MA Plans Gear Up for Shortened 2012 AEP With Ideas Designed to Shrink Sales Cycle

MA Plans Gear Up for Shortened 2012 AEP With Ideas Designed to Shrink Sales Cycle

Reprinted from MEDICARE ADVANTAGE NEWS, biweekly news and business strategies about Medicare Advantage plans, product design, marketing, enrollment, market expansions, CMS audits, and countless federal initiatives in MA and Medicaid managed care.

By James Gutman, Managing Editor

April 7, 2011Volume 17Issue 7

Medicare Advantage plans already are gearing up for an Annual Election Period (AEP) this fall that is almost mind-boggling in its challenges. First and foremost, the total time for marketing and sales combined is shrinking to 10 weeks from the previous 13. Second, because of the compressed period and earlier start for sales (Oct. 15 instead of Nov. 15), marketing materials need to be into CMS for review by June 30. Third, MA plans’ Annual Notice of Changes (ANOCs) in benefits must arrive in beneficiaries’ homes by Sept. 30, making it important to reach members with marketing pieces shortly after that if the changes are negative.

Executives of two MA plans detailed what they are doing about those and other issues related to the shortened AEP in two sessions of the Medicare Marketing & Enrollment Strategies 2011 conference, sponsored by World Research Group, in Tysons Corner, Va., March 30. And their strategies include heavy doses of the non-product¬specific marketing that is allowed before the official start of marketing Oct. 1. The plans also intend to use several different kinds of both acquisition and retention marketing designed to ensure that hot prospects and current members are fully signed up for 2012 by the Dec. 7 end of the AEP.

Such a strategy is especially important because there will be only 10 days to market this year after Thanksgiving weekend, which traditionally has been a “black hole” for MA enrollment, said Craig Hayden, director of Medicare sales for CDPHP (formerly known as Capital District Physicians Health Plan) in upstate New York.

“Acquisition has [already] started in my mind,” Hayden told conference attendees. He is getting the sales force focused on “referral sources development,” as well as lining up sales agents themselves and preparing September marketing efforts to get the plan’s name and “branding message” in front of prospects. That follows a 2011 AEP in which he said CDPHP Medicare Choices plans got a lot of responses to their marketing efforts but not a lot of sales.

The toughest part of the new AEP schedule, he suggested, is for marketing, especially since there are only two weeks for product-benefits-specific marketing before enrollment starts Oct. 15, and since the end of the AEP now is Dec. 7 instead of Dec. 31 as before.

Among the ways CDPHP, a 4.5-star plan with about 27,000 MA members in a largely rural area, may try to deal with the compressed marketing time frame is continued use of “town hall”-type meetings for members, Hayden said. CDPHP gets about 20% of its members to attend them, which it treats “like sales events,” and the plan gains from having a “captive audience” and targeted message that can combine to reduce “shopping” by plan members during the AEP. There are problems with these sessions, however, he notes, including “heavy time investment” and expense, which can be about $1,500 for a typical 200-attendee meeting.

Direct mail (DM), of course, also is a part of CDPHP’s arsenal for the AEP, and the plan will look to “lead with an emotional appeal,” according to Hayden. The downside to DM is the “crowded mailbox problem” during AEP, with so many plans mailing to seniors. Moreover, he said, once late November comes in the new AEP time frame, the plan will have to use much-more-costly first-class mail to be sure beneficiaries receive the mailings before Dec. 7.

Hayden and several conference attendees reported experiencing mail delivery-time problems during the AEP for 2011.

Calendar Poses Obstacle for Newspaper Ads

Newspaper ads also are an important part of CDPHP’s AEP marketing, since Medicare beneficiaries usually have enough time to read them, he noted. But he added that the calendar poses a problem this year since both the Oct. 1 marketing and Oct. 15 enrollment start dates are on Saturdays, traditionally the lightest-read day for newspapers. CDPHP also has used freestanding newspaper inserts to stand out more and allow inclusion of a business reply card, Hayden said. But the inserts are expensive, require long lead times for scheduling and can get “lost” if the newspaper they’re in has a lot of other inserts.

He said “search-engine marketing” has worked very well for CDPHP, which has found that its seniors aged under 75 now are used to the Internet. The plan, he noted, typically responds to queries it gets online within an hour, but he warned attendees to be careful of what they say in such responses since it can cause compliance issues with CMS. And while CDPHP is “looking at social media,” it’s “highly labor-intensive,” and MA beneficiaries “may not be there yet.”

Other parts of CDPHP’s AEP marketing are television ads — “the key thing on it is to have call-center support when the ad is running” — plus billboards and “wraps” on buses, Hayden said.

For this year’s AEP, he added, CDPHP is going to handle leads during the 10 days that remain after Thanksgiving weekend in a different way than previously. He explained that it wouldn’t work to send new leads then to brokers because of the very limited time left to sell, so “we’re going to try to handle them with our captive sales force.”

This relates to what Paul Carbone, director of sales and marketing for UPMC Health Plan, saw as the key issue for the upcoming AEP — shortening the sales cycle. He told another session of the conference that one big problem with the change from a 13-week to a 10-week AEP is that the last three weeks generated 28% of AEP sales for Pittsburgh-based UPMC’s MA plan in the AEP for 2011.

The way to deal with the shortening, he suggested, is to move more quickly after a marketing lead is generated.

Since the UPMC plan’s “engine of lead generation” still seems to be DM, he noted, it is trying several approaches to shrink the time for acting on DM leads. Carbone said, for example, that UPMC gets a lot of business reply cards in response to DM, and it now quickly scans them into its electronic system, assigns them to sales representatives, tracks the progress online, and can “refocus” if they’re not acted on promptly.

Similarly, according to Carbone, knowing that referrals from friends and neighbors can produce quick sources of new members, it will put a priority on such already-existing efforts as giving flu shots to members that can “put a buzz in the market for you.” That “buzz” in the form of recommendations can shorten the “time to buy” decision. Another plus, he said, comes in the form of 8% of the MA plan’s sales now coming from tech-savvy customers who want to do everything regarding enrollment themselves online. UPMC is trying to make it easier for them to do so, he explained.

The flip side of this is de-emphasizing sales methods that are time consuming, such as seminars, Carbone added.

Like Hayden, Carbone is a fan — albeit with some qualifiers — of non-product-specific September mailings “to get a placeholder in the buyer’s mind.” He said the UPMC plan hit almost a 4% response rate on its September direct mail last year but closed only 5% of those because, it later determined, the responders were just “information seekers, not serious shoppers.” Nevertheless, noted Carbone, UPMC got about 7,000 leads from these September mailings and is planning another September mailing this year.