Disclaimer: Executive FMO and its partners, affiliates, and associates do not provide legal advice. The information in this post is for educational and informational purposes only. Read our full disclaimer policy here.
Many agents and agencies were surprised by the significant changes in the recent CMS final ruling CMS-4201-F that targeted Medicare Advantage marketing and sales communications. However, these changes are in part due to significant issues and attempts to address them by federal and state agencies.
A United States Senate committee report found a 155% increase (from 2020 to 2021) in complaints about false and misleading advertising Medicare Advantage Plans. The Ohio Department of Insurance noted in their official response to the same committee that, “As insurance companies and agents are bound by state insurance laws (as well as the Medicare Marketing Guidelines), it appears they may be using TPMOs to do what they cannot. A majority of TPMOs do not hold insurance licenses due to the fact that lead generation falls outside the definition of solicitation under the National Association of Insurance Commissioners (NAIC) Producer Licensing Model Act.”
While these changes are drastic and their full impact still unknown, there is a lot of incomplete, misleading or incorrect information surrounding the impact of these changes. In this article, we'll provide an outline of the CMS final ruling and its impact on Medicare sales.
The full final ruling document, which comes in at 724 pages, is available on the Federal Register. Quotes in this article (unless otherwise cited) are from this source document.
When reading this full document, it is helpful to understand the structure. They first review public comments, respond to those comments and then note their ruling. It can be easy to misread their responses to the public comments as part of their ruling but these are separate!
Now, let's dive into key components of this ruling...
When is the Ruling Effective?
This final ruling was released on April 6, 2023 with regulations effective June 5, 2023 unless otherwise specified in the ruling. The marketing and communications regulations affect plans for contract year 2024 but are effective September 30, 2023. This means that these specific regulations will impact you for AEP 2023!
Medicare Advantage and Part D Marketing changes
CMS is making several changes to Medicare Advantage and Part D marketing, a brief summary:
"notifying enrollees annually, in writing, of the ability to opt out of plan business contacts from their plan;
requiring agents to explain the effect of an enrollee’s enrollment choice on their current coverage;
clarifying that the contact is unsolicited unless an appointment at the beneficiary’s home was previously scheduled;
prohibiting marketing of benefits in a service area where those benefits are not available, unless unavoidable due to use of local or regional media;
prohibiting the marketing of savings available based on a comparison of typical expenses borne by uninsured individuals;
requiring TPMOs to list or mention all of the MA organization or Part D sponsors that they represent in marketing materials;
requiring plans and sponsors to have an oversight plan that monitors agent/broker activities and reports noncompliance to CMS;
adding SHIPs to the TPMO disclaimer;
adding the number of organizations and products a TPMO represents to the TPMO disclaimer;
placing limits around the use of the Medicare name, logo, and Medicare card;
prohibiting the use of superlatives unless the material provides documentation to support the statement; prohibiting the collection of SOA cards at educational events;
prohibiting a marketing event to follow an educational event with 12 hours at the same location;
clarifying the requirement to record calls between TPMOs and beneficiaries includes virtual connections such as Zoom and Facetime;
limiting the time that a sales agent can call a potential enrollee to no more than 12 months following the date that the enrollee first asked for information; and requiring 48 hours between a Scope of Appointment and an agent meeting with a beneficiary, with exceptions for beneficiary initiated walk-ins and the end of a valid enrollment period.”
The 48-Hour Scope of Appointment
Before we review the final ruling regarding the scope of appointment changes, it is important to review CMS' historical position on these changes:
“… [CMS] did not propose to include “when practicable” in the proposed regulation because we believe the phrase “when practicable” nullifies the purpose of the 48-hour timeframe, given the many reasons that might be cited for why waiting the full 48 hours is not “practicable,” such as the beneficiary living an hour away, the beneficiary wanting to discuss the products immediately following the signing of the SOA, the beneficiary may believe that they are being pressured by the agent to discuss the product immediately…”
“The reasons for why a meeting must occur within the 48-hour timeframe are numerous and subjective, meaning what is practicable for one person may not be practicable for another, thus we are concerned about our ability to enforce the regulation if we include “when practicable” in requiring advance agreement at least 48 hours before the meeting.” (emphasis added, pg. 406)
The 48-hour scope of appointment changes as outlined in the final ruling are:
“…we are revising §§ 422.2264(c)(3)(i) and 423.2264(c)(3)(i), including the addition of new paragraphs (c)(3)(i)(A) and (B), to require that a plan (or agent or broker, as applicable) agrees upon and records a Scope of Appointment with a beneficiary at least 48 hours prior to a personal marketing appointment or meeting, except in two situations:
(A) When a beneficiary requests an appointment within four days of the end of a valid election period, including the AEP, OEP, SEP, ICEP or the month, based on eligibility; and
(B) When a beneficiary initiates an in-person meeting.”
Now let's review these two exceptions in more detail...
Exception A: End of Enrollment Period
The final ruling allows for a waiver of this requirement during the last 4 days of a valid election period; specifically it states:
“When a beneficiary requests an appointment within four days of the end of a valid election period, including the AEP, OEP, SEP, ICEP or the month, based on eligibility…”
Examples:
AEP ends on December 7th. If an OSA is completed on or after December 3rd, you can conduct the marketing appointment during this period between December 3rd and December 7th.
If an election period ends on the 31st of the month, the SOA must be completed no earlier than the 27th of the month.
Exception B: Beneficiary-Initiated In-Person Meeting
The final ruling's second exception is for beneficiary-initiated in-person meetings; specifically the ruling states:
“Beneficiaries who walk into an agent’s office, a kiosk, a plan’s office or any other walk in will not be subject to the 48-hour rule. This exception will assist beneficiaries who have transportation issues and those that have traveled long distances to see an agent. Because this exception is tied to an unscheduled in-person meeting initiated by a beneficiary, we are finalizing an additional change to use the phrase “personal marketing appointment or meeting” in paragraph (c)(3)(i) of §§ 422.2264 and 423.2264.”
Prohibition on the Distribution of SOAs and Business Reply Cards (BRCs) at Educational Events
While much of the focus and conversation regarding these regulations has been on the SOA and its impact to call centers and telesales agents, significant changes were made impact field agents.
The ruling stated:
“…we are redesignating current paragraph (c)(1)(ii)(E) as paragraph (c)(1)(ii)(D) and revising it to permit organizations (and their agents) to make available and receive beneficiary contact information, including Business Reply Cards, but not including Scope of Appointment forms. The permission for using BRCs at educational events is similar to how CMS allows plan materials to be located in common areas of a provider’s office and we intend to interpret and apply the new regulation that way.”
This update is to refine the wording of the regulation to match the original intent of functioning similar to the provisions concerning marketing in a provider's office.
Limitation on Scope of Appointment (SOA) and Business Reply Card (BRC) Validity Timeframe
Current regulations do not specify a timeframe after which a Scope of Appointment is invalid or expired. CMS noted several examples of when a beneficiary would "reasonably expect" to be contacted about plan options and details.
Their original proposal was a 6-month timeframe but this was amended in the final ruling to 12-months.
Prohibition of Sales Events Directly Following Educational Events
In their ruling, CMS noted significant increases in beneficiary complaints related to unsolicited contact.
This change amended §§ 422.2264(c)(1)(ii) and 423.2264(c)(1)(ii) to "prohibit the collection of SOAs and prohibit agents from setting up future marketing appointments at educational events"
CMS is allowing organizations and agents to receive Business Replay Cards (BRCs) at educational events but prohibits the collection of Scope of Appointment (SOA) forms.
Conclusion
These changes are significant for the industry but the writing is on the wall - more changes are coming focusing on the beneficiary experience. Legal interpretations and assessments are ongoing about how these regulations will impact telesales and call centers, particularly related to the scope of appointment requirements. These assessments are ongoing.
The writing is on the wall. The Medicare industry is changing - are you prepared? Is your agency equipped with the information, tools and partnerships to rapidly pivot in a dynamic environment? If you're looking to scale your business or learn more about our services, please contact us at (727) 580-3513 or contact@executivefmo.com.
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