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Are Your Medicare-Eligible Leads CMS-Compliant?

3 Questions To Ask To Ensure You’re Not Breaking The Law

You’ve probably already heard about the big opportunity Medicare has brought to the health insurance industry. Guaranteed approvals, expanded private carrier options and potentially higher commission rates over the long-term have many producers excited about this fast-growing market.

But new legislation designed to protect seniors have forced many agents to stay on the sidelines for now. The Medicare Improvements for Patients and Providers Act (MIPPA) of 2008 enacted this summer placed strong restrictions on how insurance carriers and producers may market to Medicare-eligible seniors.

The Centers for Medicare & Medicaid Services (CMS), an agency under the Department of Health and Human Services, recently issued new marketing guidelines for health insurance professionals based on the new law.

To the surprise of some agents, many of their traditional marketing and sales tactics are no longer legal when selling to Medicare-eligible seniors.

Many of these new restrictions focus on unsolicited calls. Specifically, cold calls to Medicare-eligible seniors are no longer allowed. The ban even extends to calling past clients or contacting "referred" prospects.

Unfortunately, many types of senior health insurance leads are also no longer allowed under these new guidelines.

To ensure that your leads are CMS-compliant, you’ll need to verify that your lead providers are generating their leads legally - by asking these three crucial questions.

1. Were Leads Generated Through Unsolicited Calls?

For all practical purposes, the CMS guidelines are a serious body blow for many telemarketing companies who target Medicare-eligible seniors.

Just as agents can no longer cold call prospects, lead providers can no longer cold call seniors to become Medicare-eligible leads.

The good news is that CMS doesn’t put third-party leads in the same category as “referred” leads. As noted earlier, CMS prohibits agents from initiating contact with leads referred by friends, family members or even current clients. You can return a call IF the referral calls you first - but agents must not initiate the call.

Third-party leads that are NOT generated through unsolicited calls may be acceptable. It all depends on how the leads were generated. The following are the most common of the acceptable sources for third-party leads:

• Websites
• Advertisements and commercials
• Mailers
• Public sales events

Note that even though mailers are considered acceptable sources for leads, they cannot be used to create an opening for a cold call. For example, producers and lead providers cannot send mailers to Medicare-eligible seniors and then follow up with cold calls to "make sure they received the brochure."

The bottom line is if the consumer didn’t ask to be contacted, then it’s an unsolicited call. And all cold calls are prohibited.

2. Did The Lead Provider Cross-Sell Other Products To The Consumer?

The situation in which the lead was generated is just as important as the method used. So even if leads are not generated through unsolicited calls, they may still be invalid if the situation is wrong.

One of the new CMS restrictions apply to the tactic known as cross-selling. This is when a producer or carrier markets non-health insurance products to a Medicare-eligible prospect. Similar rules apply for lead generation.

Just as producers are no longer allowed to market other “non-health insurance” products while selling Medicare Advantage or supplemental plans, the same restrictions apply for lead generation. In other words, Medicare-eligible leads should only be collected through health insurance websites, advertisements or sales events.

If your Medicare-eligible lead came through a website that also marketed life insurance, annuities, property insurance or magazine subscriptions, then that lead may not be legal.

Unfortunately, too many health insurance leads are generated through such cross-marketing websites. You’ve probably been through them yourself. These websites will often promise you a free iPod, iPhone or laptop. But first, you have to go through pages of questionnaires that collect your personal information and sell it to various agents and businesses.

Medicare-eligible leads generated through such sites are now officially prohibited. To be safe, ask your lead provider for specific websites it uses to generate its Medicare-eligible leads. Then check out those websites. Make sure that those consumer-oriented lead-generation websites are solely focused on health insurance.

3. Did The Prospect Specifically Request To Be Contacted?

Perhaps the most important question to ask is whether their leads requested to be contacted by agents or were informed they were going to be contacted.

As long as the consumer understands that they are requesting to be contacted by agents, those agent calls will not be considered unsolicited.

But make sure that those prospects also asked to be contacted - about health insurance. Contacting a life insurance or annuity shopper about Medicare is not allowed. If they didn’t ask to be contacted about health insurance, then your call is unsolicited.

Unfortunately, these new CMS guidelines may mean that you are now prohibited from calling former clients and prospects who may now be Medicare eligible. If you call them to market your Medicare products, CMS may consider that a cold call.

The best way around that kind of situation is to mail them messages asking them to contact you about their Medicare options. Once they do, you’re free to begin marketing your Medicare-related products.

Even better, consider using a drip marketing email autoresponder to revive your dormant leads. An autoresponder like LeadMiner, for example, can send marketing emails to thousands of your past clients and leads with one click. It will even embed customized rate quotes and notify you as soon as a prospect opens the email or clicks on the link to compare available plans.

Seizing The Potential

It may seem on the surface that these new CMS guidelines are just burdensome regulations. But recent history has shown us that not all regulation is bad.

And the fact that these new CMS guidelines are keeping many agents from entering the potentially lucrative Medicare market may be a very good thing - for you.

Jeremiah Desmarais is vice president of marketing at ProspectZone, a company whose web-based tools and high-quality health insurance leads help agents consistently increase productivity by 2500%. He is the recipient of 9 awards for his marketing and design initiatives online. He is also editor of the ProspectZone Newsletter, which delivers helpful sales articles, tips and marketing strategies to 15,000+ insurance agents monthly. Author of several white papers, Jeremiah is a contributor to the Agent’s Sales Journal, Health Insurance Underwriter and Broker World, as well as a guest speaker at various carrier events and workshops. He is a member of the Society of Industry Leaders.

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Would you like your agents to learn about the latest insurance lead generation tactics and insider news in your own publication? So would we! Please contact jdesmarais@prospectzone.com to inquire about reproducing our content.

Quick Tip

Higher Closing Ratios on Weekends

One way to convert more leads is to make sure that you’re the first to provide a complete sales presentation to prospects. If you’re the first one to help them figure out what they need and provide acceptable plans, your chances of turning those prospects into submitted applications are much higher.

So how do you increase your odds of being the first one to contact prospects? That can be a daunting task, especially if you’re dealing with shared leads that go to multiple agents.

Well, do you remember what banker’s hours used to be? Until the banking industry got really competitive, many banks routinely closed early during the middle of the week. It was not uncommon to see bankers on the golf course or tennis courts during lazy afternoons.

That’s not the case anymore. Banks now have to be open late and even on weekends. I’ve even seen banks open on Sundays.

I mention "banker’s hours" because in today’s competitive health insurance market, you may want to consider adjusting your hours to increase your closing ratios and sales volume.

It’s understandable that most insurance agents prefer to take the weekend off. But many health insurance shoppers have only the weekend to do their shopping. Unfortunately, many leads that come in over the weekend are often not contacted until Monday morning at the earliest.

These weekend leads are a big opportunity for agents looking to improve their contact rates - and closing ratios. So consider keeping your lead flow on for a few weekends. And invest the time in working those weekend leads as soon as they come in.

You may find that many times you’re the only agent on duty — which will mean a lot to busy weekend shoppers.