CMS targets predatory MA marketing practices, proposes prior auth and behavioral health changes

The Biden administration is once again cracking down on Medicare Advantage (MA) marketing tactics with new guidelines to promote healthy competition in the market and impose limits on plans' payments to brokers.

The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule Monday that outlines requirements to combat predatory MA marketing payment practices and improve access to behavioral health care as well as the inclusion of an expert in health equity on health plan utilization management committees to curb prior authorization rates.

The agency said it is concerned MA plans compensate agents and brokers with excessive compensation and bonus arrangements that circumvent existing payment rules, sometimes leading enrollees to plans that don’t best meet their healthcare needs. In a press release, CMS said this leads to consolidation of the MA market, so it are proposing new standardization to ensure agents and brokers can’t skirt payment rules in the future.

CMS would redefine “compensation” to set a clear, fixed amount of $632 that agents and brokers can be paid, eliminating variability in payments. Volume-based bonuses would be prohibited between MA plans and marketing middlemen, according to a fact sheet released by CMS.

“The people we serve are at the center of the Medicare program, and we work each day to make sure the program works for them. Agents and brokers play an important role in guiding people with Medicare to the option that is tuned in to their medical needs. Our proposals on how plans compensate agents and brokers seek to support a competitive marketplace that best serves people with Medicare,” said Meena Seshamani, M.D., Ph.D., CMS deputy administrator and director of the Center for Medicare.

The rule builds upon previous CMS policies that banned certain misleading MA television ads. In October 2022, CMS said in a memo that insurers must get ads pre-approved by federal regulators before airing.

“CMS continues to improve the Medicare Advantage and Part D prescription drug programs and maintain high-quality health care coverage choices for all Medicare enrollees,” said CMS Administrator Chiquita Brooks-LaSure. “People with Medicare deserve to have accurate and unbiased information when they make important decisions about their health coverage. Today’s proposals further our efforts to curb predatory marketing and inappropriate steering that distorts healthy competition among plans.”

Under the proposed rule, MA plans will be required to include health equity experts on utilization management committees. Those committees will conduct an annual health equity analysis of plans’ prior authorization practices to determine how it impacts underserved members with social risk factors.

“The goal of the health equity analysis is to create additional transparency and identify disproportionate impacts of UM policies and procedures on enrollees who receive the Part D low-income subsidy, are dually eligible, or have a disability,” the fact sheet said.

The rule would allow MA enrollees to more easily appeal termination of coverage decisions for non-hospital provider services. They would have equal access to Quality Improvement Organization review, and the provision requiring forfeiture of an enrollee’s right to appeal a termination of services decision when they leave the facility would be eliminated.

A new facility type would be added to CMS’ MA network adequacy requirements. This would include marriage and family therapists, mental health counselors, addiction medicine clinicians and opioid treatment providers, ideally increasing MA members’ access to substance use disorder treatment and improving behavioral health.

The Consolidated Appropriations Act of 2023 established a new benefit category for marriage and family therapists and mental health counselors. These providers would now be under one category called “outpatient behavioral health” as a facility specialty. This list of facility specialties will receive a 10% credit if MA plan’s contracted network includes one or more telehealth providers.

CMS also said it wants to ensure MA plans’ supplemental benefits provide value and don’t just attract high enrollment numbers, since 99% of all MA plans offer at least one supplemental benefit. The new rule would prompt CMS to send a personalized notification midyear to enrollees letting them know what unused benefits they have, ultimately driving utilization higher. The agency will also require special supplemental benefits for the chronically ill that are backed by evidence.

CMS is also proposing to provide more flexibility to substitute biosimilar biological products other than interchangeable biological products for their reference products to give people with Medicare more timely access to lower-cost biosimilar drugs.

“Premier applauds the Centers for Medicare & Medicaid Services (CMS) for proposing flexibility to Part D sponsors to treat formulary substitutions of non-interchangeable biosimilars as 'maintenance changes' that do not require approval from CMS,” said Soumi Saha, senior vice president of government affairs for North Carolina-based healthcare company Premier Inc., in a statement to Fierce Healthcare. “It has been known for years that biosimilars can improve patient access to medications while saving the U.S. healthcare system billions of dollars, yet anticompetitive practices by vertically-integrated payers have put their own profits ahead of lowering drug costs for patients by favoring the reference biologic and lucrative rebates. Premier has long advocated for CMS to elevate policy proposals to further encourage the adoption of biosimilars, ensure payment policies are fair and unbiased, and put the patient first.”

A 60-day comment period for the proposed rule will take place. Comments must be submitted no later than Jan. 5, 2024.