II 110th CONGRESS 1st Session S. 1883 IN THE SENATE OF THE UNITED STATES July 26, 2007 Mr. Kohl (for himself, Mr. Dorgan, and Mr. Wyden) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend title XVIII of the Social Security Act to provide for standardized marketing requirements under the Medicare Advantage program and the Medicare prescription drug program and to provide for State certification prior to waiver of licensure requirements under the Medicare prescription drug program, and for other purposes.

1.

Short title

This Act may be cited as the Accountability and Transparency in Medicare Marketing Act of 2007.

2.

Standardized marketing requirements under the Medicare Advantage and Medicare prescription drug programs

(a)

Medicare Advantage program

(1)

In general

Section 1856 of the Social Security Act (42 U.S.C. 1395w–26) is amended— (A)in subsection (b)(1), by inserting or subsection (c) after subsection (a); and (B)by adding at the end the following new subsection: (c)

Standardized marketing requirements

(1)

Development by the NAIC

(A)

Requirements

The Secretary shall request the National Association of Insurance Commissioners (in this subsection referred to as the NAIC) to— (i)develop standardized marketing requirements for Medicare Advantage organizations with respect to Medicare Advantage plans and PDP sponsors with respect to prescription drug plans under part D; and (ii)submit a report containing such requirements to the Secretary by not later than the date that is 9 months after the date of enactment of this subsection. (B)

Prohibited activities

Such requirements shall prohibit the following: (i)Cross-selling of non-Medicare products or services with products or services offered by a Medicare Advantage plan or a prescription drug plan under part D. (ii)Up-selling from prescription drug plans under part D to Medicare Advantage plans. (iii)Telemarketing (including cold calling) conducted by an organization with respect to a Medicare Advantage plan or a PDP sponsor with respect to a prescription drug plan under part D (or by an agent of such an organization or sponsor). (iv)A Medicare Advantage organization or a PDP sponsor providing cash or other monetary rebates as an inducement for enrollment or otherwise. (C)

Election form

Such requirements may prohibit a Medicare Advantage organization or a PDP sponsor (or an agent of such an organization or sponsor) from completing any portion of any election form used to carry out elections under section 1851 or 1860D–1 on behalf of any individual. (D)

Agent and broker commissions

Such requirements shall establish standards— (i)for fair and appropriate commissions for agents and brokers of Medicare Advantage organizations and PDP sponsors, including a prohibition on extra bonuses or incentives; and (ii)for the disclosure of such commissions. (E)

Certain conduct of agents

Such requirements shall address the conduct of agents engaged in on-site promotion at a facility of an organization with which the Medicare Advantage organization or PDP sponsor has a co-branding relationship. (F)

Other standards

Such requirements may establish such other standards relating to marketing under Medicare Advantage plans and prescription drug plans under part D as the NAIC determines appropriate. (2)

Implementation of requirements

(A)

Adoption of NAIC developed requirements

If the NAIC develops standardized marketing requirements and submits the report pursuant to paragraph (1), the Secretary shall promulgate regulations for the adoption of such requirements. The Secretary shall ensure that such regulations take effect not later than the date that is 10 months after the date of enactment of this subsection. (B)

Requirements if NAIC does not submit report

If the NAIC does not develop standardized marketing requirements and submit the report pursuant to paragraph (1), the Secretary shall promulgate regulations for standardized marketing requirements for Medicare Advantage organizations with respect to Medicare Advantage plans and PDP sponsors with respect to prescription drug plans under part D. Such regulations shall prohibit the conduct described in paragraph (1)(B), may prohibit the conduct described in paragraph (1)(C), shall establish the standards described in paragraph (1)(D), shall address the conduct described in paragraph (1)(E), and may establish such other standards relating to marketing under Medicare Advantage plans and prescription drug plans as the Secretary determines appropriate. The Secretary shall ensure that such regulations take effect not later than the date that is 10 months after the date of enactment of this subsection. (C)

Consultation

In establishing requirements under this subsection, the NAIC or Secretary (as the case may be) shall consult with a working group composed of representatives of Medicare Advantage organizations and PDP sponsors, consumer groups, and other qualified individuals. Such representatives shall be selected in a manner so as to insure balanced representation among the interested groups. (3)

State reporting of violations of standardized marketing requirements

The Secretary shall request that States report any violations of the standardized marketing requirements under the regulations under subparagraph (A) or (B) of paragraph (2) to national and regional offices of the Centers for Medicare & Medicaid Services. (4)

Report

The Secretary shall submit an annual report to Congress on the enforcement of the standardized marketing requirements under the regulations under subparagraph (A) or (B) of paragraph (2), together with such recommendations as the Secretary determines appropriate. Such report shall include— (A)a list of any alleged violations of such requirements reported to the Secretary by a State, a Medicare Advantage organization, or a PDP sponsor; and (B)the disposition of such reported violations. . (2)

State authority to enforce standardized marketing requirements

(A)

In general

Section 1856(b)(3) of the Social Security Act (42 U.S.C. 1395w–26(b)(3)) is amended— (i)by striking or State and inserting , State; and (ii)by inserting , or State laws or regulations enacting the standardized marketing requirements under subsection (c) after plan solvency. (B)

No preemption of State sanctions

Nothing in title XVIII of the Social Security Act or the provisions of, or amendments made by, this Act, shall be construed to prohibit a State from imposing sanctions against Medicare Advantage organizations, PDP sponsors, or agents or brokers of such organizations or sponsors for violations of the standardized marketing requirements under subsection (c) of section 1856 of the Social Security Act (as added by paragraph (1)) as enacted by that State. (3)

Conforming amendment

Section 1851(h)(4) of the Social Security Act (42 U.S.C. 1395w–21(h)(4)) is amended by adding at the end the following flush sentence: Beginning on the effective date of the implementation of the regulations under subparagraph (A) or (B) of section 1856(c)(2), each Medicare Advantage organization with respect to a Medicare Advantage plan offered by the organization (and agents of such organization) shall comply with the standardized marketing requirements under section 1856(c).. (b)

Medicare prescription drug program

Section 1860D–4 of the Social Security Act (42 U.S.C. 1395w–104) is amended by adding at the end the following new subsection: (l)

Standardized marketing requirements

A PDP sponsor with respect to a prescription drug plan offered by the sponsor (and agents of such sponsor) shall comply with the standardized marketing requirements under section 1856(c). .

3.

State certification prior to waiver of licensure requirements under Medicare prescription drug program

(a)

In general

Section 1860D–12(c) of the Social Security Act (42 U.S.C. 1395w–112(c)) is amended— (1)in paragraph (1)(A), by striking In the case and inserting Subject to paragraph (5), in the case; and (2)by adding at the end the following new paragraph: (5)

State certification required

(A)

In general

The Secretary may only grant a waiver under paragraph (1)(A) if the Secretary has received a certification from the State insurance commissioner that the prescription drug plan has a substantially complete application pending in the State. (B)

Revocation of waiver upon finding of fraud and abuse

The Secretary shall revoke a waiver granted under paragraph (1)(A) if the State insurance commissioner submits a certification to the Secretary that the recipient of such a waiver— (i)has committed fraud or abuse with respect to such waiver; (ii)has failed to make a good faith effort to satisfy State licensing requirements; or (iii)was determined ineligible for licensure by the State. . (b)

Effective date

The amendments made by paragraph (1) shall apply with respect to plan years beginning on or after January 1, 2008.

4.

NAIC recommendations on the establishment of standardized benefit packages for Medicare Advantage plans and prescription drug plans

Not later than 30 days after the date of enactment of this Act, the Secretary of Health and Human Services shall request the National Association of Insurance Commissioners to establish a committee to study and make recommendations to the Secretary and Congress on— (1)the establishment of standardized benefit packages for Medicare Advantage plans under part C of title XVIII of the Social Security Act and for prescription drug plans under part D of such Act; and (2)the regulation of such plans.