Every year we hear the same refrain from customers driven by information from compliance:

“We can’t allow any changes to addresses.”
“Don’t run NCOA against my list.”
“We have to mail to whatever address we have on file.”

At the National Postal Forum in Nashville this past March, we participated in a roundtable discussing the problem of UAA (Undeliverable As Addressed) mail, facilitated by Tina Dickens, Agency Mail Manager for the Center for Medicare and Medicaid (CMS). UAA mail is mail that cannot be delivered to the name and address specified on the mailpiece, and must be forwarded, returned to sender or treated as waste by the US Postal Service (USPS). How big of a problem is it? In 2016, the USPS dealt with nearly 6.5 BILLION pieces of UAA mail at an estimated cost to the USPS of nearly $1.26 billion. In 2015, first class UAA mail increased again by 0.824% to a rate of 3.74%…its highest level in a decade.

Of course, UAA mail is not just a problem for the USPS, it is also a problem for mailers, especially health insurers who remain heavy users of mail at both first class and standard class rates. For many healthcare plans, UAA mail is a major source of both cost and customer dissatisfaction. High on the list of programs where UAA mail is especially troubling are Medicare mailings, especially the annual notice of change (ANOC) mailing each September. The ANOC mailing, which goes to all active plan members, is both costly to produce AND to mail, so effective management is of extra importance. At CMS, Ms. Dickens knows this problem as well, as CMS sends mail to all Medicare recipients…making her responsible for the managing the largest mail operation that must confront the challenges of addresses provided by the Social Security Administration (that’s right, CMS does not own Medicare addresses, the SSA does).

Every year, plans struggle with interpretation of CMS regulations that seemingly promote the production of known UAA mail by detailing the consequential risks of exposing personally identifiable information (PII) about plan customers. Section 50.2.1.4 in the Medicare Managed Care Manual states:

“An organization is expected to continue to mail materials to the member’s address of record. If the postal service returns a piece of beneficiary communication to the organization, the plan should document the return and retain the returned material. It should continue to send future correspondence to that same address, as a forwarding address may become available at a later date.”

Does this really mean that CMS wants mailers to send to known bad addresses?

As Ms. Dickens articulately communicated in Nashville, it was never the intent of CMS to force mailers to send mail to known bad addresses. What it does want to foster, however, is a process that is driven by clear communication and reasonable documentation of changes, and that relies on evidenced activity to ensure personal privacy and consistent communication.

The language in the CMS guidelines refers to an address that was once considered valid, but has since been found to be undeliverable by a plan and with the plan unable to document verified permanent change of address with the member. If a plan cannot validate an address change as described in Section 50.2.1.3 of the Medicare Marketing Guide, and they have successfully mailed to the address in the past, it is expected that plans continue to do so in case the member or the Post Office establishes a forwarding address. However, if a plan can verify that an address that the member gave them is not the correct deliverable address, it is not expected that plans should continue to send materials to an invalid address. The key in all this conversation is verified and documented action.

At the Postal Forum, we also discussed the use of NCOA addresses. Here, we should start with a clause in Section 50.2.1.3 of the Medicare Marketing Manual:

“If the USPS returns mail with a new forwarding address, forward plan materials to the beneficiary and advise the plan member to change his or her address with the Social Security Administration.”

This clause clearly indicates that if a Change of Address (COA) form has been filed by a member, the plan should acknowledge that change. Drawing on that point, Ms. Dickens pointed out that to not use the NCOA validation available in professional mail management applications, is actually counterintuitive since, if the plan does not use the NCOA address data before mailing, the post office will automatically reroute the mail piece to forward it to the registered NCOA address…only now with a delay of up to 10 days.

Putting Knowledge to Work

Using this information, how can plans implement some best practices heading into the upcoming ANOC season to minimize their UAA mail problems and reduce unnecessary mailing expenses? Here are three basic steps we believe achieve this goal:

1. Immediately before the ANOC mailing process starts, pull the member file and have the addresses CASS certified (Coding Accuracy Support System, the USPS database that helps mailers validate the correct construction of a mailing address) in order to identify potentially non-deliverable addresses.

A) If the list is manageable, initiate phone outreach to validate the mailing address for the member.

B) If the list is too large to do a phone canvas, do a first-class postcard mailing to the non-deliverable addresses indicating that you have important plan information to send to the member (the ANOC mailing) and need address verification. If this card is returned, you should hold this on file as evidence of attempting to complete the ANOC mailing, then initiate the process of working with the member to get a valid address.

2. For the final address list, allow CASS deficient addresses that are deliverable to be structured by CASS to avoid any issues once mailed.

3.  Where an NCOA address value exists during postal verification, apply the NCOA address to the package and retain the CASS/NCOA report for documentation.

In working with mail data, it is important to remember that all data has a level of error and that your job is detection, management and mitigation of risks. Remember that if the postal cleansing identifies packages as non-deliverable, you may be sending mail with PII to unintended recipients. This was never the intent of CMS and your job is documenting your efforts to both abide by the CMS regulations while avoiding unnecessary cost and risk.

In the end, postal optimization is about a process. By building a procedure that acknowledges that mail may or may not be deliverable as addresses, and creating a workflow that helps you manage attendant issues, you will inevitably reduce overall return rates and ultimately improve the quality of service to members while reducing your overall cost of compliance.

NOTE:  The opinions in this article reflect the opinions of the author and are not intended as a legal opinion. Plans should consult with their internal compliance teams to ensure comfort with any of the strategies discussed herein.