as Medicare Part D, and the private health-insurance plans known as Medicare Advantage have generated thousands of complaints in North Carolina in recent years.

The state head of the Seniors' Health Insurance Information Program said Monday that she welcomes the new rules but wants to see them in action.

"Many of the regulations were already guidelines, and we saw that people didn't adhere to the guidelines," said Carla Obiol, deputy commissioner of the Department of Insurance. "... We at the SHIIP feel that the state office could do a better job of regulating these plans, but we don't have the authority to do that."

North Carolinians say they have been hit by over-aggressive and deceptive marketing of Medicare plans. The acting director of the federal Medicare and Medicaid office said new and expanded enforcement techniques, including an effort to have regulators pose as customers to monitor sales pitches, will show that the agency is up to the job of curtailing some agents' heavy-handed practices.

"CMS takes its enforcement role very seriously and ... will monitor activities throughout this year's enrollment period to ensure that beneficiaries are protected from aggressive marketing behavior," Kerry Weems, CMS acting administrator, said Monday.

State insurance department statistics show that more North Carolina consumers have called SHIIP with questions about Medicare Advantage so far this year than in all of last year. Since early 2006, more than 12,000 people have called about Medicare Advantage, registering more than 2,600 formal complaints.

Changes designed to improve accountability were mandated under federal Medicare improvement legislation that passed in July. "Accountability means a lot more regulation is coming," industry consultant John Gorman said Friday in the trade publication Medicare Advantage News.

Changes are planned also for the way agents are compensated for sales to prevent "churning" of beneficiaries from one plan to another to create high levels of commission.

CMS will be able to levy a penalty up to $25,000 for violations involving each beneficiary who was harmed, Weems said.

Medicare's open enrollment period begins Nov. 15. The new rules cover marketing that begins Oct. 1.