All right, so as everyone in the Medicare space should already know the Centers for Medicare & Medicaid Services (CMS) released its HUGE final Medicare Advantage and Part D Plans Rules last month. They are a must read (even if they’re a tad dull.) The new Rules go into effect on June 28, 2022—as in less than two weeks from now—so get ready. Some quick background for the uninitiated, CMS is a federal agency that is responsible for implementing laws passed by Congress related to federal healthcare programs, including the Medicare Advantage Program. The Rules CMS put out are binding and require MA organizations and Part D sponsors to monitor and audit any party that enters into a written arrangement with it to provide administrative or health-care related services. Digging in, CMS is clearly increasing its compliance oversite of Medicare related sales and marketing activities. And that is a huge deal for folks involved in lead generation and digital marketing related to Medicare products.
Indeed, CMS is directly targeting such companies—called third-party marketing organizations (“TPMOs”) in the new Rules—and requiring providers to take actions to affirmatively detect and prevent deceptive marketing and sales tactics used by TPMOS to enroll beneficiaries in MA and Part D plans. That means marketers need to up their compliance game across the board, and providers need to pay very close attention to the conduct of their lead generation partners. (Don’t worry guys, Digital Thrive is here for you.)
Zooming out, MA plans provide a myriad of benefits and while often coming with a zero-dollar monthly price tag– making MA plans easier than traditional Medicare to advertise and sell. Hence the “advantage” in its name. But the ease to sell MA plans created a crunch of new entrants into the sales game—and CMS said this increase coincided with a huge increase in consumer complaints, specifically about the marketing practices of TPMOs.
For instance, many national television ads were airing in areas where the benefits weren’t offered – but that didn’t stop some lead generators or brokers from pushing beneficiaries to enroll in other plans once they got them on the phone. Ultimately these unscrupulous marketing tactics drove rapid disenrollment since beneficiaries lost benefits they wanted as they were railroaded into new plans that didn’t fit their needs.
CMS wants these practices to stop—and it is serious about it. Back in October 2021, CMS released a “Third Party Marketing Memorandum” which reminded MA organizations that “they are responsible for first tier, downstream or related entities (FDRs) adherence to all terms and conditions of the organization’s contract with CMS, including compliance with all applicable Medicare laws and regulations, when acting on the plan’s behalf. This includes, but is not limited to, the requirements that all marketing materials be submitted to CMS prior to use, pursuant to 42 CFR § 422.2261(a), and that Medicare Advantage (MA) plans may not mislead, confuse, or provide materially inaccurate information to current or potential enrollees, pursuant to 42 CFR 422.2262.”
Translation: carriers can’t allow their downstream partners to goof off.
And the new Rules going into effect at the end of the month better defines just what it means to “goof off” in this context.
The Final Rule brings about the following critical changes:
Broadens the definition of TMPO—i.e. those that providers are responsible to oversee— to include “organizations that are compensated to perform lead generation, marketing, sales, and enrollment related functions as a part of the chain of enrollment, that is the steps taken by a beneficiary from becoming aware of a Medicare plan or plans to making an enrollment decision.” And—for the first time— TPMOs don’t just have to be FDRs. So there is no question that provider oversight responsibilities just expanded. Yikes.
Requires the use of a prominently displayed disclaimer on TPMO’s website and marketing materials when TPMOs market MA plans/Part D products: “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.” This is an easy one to comply with, but you don’t want to miss it.
All the fun downstream players in the lead generation ecosystem MUST be disclosed to the plan providers. There can be no hiding. The providers are ultimately responsible for every creative used by anyone in the chain. Plus all communications with consumers MUST be recorded.And all disciplinary actions must be reported up the chain from any TPMO back to the plan provider on a monthly basis. All of this needs to be in written agreements so it doesn’t get lost.
Plans must ensure TPMOs conducting lead generation activities will inform beneficiaries that his or her information will be provided to a licensed agent for future contact. Again, this one should be pretty easy—but don’t swing and miss at the softballs folks.
Also please don’t forget about the best practices CMS proposed previously-that should still be followed in connection with the new Rule:
Utilizing outbound phone calls to beneficiaries, as opposed to letters, to confirm enrolled beneficiaries have, in fact, enrolled in the MA plan, and understand the rules applicable under the plan;
Reviewing rapid disenrollments to identify trends associated with “bad players”—and making them pay by recouping fees bad in these settings;
Reviewing actual marketing and enrollment calls between beneficiaries and call centers/agents to ensure compliance with the broader CMS communications and marketing requirements;
Requiring FDRs to identify the origin of the enrollment lead (e.g., call in based on TV ad, response to mailing);
Recording the entire sales call in additional to all telephonic enrollments;
Requiring FDRs to disclose all contracted third-party relationships.
Obviously as General Counsel for a Medicare TPMO I’m pushing to assure plan providers can feel safe and confident working with Digital Thrive as a partner. Yet I provide this plain-language assessment so that everyone out there better understands the rules of the road. It is important, however, that no matter where you fit in this ecosystem—i.e. a provider, FDR, TPMO or upstream affiliate or partner—that you retain counsel to help you understand the nuances here.
Ultimately these standards are in place to assure that consumers are not mislead or taken advantage of. And that is a goal we should all be happy to stand behind. But we won’t succeed unless everyone is playing by the same set of rules. Which makes standards—here, and throughout the lead generation world—so critical.
Until next month.