CMS confirms it has no plans to delay implementation of the 2023 Medicare Advantage and Part D final rule that cracks down on aggressive MA marketing tactics, despite calls to do so from health insurance agents and brokers who object to being included in the definition of a third-party marketing organization (TPMO).
As TPMOs, the brokers and insurance agents would be required to record - and retain – their enrollment calls if the proposed rule is finalized as written. The National Association of Heath Underwriters (NAHU) have repeatedly asked CMS to either delay the rule or to carve agents from the definition of a TPMO. From a public policy perspective, it makes no sense to discourage legitimate agents from participating in Medicare Advantage by sweeping them into an effort to curb bad actors, says NAHU Executive Director Janet Trautwein.
NAHU has warned that if CMS doesn’t delay or revise the rule, fewer agents and brokers would participate in Medicare’s forthcoming Annual Enrollment Period(AEP), which the group says would only worsen marketing problems.
Still CMS recently told NAHU that it would not make the changes to the rule that the lobby requested, Trautwein says. A CMS spokesperson also told IHP that “CMS does not plan to delay implementation of the CY 2023 Medicare Advantage and Part D Final Rule (CMS-4192-F).”
At issue are the allegedly aggressive marketing tactics used by TPMOs who make unsolicited sales calls to seniors to push Medicare Advantage plans. Trautwein explains that in contrast to agents and brokers who take time to discuss which plan is best for a Medicare beneficiary based on lifestyle, networks and formularies, TPMOs will often push products that might not be appropriate. The marketers also allegedly mislead consumers by telling them they’re calling from Medicare – or a well-known insurer – or use other tactics to lure seniors to enroll in coverage regardless of whether it’s a good fit.
The proliferation of those calls is a huge problem for licensed, certified agents and brokers, Trautwein recently told a panel of health insurance commissioners who have been looking into improper marketing of health plans. NAHU members tell their clients to ask marketers for their license numbers, but the challenge has become almost insurmountable as many seniors fail to understand that the calls are not legitimate, she says.
CMS stepped up oversight of third-party marketing organizations in its proposed 2023 MA and Part D rule, noting that a significant amount of the 40,000 complaints received in 2021 were about TPMOs. As part of the rule, which was finalized in April, the agency tweaked the definition of a TPMO to include agents and brokers, meaning that NAHU members will also be required to adhere to the new requirements, including the proposed mandate to record all enrollment calls with clients.
NAHU says the requirements will be burdensome to some agents and brokers. Many NAHU members are small, one-person shops and cannot afford the HIPAA-compliant recording equipment needed to record and retain calls, she says. Some agents and brokers might choose not to participate in open enrollment due to the new requirements.
NAHU raised its concerns in comments on the proposed rule, in a separate letter to CMS in July and again in its response to CMS’ request for information on improving MA.
AHIP also talked about the rule’s potential impact on brokers in its response to the RFI. “While we appreciate CMS’ goals in protecting against confusing and potentially misleading activities, we have heard questions about the scope of the TPMO requirements and concerns that without further clarifications or modifications, those rules could expand costs and inhibit access to certain agents and brokers,” AHIP says. “We ask CMS to engage with stakeholders to discuss and address concerns related to the TPMO requirements and ensure beneficiaries are protected from inappropriate marketing activities.”
Other stakeholders asked CMS to strengthen oversight over aggressive marketers. Trautwein says NAHU and CMS have had several discussions about the brokers’ worries, but the agency has refused to bend. In addition to declining the delay and the carve out, the agency said it would not offer enforcement relief to parties that attempt to follow the rule in good faith, Trautwein says.
NAHU had asked for guidance on several outstanding questions, including what a broker should do if a client does not want to be recorded. CMS says a broker or agent must terminate the call in those situations, according to Trautwein.
Another source tracking the issue also says some agents and brokers might not participate in MA due to the new rules, but suggests those who bow out might not sell many plans in the first place. The source also says there are reasonably priced options for the phone equipment needed to record and retain calls. Trautwein also says that some marketing organizations are offering recording solutions to their member agents and brokers, but not all will have access. Brokers and agents also can ask clients to enroll in-person so the requirement would not apply.
She declined to speculate on how many agents and brokers might bow out of the AEP because of the rule, but she says NAHU will survey members once the enrollment period is over to get a better sense of how many agents/brokers opted out. She says NAHU is still lobbying to get the rule delayed or agents carved out, and adds the group has sent thousands of messages to Capitol Hill about its concerns, but so far there’s been no legislative action.
Trautwein also brought her concerns about the proliferation of aggressive MA marketing, as well as what she views as the problems with CMS’ rule, to the National Association of Insurance Commissioners’ summer meeting in August. During a session of the NAIC’s recently established Improper Marketing Working Group, which was created to address the growing amount of misleading marketing in the individual market, Trautwein explained how agents and brokers selling MA plans have been overwhelmed by the marketing calls. She also raised concerns that CMS’ solution could drive legitimate players out of MA.
State insurance commissioners do not regulate MA marketing, but they are well aware of the problems since they often hear about it from residents or other enrollment assisters. Congress gave authority over MA marketing to CMS as part of the Medicare Modernization Act. But in May, NAIC asked key lawmakers to consider returning jurisdiction to the states, which it says are better equipped to handle the oversight.
Meanwhile, Senate Finance Chair Ron Wyden (D-OR) in mid-August asked commissioners from 15 states to send information on annual changes in MA marketing complaints from 2019 through 2022, and examples of allegedly false or misleading marketing materials. Wyden asked the states if the marketers are targeting any particular populations like dual-eligible, Black or lower-income beneficiaries.
Responses were due on Friday (Sept. 16), but it’s unclear if they have been received.– Amy Lotven (firstname.lastname@example.org)
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