CMS Finalizes New Medicare Marketing Requirements

The U.S. Centers for Medicare and Medicaid Services (CMS) issued a final rule on April 5, 2023, revising the regulations governing marketing by Medicare Advantage plans (MAPs) and Medicare Part D plans (PDPs). These changes follow CMS’s October 2022 memo expressing concern regarding MAP and PDP marketing practices, and the proposed rule issued on December 14, 2022. The changes are applicable for all contract year 2024 marketing and communications beginning September 30, 2023.

In the October 2022 memo, CMS stated that it had reviewed thousands of complaints and hundreds of marketing calls and identified numerous instances where confusing, misleading, and/or inaccurate information was provided to beneficiaries. Following the release of the CMS memo, on November 3, 2022, the U.S. Senate Committee on Finance issued a report detailing its findings from an inquiry conducted into MAP marketing practices in 14 states. The report alleged that MAPs are targeting beneficiaries with false and misleading information, and noted that the number of complaints to CMS about MAP marketing more than doubled from 2020 to 2021.

The rule includes (without limitation) finalization of the following reforms to the regulations governing marketing by MAPs and PDPs:

• The following are prohibited:
  • advertisements that (1) do not mention a specific plan or (2) use the Medicare name or logo in a misleading way
  • marketing of benefits in a service area where those benefits are not available
  • the use of superlatives (e.g., words like “best” and “most”) in marketing unless the material provides documentation to support the statement and the documentation is based on data from the current or prior year
• Plans must notify enrollees annually in writing of their ability to opt out of phone calls regarding MAP and PDP business.
• Confirmed that the prohibition on door-to-door contact without an appointment still applies after collection of a business reply card or scope of appointment (SOA).
• SOA cards may not be collected at educational events.
• There must be a 48-hour window between a SOA being completed and an agent’s meeting with a beneficiary.
• A marketing event may not occur within 12 hours of an educational event at the same location.
• Sales agents may call a potential enrollee no later than 12 months following the date that the enrollee first asked for information.
• Medical benefits must be listed in a specific order at the top of a plan’s Summary of Benefits.
• Sales, marketing, and enrollment calls between third-party marketing organizations (TPMOs) and beneficiaries must be recorded.
• TPMOs must list or mention all of the MAPs or PDP sponsors that they represent on marketing materials.
• Plans must require agents to explain the effect of an enrollee’s enrollment choice on their current coverage whenever the enrollee makes an enrollment decision.
• Plans must have an oversight plan that monitors agent/broker activities and reports agent/broker noncompliance to CMS.

The breadth of reforms finalized by this rule demonstrates CMS’s focus on marketing and advertising practices to reduce fraud and abuse. Accordingly, MAP and PDP sponsors should also expect the government’s enforcement activities related to these requirements to increase during the 2024 plan year.

MAP and PDP sponsors should take the appropriate steps to implement these new requirements into their marketing practices, compliance programs, and auditing and monitoring efforts prior to issuing any marketing or communications for the 2024 contract year. If you have any questions or need assistance, please reach out to your Sidley contacts.