Article from BestWire Online

In the brave new world of marketing Medicare prescription drug plans to millions of U.S. seniors, consultants say managed-care companies should make sure brokers with whom they have distribution partnerships follow the government's intricate maze of complex marketing guidelines.

"The feds are watching very carefully," said John Gorman, president and chief executive officer of Gorman Health Group, a Washington, D.C.-based managed care industry consultant. "Anytime you’ve got over 600 plans with a drug benefit hitting the market at exactly the same time, the biggest problem you are going to have is that beneficiaries get overwhelmed and confused.

"The other problem...is that of those 600 plans, hundreds of them are newcomers to the Medicare program who don't really yet know the rules," he said.

The Centers for Medicare & Medicaid Services' latest marketing guidelines for drug plans were released in August in a complex 164-page document.

About 42 million elderly and disabled Americans have health insurance coverage under the federal Medicare program.

If the guidelines aren't followed, the agency can freeze plans' enrollment, issue fines or "kick them out" of the program, said Peter Ashkenaz, a CMS spokesman. Among the intricate list of guidelines are that companies cannot sell door to door or use health-care professionals to urge enrollment in a certain plan.

CMS, he added, will soon announce companies with which it will contract to help identify and take action on marketing violations or possible fraud.

In addition to forming partnerships with pharmacies, many companies formed partnerships with senior-focused insurance carriers to leverage their extensive brokers networks, according to Scott J. Fidel, a senior managed care analyst with JP Morgan Securities.

PacifiCare Health Systems Inc., for example, teamed up with insurance carriers covering more than 1.5 million Medicare supplement members and having distribution relationship with up to 30,000 insurers, brokers and agents, Fidel wrote recently. These brokers also have existing relationships with policyholders who are likely to switch to the new Part D product.

Broker compliance with the marketing guidelines is going to be a major issue for managed care companies, said Jeff Fox, a principal with Gorman Health.

Brokers can cast a wide marketing net — wider than a company's employed sales force, added Gregory Scott, a principal in Deloitte Consulting LLP's health plan consulting practice. Scott warned that there's lots of regulations concerning these intermediaries in the new Medicare Part D benefit.

CMS states in its marketing guidelines the companies are to hold these brokers to the same regulations they hold for their own, employed sales representatives, Fox pointed out. "The health plans are going to be responsible — not only on the sales side, but how these brokers market" the companies' plans, he said.

In the near term, companies are finding major challenges in getting CMS' approval of marketing materials. The goal was to have CMS' approval of the plans' enrollment kits by Oct. 1, but several companies haven't received that approval yet, Fox said. Companies can't start advertising until they have these kits, containing summary of benefits, approved to send out to seniors.

On Oct. 1, managed-care organizations were to begin their media blitzes to seniors, including TV commercials, print advertisements and direct mail. Many of the big, publicly traded companies have already formed partnerships with national retail pharmacies and retail chain stores like Walgreens, CVS, Rite Aid, Eckerd and Wal-Mart, to educate seniors and provide enrollment information on prescription-drug safety through in-store and community events.

Enrollment starts Nov. 15. Coverage begins Jan. 1, 2006.

The major companies, including WellPoint Inc., UnitedHealth Group, PacifiCare, Aetna Inc., Cigna Inc. and Humana, already have spent $325 million in preparing for drug plan launches, which includes marketing (BestWire, Sept. 21, 2005).

Scott said all the big players invested significant amounts of money into the top advertising and public relations agencies. But CMS is pushing companies, big and small, to use its boilerplate language for drug plan marketing materials. That's "at odds with the Madison Avenue approach that a lot of the health plans would like to take," he said.

Cigna has launched a national TV campaign. Amy Turkington, a spokeswoman for Cigna HealthCare, said the company's ads feature Florence Henderson and Hal Linden, "two celebrities familiar to viewers who are Medicare eligible."

PacifiCare will launch its "Choice is Swell" national TV campaign Oct. 15, featuring the Fred and Ethel characters from the classic "I Love Lucy" TV show. Ads will air on all major networks, including ABC, CBS and CNN.

Giant WellPoint is not planning a major TV blitz, although the company will soon have TV commercials aired in local markets, said Lynne Gross, vice president and general manager of senior markets for Anthem Inc, a unit of WellPoint.

Aetna will launch a multifaceted marketing and advertising campaign, to include TV, print ads and direct mail, in mid-October, said spokeswoman Elizabeth Sell.

UnitedHealth and Coventry Health Care couldn't be reached for immediate comment.

Humana has been running its marketing campaign since mid-July, in addition to the company's "Let's Talk" educational campaign, which involves several RVs crisscrossing the United States making nearly 500 stops in many cities, said Mary Sellers, a spokeswoman. Print ads and TV spots are already running in local markets, she said.