CMS to restrict Medicare Advantage TV ads, scrutinize brokers and agents amid high complaints

Starting next year, insurers will not be able to air any television ads for Medicare Advantage (MA) plans before getting approval from federal regulators. 

The new requirement is part of a larger effort by the Centers for Medicare & Medicaid Services (CMS) to address concerns in MA marketing practices. The new effort, announced in a memo released Oct. 19, comes as a Senate panel is also investigating how MA plans reach customers. 

“We have reviewed thousands of complaints and hundreds of audio calls and have identified numerous issues with information provided to beneficiaries that is confusing, misleading and/or inaccurate,” the memo to MA plans said.

Currently, MA television ads can be accepted via the agency’s File and Use framework, where an insurer can certify the marketing materials meet agency guidelines. Any marketing material that isn’t designated part of this File and Use framework must get agency approval before distribution. 

Starting Jan. 1, 2023, CMS announced that television ads will not qualify for the File and Use framework, meaning they must get approved beforehand. CMS will review all previously submitted TV ads to confirm materials meet the agency’s requirements.

The agency has been worried that national TV ads may confuse beneficiaries about a plan’s potential options.

“CMS is particularly concerned with recent national television advertisements promoting MA plan benefits and cost savings, which may only be available in limited service areas or for limited groups of enrollees, overstate available benefits, as well as use words and imagery that may confuse beneficiaries or cause them to believe the advertisement is coming directly from the government,” the memo said. 

The agency added that it is reviewing all marketing complaints and targeting its oversight of the worst offenders. 

It will also increase “secret shopper” marketing efforts where agency officials pose as customers. CMS’ previous secret shopper efforts “discovered that some agents were not complying with current regulation and unduly pressuring beneficiaries, as well as failing to provide accurate or enough information to assist a beneficiary in making an informed enrollment decision,” the memo added.

CMS told MA plans and Part D sponsors that they are responsible for the actions of any third-party entities such as agents or brokers they contract with. Plans must immediately review any allegations raised against a broker or agent and track complaints to explore outliers “with respect to rapid disenrollments,” the memo said. 

CMS’ memo comes a few weeks after the start of Medicare open enrollment, where MA is expected to continue to surge in popularity among beneficiaries

Regulators aren’t the only ones keeping a close eye on the MA market. The Senate Finance Committee recently announced an investigation into MA marketing practices in response to a high rate of complaints. Sen. Ron Wyden, D-Oregon, the panel’s chairman, has said he wants to learn the most common source of complaints.

Insurer group AHIP has previously said it supports oversight requirements of third-party marketing organizations in the MA final rule for the 2023 coverage year. However, the group wrote in comments to the agency in August that there needs to be further clarifications on the requirements. 

Without clarifications, the rule could “expand costs and inhibit access to certain agents and brokers.”

The advocacy group Better Medicare Alliance said in a statement to Fierce Healthcare that plans are already held to high standards but wasn't opposed to more scrutiny. 

"We welcome continued transparency, particularly as it relates to third party marketing organizations’  activities," said BMA President and CEO Mary Beth Donahue in a statement. "If there are outlier entities that fail to maintain the high standard of accuracy and trust that Medicare Advantage plans and licensed agents and brokers overwhelmingly achieve, those entities should be held accountable."