In September 2008, the Centers for Medicare and Medicaid Services (CMS) released a staggering set of new sales and marketing guidelines. The stricter regulations tightened the rules on seminars, outlawed cold calling, restructured the way commissions are paid, and entirely changed the rules of the game for producers involved in the Medicare Advantage market.
One of the biggest changes was the elimination of cold calling. Previously one of the most-used methods of contacting prospective clients, cold calling is no longer acceptable under CMS guidelines. This has forced agents to come up with more creative methods of contacting seniors who are new to Medicare.
Seminar marketing restrictions have also dealt a harsh blow to producers involved in the Medicare market. Not only are agents forbidden from discussing specific products at their seminars, they may not approach prospects about setting up private appointments. Rather, after the seminars (now called “educational events”), the prospect must come up to the agent of his or her own accord, and request an appointment themselves. Then, the prospect must sign a scope-of-appointment form agreeing to the terms of the appointment, and the agent must be sure to stay within the limits of the agreed-upon topics when they meet.
And the restrictions don’t stop there. Ever since the initial rules were released, CMS has issued a steady stream of updates to the guidelines, constantly changing and tweaking the rules. This has forced every producer involved in Medicare to rethink their practice, coming up with new ways to reach out to clients.
In fact, the tougher regulations have some agents so concerned about CMS that, even though they are confident they aren’t doing anything wrong, they still fear any attention. The Agent’s Sales Journal contacted several agents in preparation for this story, and many of them said they did not feel comfortable talking to the press. Some even said they were considering leaving the business.
In order to help you understand what you can do to make CMS’ rules work for you, we spoke with four agents about how their practices have changed, what has and hasn’t been effective for them, and what they plan to do differently this year.
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Mark LaSuer
Independent agent, LaSuer and Associates
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What was the biggest challenge for you when CMS changed the marketing and sales guidelines?
Obviously, it changed marketing quite a bit because there are much stricter guidelines on how we may market to the people. But the biggest change, in my view, was the requirement for the scope-of-appointment form. It really did put a kink in your marketing. I still do seminars, and those rules have changed, too. You can’t just ask them to meet with you one-on-one. You can have your business cards available, but you can’t have a sign-up sheet, and you can’t collect any phone numbers or names. You can just talk generic Medicare programs; you can’t talk specifics.
What kind of changes did you make to your practice?
The biggest change I made was I ordered more on my lead program. I doubled my list of people who turned 65 and people interested in Medicare Advantage and Medicare supplement. I doubled that just for my protection so I would get more return. In doing that, I got leads in hand, but with the seminar, I cut down, primarily because people were getting inundated with seminars. When Medicare Advantage first became available in [my state], seminars were very popular and well-attended. But then people kind of hit a saturation point, so they sort of dropped off. I found the seminars were not as productive as they were in previous years.
Do you think CMS did the right thing?
In all honesty, I think these changes were badly needed. The abuses that I saw and witnessed in the last three to four years since Medicare Advantage programs were approved in [my state] were outrageous. People were knocking on doors and saying, “I work for Medicare,” all types of abuses to confuse the seniors. The regulations were, to some, viewed as extreme. But I’m glad CMS took this route because it was badly needed.
Have you ever been shopped by CMS?
I think so. I was not approached by them, but I am sure that they were in at least one of my seminars. But if you’re aboveboard, it doesn’t matter. My mom and dad are both 85 years old and have all kinds of health problems, so I’m very sensitive in working with seniors. I know how these people can be taken advantage of, and I’ve seen the kinds of marketing materials that my parents have received over the years. In my seminars, I’ve always said I pretend like my mom and dad are sitting there, so I don’t fear anybody coming in to shop me.
What do you plan to do differently this year?
The biggest change coming this year is there are a lot of companies that are not going to be renewing their contracts with CMS. For myself, I will be using CMS-approved marketing materials, but primarily there’s going to be a lot of fall out, so I’m going to be starting early and trying to get marketing materials approved regarding the fact that [the client’s] company may be leaving the area and [they] might need a change. But a lot of companies will be leaving, so I’m preparing to address that. |
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Eric Pinkerton
Representative, Aetna Medicare
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How did you have to change your practice last year when CMS released its new marketing and sales guidelines?
Before the new regulations, I would just give people a call, but now you need a written statement saying that you can call them. Things have changed so much that you have to do everything by mail. So I’m doing a lot of mailers and just trying to get people to call me and get the process started from there, instead of the other way around. Not being able to call people has changed things for me so much.
Was there anything that you tried that didn’t work as well as you’d hoped?
We have various marketing material that we can send out, and we learned that if it’s not an aggressive ad, people have no response at all. We have to have material that states our copays and our benefits and why we’re one of the best companies out there. We have to get everything approved [by CMS], obviously, but our marketing is vitally important right now. Without good marketing, people aren’t going to respond, and we don’t get leads beyond just the trickle down effect.
Do you have any plans to try anything new for this year’s selling season?
At this point, no, we’re just still continuing to do what we’ve always done. Right now, I’m trying to figure out which mailer gets the best response and what marketing campaign gets the best response, so I’ve been tracking them. When people call in, I ask, “How’d you hear about me?” “What did you get in the mail?” and they’re happy to tell you everything. I’ll always try new mailers, but the one that gets the best results is the one that I’ll continue to go with. The other reps I work with are all in the same boat. We’re trying to figure out what sort of marketing material to send out that will get people’s attention, but we’re still in the learning phase. |
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Angela Roach
Owner and CEO, Insurance Professionals of America
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Last year, CMS rolled out its new marketing and sales guidelines. What steps did you take to adjust your practice?
Extra training, especially in regard to the scope-of-appointment forms dealing with the Medicare clientele. It’s a known fact if they are not properly filled out and disclosed up front, we will be fined a $25,000 fine per incident. That’s pretty important to be on top of. It protects the client, and I’m always happy to do that. The only problem that I have with it, and a lot of the other agents that I work with and are around weren’t happy about, is that CMS made changes probably 10 times last season. From November to the end of March, they changed the regulations and the guidelines to [get] the protocol to what it is now. But it is what it is. We don’t have to like it, but we have to adhere to the rules. If you can’t be flexible in this industry, you’re really at a disadvantage.
Have you learned anything from the adjustments that you made, or did you experience any big successes or failures?
I work with [some companies] that are really good at sending updates, and it’s our responsibility to read those no matter how busy we might be. So I think my biggest success has been to always pay attention to that, more so than I had before.
What do you plan to do differently this year?
That really all depends on what happens with CMS. A lot of things are going to change, and the structure of our seminars is vital. I hold one seminar a week, so the changes to the seminars are huge. Now we’re not allowed to have the scope-of-appointment forms out or even a sign-in sheet.
It’s pretty strict. It does protect, like I said before, the client from getting pressured into any insurance plan that they might not be ready for. But I believe I’m appointed with close to 50 carriers and that leaves me with really no 100-percent obligation to any particular carrier.
That’s always what we have to do. This is a never-ending change process in our business. I receive numerous emails every day of different things going on with different carriers, and you just have to try to keep ahead of the curve. |
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Hector Rodriguez
Independent agent
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What did you do last year to adjust your practice to the new CMS regulations?
We focused on community outreach and community marketing. I participated in a lot of events, Hispanic expos, and business expos. You just have to go and participate with the events people, and the events people get to know who you are, and you get a lot of referrals that way. You can do community events, and people will ask for your business card. You can network through there. That’s the easiest way to do it now, and we didn’t run into issues with the CMS educational event guidelines. We didn’t do any seminar marketing last year.
Did you run into any problems, or find anything that was particularly effective?
Not really in the sales or marketing. But they really hurt us with the restructuring of the commission. I don’t know how they figured out the different structure for the brokers and the captive agents, but the captive agents are actually making more money than [the independent brokers]. But you’re still dealing with the same issues, it’s just less money. If the customer’s not satisfied with the plan you have to switch them … It’s just more work and less money. What saddens me is, who’s going to guarantee me that these companies are going to be around in three or four years to pay me these residuals? It’s out of the agent’s control, and that’s a scary thing.
What do you plan to do differently this year?
This year is a little tough. It all depends on the news with all the companies and what’s going on with the economy. For now, I’m just going to go ahead and continue doing the same thing, with community marketing, work your book of business, hand out newsletters, fliers, and definitely touch your book of business as much as you can. I work on referrals a lot; 90 percent of my business is from referrals, so the No. 1 thing I can say is, work your book of business. |
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Another Perspective: How CMS Has Changed a BGA
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Insurance producers aren’t the only industry players who have been affected by the stricter Medicare Advantage guidelines set forth by CMS — brokerage agencies and insurance wholesalers are feeling the effects of the changes, too.
Sam Halpern, director of Internet marketing for Senior Market Sales Inc., discusses what his BGA did to adjust to the new regulations.
What did you do to make the new CMS marketing and sales guidelines work for you?
Because of our strong relationship with a number of carriers, more than one carrier was giving us a number of leads that they couldn’t follow up on. We got tens of thousands of leads from carriers, and we gave those to our agents. There are two scenarios where that happened.
The insurance company has a call center, and in some cases it’s populated with agents, and in some cases it’s not. But if [it’s] not populated with agents, they can’t compare plans or answer questions when people call; they have to say, “I’m sorry, I’m not allowed to do that.” Then, when the customer asks to speak with someone who can help them compare plans, the carrier will give the lead to us, and we’ll pass them to our agents.
Another example that’s even more interesting and unusual is that you can contact an existing policyholder. So if a carrier has 10,000 Part D policyholders, and that carrier has a private fee-for-service plan, they are allowed to cold call that person and inform them about the values of the product that they have from the same carrier.
So an agent can’t call somebody, but the carrier can. And the carrier has the right to deem an agent to act on their behalf, and the agent can behave as if they are an agent of the carrier, if they strictly offer another product from the same carrier. For this exception, the agent has to destroy the leads that the carrier gave him after March 31, and has to agree to be a representative of the carrier that gave him the leads while he’s talking to those leads. [But for all other intents and purposes, he is an independent agent.]
They have to follow a script, and they have to sign an addendum to their contract saying that they’re going to call your existing customers for Part D, and you can call them to talk about the private fee-for-service or Med Advantage that may be available to them in their county. But every agent should ask their marketing company about this.
Carriers will also give us overflow during peak call time, such as Christmas and Thanksgiving, when the call center is too busy. They just start taking names and numbers and then give them to us, and we give them to our agents to follow through.
So even though our agents can’t call out unsolicited anymore, we’re still finding ways to work with carriers and make it possible for them to meet with new prospects. | |
Heather Trese is the associate editor of the Agent’s Sales Journal. She can be reached at 800-933-9449 ext. 225 or HTrese@AgentMediaCorp.com.