CMS Cracks Down on Medicare Advantage Marketing, Prior Auth Practices

CMS finalized a rule Wednesday that will limit the ability of Medicare Advantage (MA) plans to deny or delay care through prior authorization processes and will impose tight restrictions on how such plans can be marketed to limit "misleading, inaccurate, and/or confusing" claims.

The 724-page rule, which aims to strengthen beneficiary protections, also sets forth requirements that MA plan provider directories include each clinician's cultural and linguistic capabilities and expects those plans to develop digital health education programs for enrollees with low digital health literacy to help them access telehealth services.

MA plans must also include distance and minimum number requirements for two provider categories -- clinical psychologists and licensed clinical social workers -- in order for their provider networks to be deemed adequate.

The new provisions take effect June 5 and will apply to the 2024 coverage year, except for the new marketing regulations, which will take effect Sept. 30, prior to the open enrollment period when TV ads and other media attempt to attract beneficiaries.

"This final rule will strengthen Medicare Advantage and hold health insurance companies to higher standards for America's seniors and people with disabilities by cracking down on misleading marketing schemes by Medicare Advantage plans (also called Part C), Part D plans and their downstream entities," CMS said in a press release.

The rule also will remove "barriers to care created by complex coverage criteria and utilization management," and will "expand access to behavioral health care" for MA enrollees, the agency said.

Prior Authorization

On utilization management and prior authorization practices -- which a 2022 Office of Inspector General report recommended CMS work to improve -- the agency said MA plans must:

• Cover the same services that Medicare covers for beneficiaries with traditional Medicare, including abiding by local and national coverage decisions.
• Maintain approval of a service "for as long as medically necessary to avoid disruptions."
• Use prior authorization policies "only to confirm the presence of diagnoses or other medical criteria and/or ensure that an item or service is medically necessary based on standards specified in this rule."
• Provide a minimum 90-day transition period while an enrollee who is switching to a different plan is undergoing an active course of treatment.
• Create utilization management committees to review prior authorization policies annually to make sure they are consistent with Medicare policies.

Limiting Sales Schemes

On MA plan marketing, the agency issued more than a dozen new requirements so that beneficiaries are not misled into signing up for a plan that doesn't meet their needs or whose rules they don't understand.

For example, the new rules prohibit plans and the entities or agents that sell them from:

• Advertising benefits to beneficiaries in a service area where those benefits are unavailable.
• Using superlatives like "best" or "most" in sales pitches unless the marketing material includes documentation to support the statement based on data from the current or prior year.
• Using Medicare images, logos, or replications of a Medicare card in marketing materials or ads because of concerns that "an increasing number of beneficiaries are being misled into believing the entity they are contacting is Medicare or the Federal Government."
• Touting a plan's potential savings based on a comparison with typical expenses that would be borne by an uninsured or a dually eligible beneficiary, which that individual would not be required to pay.
• Holding a marketing event from occurring within 12 hours of a Medicare educational event at the same location.

Additionally, MA and Part D plans or third-party marketing organizations that sell them must:

• List all of the MA plans or Part D sponsors that they represent in their marketing materials.
• Explain the effect of an enrollee's choice on their current coverage.
• List medical benefits in a specific order at the top of a plan's summary benefits to simplify plan comparisons.
• Include a disclaimer that the beneficiary may want to consult with the federally-funded SHIP (State Health Insurance Assistance Program) agencies, a national network of trained objective counselors, to obtain extra help. SHIP programs in some states are called HICAPs, Health Insurance Counseling and Advocacy Program.

The new rule requires MA or Part D plans to have an oversight plan to monitor agent/broker activity and report non-compliance to CMS.

Additional Provisions

Additionally, CMS is adding seven populations that MA organizations must serve in a culturally competent manner.

The new groups are those with limited English proficiency or reading skills; considered ethnic, cultural, racial, or religious minorities; living with disabilities; who identify as lesbian, gay, bisexual, or other diverse sexual orientations; who identify as transgender, nonbinary, and other diverse gender identities, or people who were born intersex; who live in rural areas and other high levels of deprivation and who are otherwise adversely affected by persistent poverty or inequality.

The agency is also including in the final rule an Inflation Reduction Act provision that will lower drug costs for about 300,000 beneficiaries with incomes up to 150% of the federal poverty level who meet other eligibility criteria starting Jan. 1. These beneficiaries may now receive partial subsidies, but the "Extra Help" subsidy will allow them full subsidies, resulting in no deductibles and no premiums and lower co-payments for certain medications under Part D.

Initial industry response was favorable, especially on the new prior authorization requirements.

The American Hospital Association's senior vice president of public policy analysis and development, Ashley Thompson, said in a statement, "Hospitals and health systems have raised the alarm that beneficiaries enrolled in some Medicare Advantage plans are routinely experiencing inappropriate delays and denials for coverage of medically necessary care. This rule will go a long way in protecting patients and ensuring timely access to care, as well as reducing inappropriate administrative burden on an already strained health care workforce."

Anders Gilberg, senior vice president of the Medical Group Management Association (MGMA), added in a statement that the new MA utilization committees will provide "greater consistency across MA and Traditional Medicare's coverage decisions and guidelines. This rule is a step in the right direction to adequately address prior authorization reform."

In its December proposed rule, the agency suggested it wanted to prohibit third-party marketing organizations that obtain a beneficiary's contact information from selling this information to other companies, which the agency said it had learned was a significant problem.

"When a beneficiary calls a 1-800 number from a direct mail flyer, a television advertisement, or an internet advertisement, the beneficiary most likely believes they are only calling -- and requesting contact with -- the entity that answers the call," CMS said in its proposed rule. Little does the beneficiary realize that "the selling and reselling of beneficiary contact information is happening ... and that beneficiaries are unaware that by placing the call or clicking on the weblink they are unwittingly agreeing for their contact information to be collected and sold to other entities..."

In its final rule, CMS said it was declining to proceed with prohibiting those marketing companies from distributing beneficiary contact information, but "may address it in a future rule."

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