In 2021, a Medicare Advantage advertisement featuring former NFL star quarterback, Joe Namath, was placed in the spotlight because of some potentially misleading claims. Though the Centers for Medicare and Medicaid Services (CMS) did not explicitly identify that TV advertisement in guidance issued in October of 2021, it did discuss some of the issues in the national TV Ad.
Subsequently, in May of 2022, CMS finalized rules that may impact Medicare Advantage marketing in 2023. Those rules are now in force. Modifications to the Medicare Marketing Rules introduced by the final rules in 2023 are addressed below.
October 2021 Guidance
On October 8, 2021, CMS released guidance regarding third-party marketing to Medicare Advantage organizations. See: https://medicareadvocacy.org/wp-content/uploads/2021/11/Third-Party-Marketing-Memo-10-8-2021.pdf Consider the following primary points:
- Medicare Advantage Organizations “…are responsible for first tier, downstream or related entities (FDRs) adherence to all terms and conditions of the organization’s contract with CMS…”
- Ads that mention plan premiums, cost sharing, or benefits information – even if they do not discuss a specific plan – constitute marketing materials and plans must submit them to CMS before use.
As a result, CMS suggested that Medicare Advantage plans:
- Do not send letters to confirm enrollment and that beneficiaries understand plan rules. Instead, place outbound calls.
- Monitor fast disenrollments to discover trends.
- Review recorded calls to ensure compliance.
- Require FDR to identify the source of a lead.
- Record all sales calls as well as enrollments.
- Require all FDRs to disclose their third-party relationships.
May 2022 Final Rule. See https://www.law.cornell.edu/cfr/text/42/422.2267
In May, CMS published several final rules related to Medicare Advantage marketing and communications. The new rules were in response to a significant increase in complaints associated with third-party marketing organizations. CMS noted that complaints had more than doubled in a year. The rules intend to clarify how third-party marketing organizations perform Medicare Advantage marketing in 2023 and beyond.
The three updated requirements include:
- CMS further defined what constitutes a third-party marketing organization to eliminate confusion. It updated the definition to state: “Third-party marketing organization (TPMO) means organizations and individuals, including independent agents and brokers, who are compensated to perform lead generation, marketing, sales, and enrollment-related functions as a part of the chain of enrollment (the steps taken by a beneficiary from becoming aware of an MA plan or plans to make an enrollment decision). TPMOs may be a first tier, downstream, or related entity (FDRs), as defined under § 422.2, but may also be entities that are not FDRs but provide services to an MA plan or an MA plan’s FDR.”
- CMS also added a disclaimer that TPMOs must use when marketing Medicare Advantage plans. It must state: “We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.” Any TPMO that sells multiple plans must use the disclaimer unless they sell all commercially available plans in a service area. If placing a sales call, the same information must be communicated within the first minute of that call. TPMOs must include the disclaimer in electronic communications like email and chat and prominently display it on TPMO websites. Finally, any print materials or television ads used by a TPMO must also include a disclaimer.
- CMS also requires additional oversight for plans associated with third-party marketing organizations. Among the requirements:
- When a TPMO is not an FDR, it must adhere to the requirements that apply to the Medicare Advantage plan.
- Contracts must make sure that the TPMO: (a) discloses any subcontracted marketing relationships to the Medicare Advantage provider, (b)that the TPMO records all calls with beneficiaries in their entirety, (c) that the TPMO reports any disciplinary actions or violations that apply to the Medicare Advantage plan associated with a beneficiary’s interaction, and (d) the TPMO must use the disclaimer highlighted above.
- Finally, when TPMOs conduct lead generation activities, they must tell the beneficiary that their information will be provided to a licensed agent for future contact or disclose that they are being sent to an agent to enroll in a new plan.
The key to compliant Medicare Advertising in 2023 is to place calls as opposed to written communication. Make fair statements which disclose any limitations. Strictly monitor third party marketing organizations, and record marketing calls both to ensure compliance and to closely monitor the sales force and third-party marketing organizations. Recorded calls are also critical if any enforcement action or investigation is opened by CMS or a state regulatory authority.