To keep in the spirit of giving during this time of the year, CMS shared their new proposed guidelines. Aww, thanks!
A few changes set out in only 957 pages. 😲
If you are familiar with this year’s preparation for AEP, then you already know the difficulty of navigating CMS guidelines. If not, buckle up, this will be a bumpy ride!
The proposed changes are significant for Marketing and Third-Party Marketing Organizations (TPMO). I’ve reviewed the proposed changes and have summarized them below. I’ve also included the deadline for comments at the end and linked our previous CMS blogs from our one and only Queenie! You’re welcome! 😊
As a result of CMS’ investigations, a number of changes are proposed. Some of the changes are intended to provide more information to beneficiaries and all changes are intended to protect beneficiaries from confusion.
Overall Summary of the Proposed Rule:
For this rule, CMS’ primary purpose is to amend the regulations for the Medicare Advantage (Part C), Medicare Cost Plan, and Medicare Prescription Drug Benefit (Part D) programs, and Programs of All-Inclusive Care for the Elderly (PACE).
Also, this proposed rule would amend the existing regulations for Medicare Parts A, B, C, and D regarding the standard for an identified overpayment. Additionally, this rule implements certain sections of the following Federal laws related to the Parts C and D programs including: The Inflation Reduction Act (IRA) of 2022, The Consolidated Appropriations Act (CAA), 2021, The Bipartisan Budget Act (BBA) of 2018, and The Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act of 2018.
TEN Specific Changes to Marketing and TPMOs (in no specific order)
1. TPMOs to submit designed marketing directly to CMS
The current regulations require MA organizations and Part D Sponsors to submit all marketing information to CMS for approval. This requirement created chaos earlier this year simply because submitting information to CMS is limited to certain users: MA organizations and Part D Sponsors. However, the use of multiple marketing partners (TPMOs) is common and therefore, all the designed marketing had to find its way upstream to the authorized user to submit directly to CMS and to the carriers.
The proposed change would require TPMOs to submit directly to CMS any material that the TPMO develops for multiple MA organizations and Part D sponsors that meets the definition of marketing and further require that TPMOs receive prior approval, by each MA organization or Part D sponsor, of the material being submitted on behalf of each of the MA organization or Part D sponsor.
Proposed Rule: §§ 422.2261(a)(2) and 423.2261(a)(2) to read: “TPMOs must submit their materials designed on behalf of and with prior approval from the applicable MA organizations or Part D sponsors.”
2. Prohibit Misleading Use of Medicare or CMS Name and Logo and Federal Government
The guidelines already prohibit inaccurate and misleading information but this change will be specific to prohibit the misleading use of the Medicare Name, CMS logo, and products or information issued by the Federal Government excluding the Medicare Part D mark.
The proposed change includes adding a new paragraph which specifically prohibits the use of the Medicare name, CMS logo, or official products, including the Medicare card, in a misleading manner. Further, since CMS contracts with MA organizations and Part D sponsors, CMS intends to hold these organizations accountable for the actions of their first tier, downstream and related entities, per §§ 422.504(i) and 423.505(i).
Proposed Rule: § 422.2262(a)(1) (xix) and § 423.2262(a)(1)(xviii) to read: to prohibit the “use the Medicare name, CMS logo, and products or information issued by the Federal Government, including the Medicare card, in a misleading way.”
3. Goodbye to Sharing Beneficiary Contact
This rule has the shortest explanation in the proposed rules and yet may be the most dangerous change.
CMS believes that the beneficiary is only expecting to connect with the company based on the advertisement- not to have return calls made to their personal home or cell number from other companies. However, “CMS has learned that the selling and reselling of beneficiary contact information is happening …and that beneficiaries are unaware that by placing the call or clicking on the web-link they are unwittingly agreeing for their contact information to be collected and sold to other entities and providing consent for future marketing activities.” (Id. at 255)
Proposed Rule: § 422.2274(g)(4) and § 423.2274(g)(4): “Personal beneficiary data collected by a TPMO may not be distributed to other TPMOs.”
4. Unsubstantiated Superlatives like “lowest premium or largest network” are limited
Currently, the use of unsubstantiated superlatives except those in taglines and logos are prohibited. Permitting the use of superlatives without specific information explaining the basis or context is potentially misleading to beneficiaries.
CMS proposes to further restrict the use of superlatives including those used in logos and taglines by prohibiting all superlatives unless substantiating supporting data is also provided with the material. There is an additional proposed requirement that the supportive documentation and/or data be based on current data which may include reports, studies, or other documentation published either in the existing contract year or the prior contract year.
Proposed Rule: §§ 422.2262(a)(1)(ii) and 423.2262(a)(1)(ii) to prohibit the “use of superlatives, unless sources of documentation and/or data supportive of the superlative is also referenced in the material” and to provide that “such supportive documentation and/or data must reflect data, reports, studies, or other documentation that has been published in either the current contract year or prior contract year.”
5. Everyone must show ID: Clear Identification in Marketing Material
In response to lead generators’ marketing of benefits without identifying which product, plan or specific plan benefits are being advertised and seeking beneficiary contact information, CMS proposes to include the MA organization and Part D Sponsor names in marketing materials.
When a beneficiary calls, returns a flyer, or clicks on a link on a webpage, the advertising entity (which may be either an MA organization, a Part D sponsor, or a TPMO) may be able to obtain a beneficiary’s contact information, which is then used by that entity for unlimited future calls or for providing that information to other entities that then contact the beneficiary.
CMS does not believe beneficiaries realize or want their contact information to be provided to other entities just because the beneficiary wanted to get information about available plans from one internet site.
By requiring MA organization and Part D Sponsor names, both CMS and the organization would then be able to ensure that only those MA organizations and Part D Sponsors who opted into the TPMO are being advertised in that piece. If CMS determines a piece is misleading, it will then be able to identify the organizations from the advertisement, compare them to the ones that opted in and address the issue with those organizations who opted into the TPMO piece.
Proposed Rules: § 422.2263(b)(9) to prohibit “MA organizations from marketing any products or plans, benefits, or costs, unless the MA organization or marketing name(s) (as listed in HPMS of the entities offering the referenced products or plans) are identified in the marketing material”; 423.2263(b)(9) to prohibit “Part D sponsors from marketing any products or plans, benefits, or costs, unless the Part D sponsor or marketing name(s) (as listed in HPMS of the entities offering the referenced products or plans) are identified in the marketing material.”
BONUS: Visibility Requirements
For print advertisements, MA organization, Part D sponsor, or marketing names must be in 12-point font and may not be solely in the disclaimer or fine print. “Fine print” to mean printed matter in small type or in an inconspicuous manner.
For television, online, or social media-based advertisements, these names must either be displayed during the entire advertisement in the same font size as displayed benefits and phone numbers, or be read within the advertisement at the same pace as advertised benefits or phone numbers.
For radio or other advertisements that are voice-based only, these names must be read at the same speed as the phone number.
6. Limited Marketing Area
This makes sense.
Beneficiaries should only receive marketing that advertises benefits actually available to the beneficiary where the beneficiary resides (that is, in a service area that covers where the advertisements air).
Proposed Rule: §§ 422.2263(b)(8) and 423.2263(b)(8) provides that “MA organizations and Part D sponsors may not engage in marketing that advertises benefits that are not available to beneficiaries in the service area where the marketing appears unless unavoidable in a local market.”
7. Beneficiary Permission in SOA or BRC Limited to 6 months
Beneficiaries who request information are requesting information at that present time. According to CMS, “a beneficiary’s permission to allow contact by an MA organization/Part D sponsor or a TPMO is not, and should not be, open-ended.”
Since the purpose of the SOA or BRC is for beneficiaries to discuss plan products applicable for the present or following contract year, having the SOA or BRC expire after 6 months satisfies that purpose. Significantly, this would prevent agents from “using it in perpetuity and thus avoiding the statutory and regulatory prohibitions on unsolicited contact and cold calling.”
Proposed Rules: §§ 422.2264(c)(3)(iii)(A), 422.2264(c)(3)(iii)(B), 423.2264(c)(3)(iii)(A) and 423.2264(c)(3)(iii)(B) to limit the validity of the SOAs and BRCs in §§ 422.2264(c)(3)(iii)(A) and 423.2264(c)(3)(iii)(A), and the SOAs in §§ 422.2264(c)(3)(iii)(B) and 423.2264(c)(3)(iii)(B), to six months from the beneficiary’s signature date or the beneficiary’s request for more information.
8. Only Sales, Marketing and Enrollment Calls Must be Recorded
Currently, TPMOs must record all calls with beneficiaries as set out in the May 2022 final rule. The purpose of this regulation was to ensure that TPMOs were appropriately marketing to beneficiaries.
In response to trade organizations and individual agent questions submitted after the Rule, CMS has proposed to limit the type of recorded calls finding that the current requirement is too broad. “We believe this is an unnecessary burden since our goal is to obtain call recordings to ensure the marketing, sales, and enrollment activities conducted by agents, brokers and TPMOs meet the applicable regulatory requirements.”
Proposed Rule: §422.2274(g)(2)(ii) and §423.2274(g)(2)(ii): “Record all marketing, sales, enrollment calls, including calls occurring via web-based technology, in their entirety.”
9. Not One but Two Disclaimers
Earlier this year, CMS implemented a disclaimer that states, “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.”
Now, CMS is proposing to modify this disclaimer to add State Health Insurance Programs (SHIPs) as a source of information for beneficiaries. SHIPs are another resource that beneficiaries can contact to obtain unbiased information on all available health and drug plan options. Adding SHIPs to this disclaimer provides beneficiaries with important and unbiased information regarding other sources of assistance.
Additionally, CMS is proposing a second disclaimer which would require all TPMOs to list names of the MA organizations or Part D sponsors with which they contract in the applicable service area.
Proposed Rule: §§ 422.2267(e)(41) and 423.2267(e)(41): Third-party marketing organization disclaimer. This is standardized content.
The first disclaimer, which applies to TPMOs that do not sell for all MA organizations or Part D sponsors in a service area, would read, “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 which are [insert list of MA organizations or Part D sponsors]. Please contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Program to get information on all of your options.”
The second disclaimer, for those TPMOs that sell for all MA organizations or Part D sponsors in a service area, would read, “We offer the following plans in your area [insert list of MA organizations or Part D sponsors]. You can always contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Program for help with plan choices.”
10. Prohibited: Marketing Events are no longer permitted after Educational Events
Currently, CMS regulations permit marketing events to immediately follow an educational event, provided the beneficiary is made aware of the change and is given an opportunity to leave prior to the beginning of the marketing event. This may cause confusion to the beneficiary and undue pressure to stay especially if the educational event included free meals and desserts.
Proposed Rules: §§ 422.2264(c)(2)(i) and 423.2264(c)(2)(i) to read “Marketing events are prohibited from taking place within 12 (twelve) hours of an educational event, in the same location. The same location is defined as the entire building or adjacent buildings;” § 422.2264(c)(3)(i) and 423.2264(c)(3)(i) to read, “At least 48 hours prior to the personal marketing appointment beginning, the MA plan (or agent or broker, as applicable) must agree upon and record the Scope of Appointment with the beneficiary(ies).”
Bonus: Remove §§ 422.2264(c)(1)(ii) and 423.2264(c)(1)(ii) that authorizes obtaining beneficiary contact information, including Scope of Appointment forms at educational events because of the potential to pressure a beneficiary into providing their personal information.
I know this was a long read but it is much shorter than the proposed rule. If you are interested in the full version, here’s the link: *2022-26956.pdf (federalregister.gov)
CMS solicits comment on these marketing and communications proposals and whether the proposed regulatory changes will sufficiently achieve the goals outlined of protecting beneficiaries. Comments may be submitted via email to http://www.regulations.gov, or mail (regular, overnight or express).
Comments are DUE BY 5 P.M. ON FEBRUARY 13, 2023.
These proposed changes are not in effective yet. If they are adopted, they will make significant changes to the industry especially lead generators, lead sellers and overall marketing strategies. Reach out if you have any questions, Troutman Firm is at your service!
As always, we will keep an eye out on this for you and will provide some guidance next season in preparation for AEP.
Til next time, Countess!