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Life Health > Health Insurance > Medicare Planning

Medicare Advantage Managers Propose 2024 Ban on Lead Sales

By Allison Bell

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What You Need to Know

  • The current draft would not allow any sales of Medicare Advantage or Medicare drug plan prospect leads.
  • Insurers might have to listen in on some agent calls with consumers and set up mystery shopper programs.
  • Users would have to be able to search a plan provider directory using any required type of data, such as a telephone number or address.

The Centers for Medicare and Medicaid Services could ban the use of independent lead-generation services in the Medicare Advantage plan and Medicare Part D prescription drug plan markets in 2024.

CMS could also require the plan issuers to set up agent call monitoring and mystery shopper programs; require both issuers and “third-party marketing organizations,” or TPMOs, to submit marketing materials for CMS review; and require agents to review topics such as a customer’s need for specialist care and wheelchairs during sales calls.

CMS has put those proposals in a draft version of a “parameters” document it will use to set Medicare plan program rules for 2024. The draft is on track to appear in the Federal Register, an official government regulatory publication, on Dec. 27.

Comments are due on the proposals by Feb. 13, 2023.

What It Means

If you sell Medicare plans, you might have to change the way you get leads and handle sales calls in 2024.

If you are a retirement planner outside the Medicare plan market, you might find that clients are more likely to get extensive advice when they sign up for Medicare coverage, but you also might find that, because of the effects of the new requirements on the supply of Medicare agents, some clients will have a difficult time connecting with agents.

The Background

Consumers, consumer advocacy groups, traditional retail insurance agents and members of Congress have been complaining for the past few years about aggressive Medicare plan ads on television and about plan marketing websites that look, in some cases, as if they are official Medicare plan enrollment websites.

CMS regulates the sales of Medicare Advantage plans and Medicare drug plans, but not Medicare supplement insurance policies.

The agency previously defined a class of Medicare TPMOs; required TPMOs to add disclaimers about the limitations of their plan menus; and required TPMOs to record calls with clients and prospects.

Agent & Broker Sales Leads

Today, national and regional companies often use television ads and Medicare information websites to develop leads for sales agents and brokers.

CMS officials say in the preamble, or official introduction, to the proposed regulations that consumers often think that they are requesting information from one organization and do not understand that the organization could sell the contact information to other parties.

Lead-generation firms might mislead consumers by putting notices explaining the nature of the sites in fine print, or they might put too much pressure on consumers by requiring consumers to agree to let their contact information be resold before they can get access to Medicare plan information, officials say.

“In these situations, a beneficiary initiates contact with one organization and then ends up receiving calls from multiple other unrelated entities,” officials report. “This practice goes beyond the scope of what we consider permissible.”

CMS has proposed adding a rule stating that, “Personal beneficiary data collected by a TPMO may not be distributed to other TPMOs.”

Agent Calls & ‘Mystery Shoppers’

CMS officials say they listened to hundreds of Medicare plan sales call recordings and believe that agents provided the information needed only about 20% of the time.

Many sales calls are too short, focus solely on consumers’ need for primary care and specific prescription drugs, and fail to cover the need for wheelchairs, oxygen systems and other durable medical equipment, officials say.

CMS is calling for insurers to address the problems by creating agent and broker compliance review programs that include monitoring of some agent calls and “mystery shopper” programs, or programs that have investigators call in and pretend to be consumers.

CMS also wants to require agents and brokers to review specified issues with consumers, including any drug or durable equipment needs, before recommending plans.

Agents would have to explain the effects of a customer’s enrollment decision on current coverage whenever the customer makes an enrollment decision.

But the agency would narrow the scope of call recording requirements: Agents would have to record only calls that seem likely to lead to plan sales, not other types of calls, such as appointment-setting calls.

Other Plan Marketing Rule Proposals

The list of proposed marketing rule changes for 2024 also includes requirements that:

  • Plans and TPMOs file marketing materials with CMS.
  • Plans and TPMOs make provider directories searchable by any required information element, such as telephone number or address, not just by name and location.
  • A plan issuer list the medical benefits offered in a specified order, so that agents and consumers find plan benefits easier to compare.
  • A plan or TPMO avoid using superlatives, such as “best” in marketing materials, unless the plan or TPMO shows in the marketing materials that data in a credible, recently published document supports the use of the superlatives.
  • A TPMO list state Senior Health Insurance Assistance Programs, in addition to the CMS Medicare.gov website and the 1-800-MEDICARE telephone hotline, as possible sources of information about Medicare plans.

(Image: Shutterstock)

Allison Bell

Think_Allison

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