CMS NEW RULES: TPMOs Saved (for now), Updated and Required Disclaimers and Much More

Let’s discuss the CMS Update released yesterday. As some of you may be preparing for Open Enrollment, the new Rules are key.

Specifically, Third Party Marketing Organizations (TPMO) are now required to submit marketing material to CMS directly. But before we get into the new Rules, I would like to highlight that as Queenie reported, the buzz over prohibiting TPMOs from sharing beneficiary information has been delayed.  

Echoing the Czar, Way to go R.E.A.C.H! If you don’t know what is R.E.A.C.H., feel free to come up from under a rock because R.E.A.C.H. is making waves, changing and saving an industry all in its infancy. Looking forward to reaching new heights! (pun intended)  

As I shared in December, my comments are focused primarily on the Marketing changes and TPMOs in no particular order of importance.   

  1. TPMOs to submit designed marketing directly to CMS

CMS emphasizes that TPMOs must receive prior approval before submitting any material through HPMS. This rule correlates with number five below. 

This change requires 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 requires 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. 

Rules: §§ 422.2261(a)(2) and 423.2261(a)(2) states: “TPMOs must submit their materials designed on behalf of and with prior approval from the applicable MA organizations or Part D sponsors.” 

  1. Prohibit Misleading Use of Medicare or CMS Name and Logo and Federal Government

CMS noted a slight modification to permit the use of the Medicare card image, with authorization from CMS. 

Rules: § 422.2262(a)(1) (xix) and § 423.2262(a)(1)(xviii) prohibits the “use of the Medicare name, CMS logo, and products or information issued by the Federal Government, including the Medicare card, in a misleading way.” A slight modification to permit the use of the Medicare card image, with authorization from CMS. 

Also, CMS requires MA organizations and Part D sponsors to include in their contracts with first tier, downstream and related entities that any services or activities conducted by the first tier, downstream or related entity are performed in accordance with the MA organization’s or Part D sponsor’s obligations under its contract with CMS. 

  1. Still Good to Share Beneficiary Contact Thanks to R.E.A.C.H. 

“We are not addressing our proposal to prohibit TPMOs from distributing beneficiary contact information in this final rule and may address it in a future final rule.”  

  1. Unsubstantiated Superlatives like “lowest premium or largest network” are limited

Two minor modifications to the proposal by removing the published requirement and adding an additional paragraph for clarification on older data. 

Rules: §§ 422.2262(a)(1)(ii) and 423.2262(a)(1)(ii) prohibit the “use of superlatives, unless sources of documentation and/or data supportive of the superlative is also referenced in the material” and provide that “such supportive documentation and/or data must reflect data, reports, studies, or other documentation in the current year or prior year.”   

An additional paragraph to both §§ 422.2262(a)(1)(ii)(A) and 423.2262(a)(1)(ii)(A) is added to clarify the inclusion of older data (that is data that is not about, from or based on the current or prior contract year) in the documentation and data included in the communication or marketing material to support the superlative. 

CMS provides additional guidance by stating that this documentation and/or data can be referenced through footnotes explaining the basis, noting the source (with enough information for a beneficiary to locate), or providing the actual comparison done to determine the superlative. 

  1. Everyone must show ID: Clear Identification in Marketing Material

According to CMS’ explanation to some commenters, this Rule and the Rule referenced above in number 1 go hand-in-hand and should avoid any confusion to beneficiaries.  

Rules: § 422.2263(b)(9) prohibits “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) prohibits “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 – All adopted under new subsections 

423.2269(b)(9)(i) & 423.2263(b)(9)(i): 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.  

423.2269(b)(9)(ii) & 423.2263(b)(9)(ii): 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.   

423.2269(b)(9)(iii) 423.2263(b)(9)(iii): For radio or other advertisements that are voice-based only, these names must be read at the same speed as the phone number. 

  1. Limited Marketing Area

In response to a comment seeking clarification on the term “unavoidable,” CMS provided several examples of permissible exceptions and will provide additional assistance in the CMS Medicare Communication and Marketing Guidelines. 

CMS notes that this exception does not apply for national marketing but rather for marketing in local media that cover the service area(s) for the benefits. 

Rules: §§ 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.”   

  1. Beneficiary Permission in SOA or BRC Limited to 12 months

Business Reply Cards (“BRC”) are different from Scope of Appointments (“SOA”) in that the SOA must list all the products to be discussed at the appointment on the document, while many times the BRC is simply a process for obtaining contact information for a beneficiary (that is, name, phone number, address, email). CMS addressed and considered several commenters who suggested a longer term than six months.  

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) limits 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 12 months from the beneficiary’s signature date or the beneficiary’s request for more information.  

  1. Only Sales, Marketing and Enrollment Calls Must be Recorded

To further clarify this proposal, CMS adopted the proposed language that recordings are limited to sales, marketing and enrollment calls but also, that the web-based calls recordings apply only to the audio portion of those calls rather than the video conference.  

Rules: §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.” This requirement applies only to the audio portion of web-based calls.  

  1. Not One but Two Disclaimers

CMS discussed some commenters who disagreed with the length of the disclaimers and the effects on marketing material. However, CMS disagreed and reiterated its position that the beneficiary is aware of the individual’s options and understands the scope of plans represented by a TPMO.  

But CMS made a slight modification as suggested by a commenter to replace “sells” with “represents.”  

Rules: §§ 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, states: “We do not offer every plan available in your area. Currently we represent [insert number of organizations] organizations which offer [insert number of plans] products in your area. Please contact, 1-800-MEDICARE, or your local State Health Insurance Program (SHIP) 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, states: “Currently we represent [insert number of organizations] organizations which offer [insert number of plans] products in your area. You can always contact, 1-800-MEDICARE, or your local State Health Insurance Program for help with plan choices.” 

  1. Prohibited: Marketing Events are no longer permitted after Educational Events  

Rules: §§ 422.2264(c)(2)(i) and 423.2264(c)(2)(i) states: “Marketing events are prohibited from taking place within 12 (twelve) hours of an educational event, at 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) states: “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: Instead of removing §§ 422.2264(c)(1)(ii) and 423.2264(c)(1)(ii), the paragraphs are updated to read: to prohibit the collection of SOAs and prohibit agents from setting up future marketing appointments at educational events.  

Changes are effective on September 30, 2023 for all activity related to CY 2024. 

Lots to digest here as the industry prepares for Open Enrollment. As always, we will keep an eye out on this for you and will continue to provide some guidance in preparation for AEP.  

Til next time, Countess! 



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