June 15, 2016

No Game-Changers, but Many Game-Tweakers: The New Medicare Marketing Guidelines

On June 10, 2016, the Centers for Medicare and Medicaid Services (CMS) released updated Marketing Guidelines that dictate how Medicare Advantage and Part D products can be described and sold. While most of the 100+ pages of guidance remain the same, some noteworthy additions and changes were made. Some of the more significant changes are discussed below:

Provider and Pharmacy Directories: CMS clarifies that provider/pharmacy directories are not subject to the annual CMS marketing materials submission and review. MA Plans and Part D sponsors do, however, remain responsible for maintaining these materials and ensuring they are available upon request. In addition, when marketing formularies, for a specific plan, Part D sponsors must indicate when the document and search tool (if available) was last updated. These documents are subject to increasing oversight for completeness/accuracy by CMS; clarifying that they are not subject to marketing review increases the agency’s latitude to check directories throughout the year.

Key Plan Materials Online: The agency clarifies that MA Plans/Part D sponsors must post several key documents, including that an Annual Notice of Change/Evidence of Coverage, a provider and pharmacy directories, drug formulary and utilization management documents, and a multi-language insert on their websites by September 30 for the upcoming contract year. There are some exceptions to these additional requirements. This appears to be a requirement on which the agency is likely to assess compliance.

Provider Statements: Under the new guidelines, a contracted or employed physician or health care provider cannot provide an endorsement or testimonial in marketing materials for the MA Plan. As physicians and other providers are increasingly tied to quality measures, gain-sharing, and the health plan’s bottom line, this guidance sets an important line on how far an individual provider can go in supporting the growth of her/his health plan business partner. In addition, all PPO plans must include a CMS-authored disclaimer in its marketing materials.

Medicare Advantage Parent Organizations and Star Ratings: The new guidelines add a section regarding MA plans/Part D sponsors with multiple contracts (each of which is assigned a star rating by CMS). Going forward, MA plans/Part D sponsors with one or more contracts that do not have the same overall rating are barred from creating or distributing materials that might imply that all contracts have the same rating.

Agent/Broker Compensation: The new guidance changed aspects of the agent/broker compensation requirements. MA Plans/Part D sponsors must have their full agent/broker compensation schedule for initial and renewal enrollments in place by October 1 of each year. Midyear compensation changes by MA Plans/Part D sponsors will only be permitted as long as the modifications are within the specified submitted ranges. Renewal compensation, which must always be pro-rated, may be paid to agents/brokers under specific scenarios outlined in the updated guidance.

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