SEC. 103. Prohibitions and limitations on certain sales and marketing activities under Medicare Advantage plans and prescription drug plans.

(a) Prohibitions.—

(1) Medicare advantage program.—

(A) In general.—Section 1851 of the Social Security Act (42 U.S.C. 1395w–21) is amended—

(i) in subsection (h)(4)—

(I) in subparagraph (A)—

(aa) by striking “cash or other monetary rebates” and inserting “, subject to subsection (j)(2)(C), cash, gifts, prizes, or other monetary rebates”; and

(bb) by striking “, and” at the end and inserting a semicolon;

(II) in subparagraph (B), by striking the period at the end and inserting a semicolon; and

(III) by adding at the end the following new subparagraph:

“(C) shall not permit a Medicare Advantage organization (or the agents, brokers, and other third parties representing such organization) to conduct the prohibited activities described in subsection (j)(1); and”; and

(ii) by adding at the end the following new subsection:

“(j) Prohibited activities described and limitations on the conduct of certain other activities.—

“(1) Prohibited activities described.—The following prohibited activities are described in this paragraph:

“(A) Unsolicited means of direct contact.—Any unsolicited means of direct contact of prospective enrollees, including soliciting door-to-door or any outbound telemarketing without the prospective enrollee initiating contact.

“(B) Cross-selling.—The sale of other non-health related products (such as annuities and life insurance) during any sales or marketing activity or presentation conducted with respect to a Medicare Advantage plan.

“(C) Meals.—The provision of meals of any sort, regardless of value, to prospective enrollees at promotional and sales activities.

“(D) Sales and marketing in health care settings and at educational events.—Sales and marketing activities for the enrollment of individuals in Medicare Advantage plans that are conducted—

“(i) in health care settings in areas where health care is delivered to individuals (such as physician offices and pharmacies), except in the case where such activities are conducted in common areas in health care settings; and

“(ii) at educational events.”.

(2) 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) Requirements with respect to sales and marketing activities.—The following provisions shall apply to a PDP sponsor (and the agents, brokers, and other third parties representing such sponsor) in the same manner as such provisions apply to a Medicare Advantage organization (and the agents, brokers, and other third parties representing such organization):

“(1) The prohibition under section 1851(h)(4)(C) on conducting activities described in section 1851(j)(1).”.

(3) Effective date.—The amendments made by this subsection shall apply to plan years beginning on or after January 1, 2009.

(b) Limitations.—

(1) Medicare advantage program.—Section 1851 of the Social Security Act (42 U.S.C. 1395w–21), as amended by subsection (a)(1), is amended—

(A) in subsection (h)(4), by adding at the end the following new subparagraph:

“(D) shall only permit a Medicare Advantage organization (and the agents, brokers, and other third parties representing such organization) to conduct the activities described in subsection (j)(2) in accordance with the limitations established under such subsection.”; and

(B) in subsection (j), by adding at the end the following new paragraph:

“(2) Limitations.—The Secretary shall establish limitations with respect to at least the following:

“(A) Scope of marketing appointments.—The scope of any appointment with respect to the marketing of a Medicare Advantage plan. Such limitation shall require advance agreement with a prospective enrollee on the scope of the marketing appointment and documentation of such agreement by the Medicare Advantage organization. In the case where the marketing appointment is in person, such documentation shall be in writing.

“(B) Co-branding.—The use of the name or logo of a co-branded network provider on Medicare Advantage plan membership and marketing materials.

“(C) Limitation of gifts to nominal dollar value.—The offering of gifts and other promotional items other than those that are of nominal value (as determined by the Secretary) to prospective enrollees at promotional activities.

“(D) Compensation.—The use of compensation other than as provided under guidelines established by the Secretary. Such guidelines shall ensure that the use of compensation creates incentives for agents and brokers to enroll individuals in the Medicare Advantage plan that is intended to best meet their health care needs.

“(E) Required training, annual retraining, and testing of agents, brokers, and other third parties.—The use by a Medicare Advantage organization of any individual as an agent, broker, or other third party representing the organization that has not completed an initial training and testing program and does not complete an annual retraining and testing program.”.

(2) Medicare prescription drug program.—Section 1860D–4(l) of the Social Security Act, as added by subsection (a)(2), is amended by adding at the end the following new paragraph:

“(2) The requirement under section 1851(h)(4)(D) to conduct activities described in section 1851(j)(2) in accordance with the limitations established under such subsection.”.

(3) Effective date.—The amendments made by this subsection shall take effect on a date specified by the Secretary (but in no case later than November 15, 2008).

(c) Required inclusion of plan type in plan name.—

(1) Medicare advantage program.—Section 1851(h) of the Social Security Act (42 U.S.C. 1395w–21(h)) is amended by adding at the end following new paragraph:

“(6) Required inclusion of plan type in plan name.—For plan years beginning on or after January 1, 2010, a Medicare Advantage organization must ensure that the name of each Medicare Advantage plan offered by the Medicare Advantage organization includes the plan type of the plan (using standard terminology developed by the Secretary).”.

(2) Prescription drug plans.—Section 1860D–4(l) of the Social Security Act, as added by subsection (a)(2) and amended by subsection (b)(2), is amended by adding at the end the following new paragraph:

“(3) The inclusion of the plan type in the plan name under section 1851(h)(6).”.

(d) Strengthening the ability of States to act in collaboration with the Secretary to address fraudulent or inappropriate marketing practices.—

(1) Medicare advantage program.—Section 1851(h) of the Social Security Act (42 U.S.C. 1395w–21(h), as amended by subsection (c)(1), is amended by adding at the end the following new paragraph:

“(7) Strengthening the ability of States to act in collaboration with the Secretary to address fraudulent or inappropriate marketing practices.—

“(A) Appointment of agents and brokers.—Each Medicare Advantage organization shall—

“(i) only use agents and brokers who have been licensed under State law to sell Medicare Advantage plans offered by the Medicare Advantage organization;

“(ii) in the case where a State has a State appointment law, abide by such law; and

“(iii) report to the applicable State the termination of any such agent or broker, including the reasons for such termination (as required under applicable State law).

“(B) Compliance with state information requests.—Each Medicare Advantage organization shall comply in a timely manner with any request by a State for information regarding the performance of a licensed agent, broker, or other third party representing the Medicare Advantage organization as part of an investigation by the State into the conduct of the agent, broker, or other third party.”.

(2) Prescription drug plans.—Section 1860D–4(l) of the Social Security Act, as amended by subsection (c)(2), is amended by adding at the end the following new paragraph:

“(4) The requirements regarding the appointment of agents and brokers and compliance with State information requests under subparagraphs (A) and (B), respectively, of section 1851(h)(7).”.

(3) Effective date.—The amendments made by this subsection shall apply to plan years beginning on or after January 1, 2009.

(Source: http://thomas.loc.gov/home/gpoxmlc110/h6331_enr.xml#toc-H0FB8D2BCBCA2466EA4B98483D3283ECB)