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In May, we discussed the final rule on Contract Year 2023 Policy and Technical Changes to the Medicare Advantage and Medicare Prescription Drug Benefit Programs (the “Final Rule”) issued by the Centers for Medicare and Medicaid Services (“CMS”). In the Final Rule, CMS established certain marketing and communication requirements for Medicare Advantage (“MA”) organizations and Part D prescription drug sponsors (PDPs), intending to address complaints of inappropriate marketing that indicated it CMS received from beneficiaries and their caregivers.
CMS recently announced that it has been conducting “secret shopping” by calling numbers associated with television advertisements, mailings, newspaper advertisements, and internet searches to monitor the beneficiary experience. CMS found through this investigation that some agents were not complying with current regulations: For more than 80% of the calls reviewed, agents failed to provide the beneficiaries with the necessary information or provided inaccurate information to make an informed choice. As a result, on October 19, CMS released Frequently Asked Questions (“FAQs”) and a memo (“Memo”) on best practices for marketing activities during the 2023 Annual Election Period (“AEP”) running October 15, 2022 to December 7, 2023, focusing on Third-Party Marketing Organizations (“TPMOs”).
CMS' FAQs and Memo come at a time of heightened scrutiny of Medicare marketing practices: In August 2022, Ron Wyden, the Chairman of the United States Senate Committee on Finance, sent a letter to 15 state insurance commissioners and state health insurance assistance programs requesting information about deceptive marketing practices being conducted by MA plans and Part D sponsors, agents and brokers, and others. Wyden asked for information about the kinds of complaints that states are receiving regarding MA and PDP marketing, the responsibilities of agents and brokers to protect consumers from false or misleading marketing, whether certain types of organizations account for disproportionate shares of complaints, and more.
The FAQs discuss both requirements related to recording calls between beneficiaries and TPMOs and requirements related to the TPMO disclaimer. Of note, the FAQs confirm that all calls between a TPMO and a beneficiary must be recorded, with no exceptions. It also clarifies that the TPMO disclaimer is required in all marketing materials, including social media posts, unless the materials were developed by the plan (such as a Summary of Benefits) and the agent is using them exactly as provided by the plan.
The Memo discusses 42 C.F.R. §§ 422.2261(b)(3) and 423.2261(b)(3), which provide that CMS may accept certain types of marketing materials through its File and Use framework rather than require CMS approval before use. Though CMS had previously designated television advertisements as a marketing material that qualifies for File & Use, the Memo states that no television advertisements will qualify for such flexibility beginning January 1, 2023. As a result, these ads must be approved by CMS before use. CMS will also review previously submitted advertisements to ensure compliance with CMS requirements.
The Memo also notes that CMS will enhance its review of select marketing materials submitted under File & Use criteria, review selected marketing materials previously submitted under File & Use criteria, review all marketing complaints received during the AEP, target oversight and review on MA organizations and Part D sponsors with higher rates of complaints during the AEP, review recordings of agent and broker calls with potential enrollees and continue secret shopping.
Consequently, CMS has recommended that MA plans and PDP sponsors implement the following requirements and best practices during the AEP:
In light of CMS' heightened restrictions and the Senate's recent investigations, MA plans and PDP sponsors should review their marketing policies and the practices of their sales organizations for compliance with the Final Rule and CMS guidance.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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