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Commissioner’s Bulletin # B-0044-07

November 01, 2007

TO: ALL PERSONS MARKETING MEDICARE ADVANTAGE, MEDICARE ADVANTAGE PRESCRIPTION DRUG PLANS, PRESCRIPTION DRUG PLANS, AND 1876 COST PLANS, INCLUDING INSURANCE COMPANIES, CORPORATIONS, HEALTH MAINTENANCE ORGANIZATIONS, EXCHANGES, MUTUALS, RECIPROCALS, ASSOCIATIONS, LLOYD'S, OR OTHER INSURERS IN THE STATE OF TEXAS AND THEIR AGENTS AND REPRESENTATIVES, AND THE PUBLIC GENERALLY

RE: MARKETING MISCONDUCT RELATED TO CERTAIN MEDICARE PLANS AND PRESCRIPTION DRUG PLANS

The Texas Department of Insurance (TDI) has become aware of and has received numerous complaints regarding door-to-door sales, sales presentations in the non-common areas of health facilities, dissemination of misleading information, and other sales tactics that do not provide full and complete information to beneficiaries. The marketing, promoting, and distributing of information that is misleading, deceptive, or fails to provide beneficiaries with full and completely accurate information is improper, and TDI reminds carriers, agents, and all regulated entities of their responsibility to comply with both federal and state law.

TDI issues this bulletin to:

· underscore to companies, agents, subcontractors, and consumers that the marketing of Medicare Advantage (MA), Medicare Advantage Prescription Drug Plans (MA-PDs), Prescription Drug Plans (PDPs), and 1876 Cost Plans, is subject to strict marketing standards established by the Centers for Medicare and Medicaid Services (CMS), and

· announce the establishment of an information sharing process between TDI and CMS designed to provide for enhanced monitoring of marketing activities.

Medicare Marketing Guidelines

CMS publishes the Medicare Marketing Guidelines ("the Guidelines") for the marketing of MA, MA-PDs, PDPs, and 1876 Cost Plans. The Guidelines constitute CMS' interpretation of the Medicare Advantage and Prescription Drug Benefit rules (Code of Federal Regulations, Chapter 42, Parts 422 and 423) and the official position of CMS on marketing and operational instructions for these products. Compliance with the Guidelines is mandatory, and any company marketing these products must ensure that its agents and subcontractors are in full compliance with both the rules and the Guidelines. TDI directs that companies, agents, and subcontractors review the Guidelines in their entirety, which include the following:

1. Marketing material may not be distributed until the sponsoring organization has contracted with CMS and has received appropriate authorization from CMS;

2. All marketing materials must be submitted to CMS prior to distribution. (The Guidelines provide specific clarification on what constitutes "marketing material" and specify which types of material require approval prior to use and which types of material qualify for file and use.);

3. Marketing materials may not be distributed that are materially inaccurate, misleading, or otherwise contain material misrepresentations. In addition, a claim that any product is recommended or endorsed by any federal or state agency is prohibited;

4. Except for banner ads, banner-like ads, and outdoor advertising, all advertising material must include the statement that the organization contracts with the Federal government. In addition, flyers and invitations to sales presentations that are used to invite attendance at a group session with the intent of enrolling individuals attending must include the following two statements:

a. "A sales representative will be present with information and applications;"

b. "For accommodation of persons with special needs at sales meeting, call <insert phone and TTY/TDD numbers>;"

5. The "Summary of Benefits" is a standardized stand-alone marketing document, and it must be presented when marketing MA, MA-PDs, or PDPs;

6. Rebates of any sort or cash inducements to purchase are prohibited;

7. While sales presentations and distribution and collection of enrollment applications may be done in a health care setting, marketing activities are restricted to the common areas (such as the hospital or nursing home cafeteria, community or recreational rooms, or conference rooms). Such activities are prohibited in areas where patients primarily intend to receive health care services (such as waiting rooms, exam rooms, hospital patient rooms, or pharmacy counter areas);

8. Door-to-door solicitations are prohibited prior to receiving an invitation to provide assistance in a residence;

9. E-mails addressed to a Medicare beneficiary are prohibited unless the beneficiary agrees to receive e-mails from the organization and has provided an e-mail address to the organization; and

10. Compliance with the National Do-Not-Call Registry, "do not call again" requests, and federal and state requirements related to calling hours is required.

An electronic copy of the Guidelines and additional regulatory information regarding the marketing of these products is available online at:

http://www.cms.hhs.gov/PrescriptionDrugCovContra/07_RxContracting_Marketing.asp.

Information Sharing Process

TDI has entered into a memorandum of understanding (MOU) and agreement with CMS concerning regulatory cooperation and information. The purpose of the MOU is to promote cooperation, supervisory coordination, and the sharing of information between TDI and CMS concerning the conduct of companies and persons involved in marketing the Medicare managed care and prescription drug programs. Under the MOU, TDI and CMS agree to promptly share information regarding complaints, solvency, requests for corrective action, and other activities of a company or person engaged in insurance activities subject to the regulatory authority of TDI and CMS. Additionally, the MOU includes streamlining provisions related to enforcement activities and consumer complaint handling. The MOU better enables TDI and CMS to work together to appropriately monitor and respond to marketing activities related to these products.

If you have any specific questions regarding this bulletin, please contact Audrey Selden at 512-475-1760 or at Audrey.Selden@tdi.state.tx.us. For general information, please contact ChiefClerk@tdi.state.tx.us.

Mike Geeslin

Commissioner of Insurance

Texas Department of Insurance





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Remember: TDI's Internet resources are to be used for legitimate state purposes. Occasional personal use is permitted so long as such use is incidental, is brief, does not result in additional cost to TDI or the state and does not interfere with the performance of the employee's job duties. Under no circumstances may an employee use TDI's Internet resources to access sexual, offensive, profane or otherwise inappropriate information. By using TDI computers to access Internet resources, TDI employees are consenting to the monitoring of their use of Internet resources. TDI employees do not have a privacy interest or an expectation of privacy in the use of TDI computers to access Internet resources. Refer to the TDI Operations Manual for additional information.