New Medicare Plan Regs Add Third-Party Marketing Rules

Medicare plan managers have completed regulations that will define many insurance agents, brokers and marketers as “third-party marketing organizations,” starting with the annual enrollment period for 2023 coverage.

The Centers for Medicare and Medicaid Services has included the new TPMO requirements in a new set of Medicare Advantage and Medicare Part D prescription drug plan rules for 2023.

“TPMOs can serve a role in helping a beneficiary find a plan that meets the beneficiary’s needs,” CMS officials say in the preamble, or official introduction, to the new final regulations.

But “additional regulatory oversight is required to protect Medicare beneficiaries from confusing and potentially misleading activities in this space,” they explains.

Officials note that they received 39,617 complaints related to Medicare plan marketing in the first 11 months of 2021, up from 15,497 in all of 2020, and that a high percentage of the complaints involved TPMO marketing.

“In addition, we have seen an increase in third-party print and television ads, which appears to be corroborated by state partners,” they say.

What It Means

The new regulations could add regulatory requirements for all Medicare marketers and sellers.

The rules could also help some longtime Medicare plan sellers, who have complained in recent years about seeing large, national marketing organizations use high-priced TV ads and call centers to compete with them.

Local agents and brokers have argued that, in some cases, the TV ads have painted an unrealistic picture about what any one Medicare Advantage plan providers.

The Regulatory Process

The new final regulations are based on draft 2023 Medicare plan regulations CMS released in January.

CMS is preparing to publish the regulations in the Federal Register — an official government rule-making publication — May 9.

The Regulations

In the new regulations, CMS defines any organization that is paid to “perform lead generation, marketing, sales and enrollment-related functions as a part of the chain of enrollment” in a Medicare Advantage plan or a Medicare Part D prescription drug plan as a TPMO.

The TPMO definition will also include individuals who perform those functions, such as independent agents and brokers.

A TPMOs marketer or seller that offers only some plans in a community will have to warn consumers about that.

A TPMO with a limited plan menu will have to use this standard disclaimer:

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.

A Medicare plan issuer will be responsible for the activities of any TPMOs it uses.

Lead-Generation TPMOs

CMS has received complaints from consumers who have had interactions with TPMOs, then receive calls from agents without understanding why the TPMOs gave their contact information to the agents.

To prevent that kind of problem, lead-generation TPMOs that provide consumer contact information to agents will have to inform beneficiaries that their contact information will be provided to licensed agents for future contacts, officials say.

The Future

Some commenters who responded to the draft regulations asked CMS to create tougher TPMO rules.

“Overall, we have laid the groundwork from which we can develop additional rules addressing potentially confusing and misleading activities in this space, while acknowledging the conscientious performers who act within scope to educate and inform beneficiaries of their health care options,” officials say.

“There is room to develop additional parameters around TPMOs as we gain a greater awareness of their impact on the Medicare insurance landscape,” they add.

(Image: CMS)