CMS proposes sweeping changes to Medicare Advantage and Part D marketing activity requirements
In a Proposed Rule released on December 27, 2022, the Centers for Medicare and Medicaid Services (CMS) outlined a broad range of proposals related to the Medicare Advantage (MA) program, Medicare Prescription Drug Benefit (Part D), and certain other plans and programs.
Among those proposals are changes to more strictly regulate marketing activities. The proposed changes reflect CMS’s increased focus on marketing over the past several years. Recent CMS initiatives have included new rules on third-party marketing organizations (TPMOs), revision of the Medicare Communications and Marketing Guidelines, and the release of multiple bulletins related to marketing issues. Similarly, in November 2022, the US Senate Committee on Finance issued a report on MA marketing practices.
This continued focus suggests that any final rule that may be published later this year is likely to retain many of the marketing proposals outlined in the December 27 document. For a broader summary of the Proposed Rule, see our January 5 alert.
In this alert, we summarize the items in the Proposed Rule specifically related to marketing. Comments on the Proposed Rule are due by 5pm ET on February 13, 2023.
Proposed marketing regulations
- Requiring TPMOs to submit marketing materials. Currently, TPMOs must send materials to each applicable MA organization or Part D plan sponsor for each one to individually submit materials on a TPMO’s behalf through the Health Plan Management System (HPMS), which is CMS’s system of record for marketing materials. Since 2021, TPMOs have been permitted, but not required, to submit materials to HPMS with the prior approval of an MA organization or Part D plan sponsor. CMS is now proposing to make that submission mandatory when a TPMO develops marketing materials for multiple MA organizations and Part D plan sponsors.
- Prohibiting marketing of benefits in a service area where those benefits are not available. With this proposal, CMS is particularly targeting national advertising that promotes the availability of certain benefits (eg, dental and vision) or even money back on a beneficiary’s Social Security check, but the benefit is not available in every market or to all Medicare beneficiaries. CMS is, therefore, proposing to prohibit such marketing, unless unavoidable in a local market.
- Prohibiting the marketing based on information about savings available to potential enrollees that are based on a comparison of typical expenses borne by uninsured individuals, costs that dually eligible beneficiaries are not responsible to pay, or other unrealized costs of a Medicare beneficiary. CMS is seeking to address advertisements where most beneficiaries are not saving the advertised amount of money because they never would have incurred many of those out-of-pocket expenses since they already have some type of coverage. CMS wants to end advertisements about savings that are generally accurate only if the targeted beneficiaries had no coverage at all.
- Imposing stricter requirements on marketing content and formats. In addition to the aforementioned changes, the Proposed Rule would impose various other new restrictions on marketing content and format. For example, it would prohibit any lead generation marketing that does not clearly identify the names of the MA organizations or Part D plan sponsors offering the advertised benefits. It would also limit the use of fine print for disclaimers as well as establish rules for the pace certain disclosures must be read.
- Requiring MA organizations and Part D plan sponsors to have an oversight plan that monitors agent/broker activities and reports agent/broker non-compliance to CMS.As proposed, MA organizations and Part D plan sponsors would be expected to take a proactive, instead of a reactive, approach in monitoring and addressing inappropriate agent and broker behavior. CMS does not want to wait for information to make its way via CMS’s own hotline to then inform the MA organizations and Part D plan sponsors. If finalized, MA organizations and Part D plan sponsors will need to develop oversight programs that include reviews of internal grievances, 1-800-MEDICARE complaints, random samplings of past audio calls, listening to sales/marketing/enrollment calls in real-time, secretly shopping in-person education and sales events, and secretly shopping web-based education and sales events. CMS expects that such a program will identify inadequately trained agents and brokers, misunderstandings by agents and brokers of the product offerings, and other improper marketing by agents and brokers. The program would include corrective actions, such as tailored training or disciplinary measures, and require reporting non-compliance to CMS as well.
- Placing discrete limits on the use of the Medicare name, logo, and Medicare card. CMS is proposing a prohibition on MA organizations and Part D plan sponsors and downstream vendors using the Medicare name, CMS logo, and products or information issued by the Federal Government, including the Medicare card, in a misleading way. CMS is specifically concerned about seeing the word “Medicare” and logos that appear very similar to government logos used in ways that make the store, website, mailing or other communication appear to be an official government communication. CMS’s review of disclaimers identifying the products as non-governmental has not alleviated its concerns, pointing out the use of small font size and that they are often mixed with other disclaimers, including some required by CMS. Under the proposal, if CMS has concerns about the use of governmental logos, names, or marks by a downstream vendor of an MA organization or Part D plan sponsor, CMS would address the issue directly with the MA organization or Part D plan sponsor and would hold them accountable for the misleading information.
- Limitations on use of superlatives in marketing materials. CMS expects any superlatives used in advertising to be true for the specific service area for which the advertising is deployed. By way of example, an MA organization could not say it has the “largest” network, even if true nationally, if it is not true for the particular service area where the advertising is deployed. Some of the biggest changes CMS is proposing include requiring marketing materials to start listing source materials for any claims (instead of merely providing that substantiation to CMS) and limiting the permitted source materials to the current and prior plan years.
Other proposals in the Proposed Rule target a variety of other aspects of MA and Part D marketing by MA organizations, Part D plan sponsors, agents, brokers and TPMOs, including:
- Notifying enrollees annually that they can opt out of plan business calls.
- Requiring plan website’s provider directories be searchable by all required elements.
- Requiring plans to list medical benefits at the beginning of the Summary of Benefits and in the specified order by current regulations: (1) monthly plan premium; (2) deductible/out-of-pocket limits; (3) inpatient/outpatient hospital coverage; (4) ambulatory surgical center; (5) doctor visits (primary care providers and specialists); (6) preventive care; (7) emergency care/urgently needed services; (8) diagnostic services/labs/imaging; (9) hearing services/dental services/vision services; and (10) mental health services.
- Labeling the non-renewal notice as standardized rather than a model.
- Limiting the ability of plans and agents to contact prospective enrollees beyond six months from the time they submit a Scope of Appointment (SOA) or Business Reply Card (BRC).
- Clarifying that the prohibition on door-to-door contact without a prior appointment still applies after collection of a BRC or SOA.
- Adding “effect on current coverage” to the Pre-enrollment Checklist (PECL), as well as requiring agents to discuss the PECL during an enrollment call.
- Limiting the requirement to record calls between TPMOs and beneficiaries to sales and enrollment calls.
- Modifying the TPMO disclaimer to add State Health Insurance Programs as an option for beneficiaries to obtain help.
- Clarifying the requirement to record calls between TPMOs and beneficiaries such that it is clear that the requirement includes virtual connections such as Zoom and Facetime.
These proposals remain subject to the ongoing comment period and further changes by CMS in any final rule that may be issued later this year. If finalized, these marketing-related proposals are likely to significantly impact MA and Part D marketing, including how TPMOs, and even healthcare providers, communicate with Medicare beneficiaries about their coverage. Interested stakeholders may want to consider submitting comments by the February 13, 2023 due date.
For any questions about these proposals or assistance with submitting comments, please contact your DLA Piper relationship partner or any of the authors of this alert.