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CMS Proposes Rule to Curb Medicare ‘Predatory Marketing, Inappropriate Steering’

Insurance Forums Staff

On Nov. 6, the Biden-Harris Administration proposed what it called “important steps to strengthen Medicare Advantage and the Medicare Prescription Drug Benefit Program (Part D)” that would mean big cuts in Medicare plan broker administrative support services payments for 2025.

According to a press release, the Centers for Medicare & Medicaid Services’ (CMS’) proposed rule “will help people with Medicare select and enroll in coverage options that best meet their health care needs by preventing plans from engaging in anti-competitive steering of prospective enrollees based on excessive compensation to agents and brokers, rather than the enrollee’s best interests.”

The proposed guardrails, the CMS release says, would protect people with Medicare and promote a competitive marketplace in Medicare Advantage, consistent with the goals of President Biden’s historic Executive Order on Promoting Competition in the American Economy.

CMS said the proposed rule would also improve access to behavioral health care by adding a new facility type that includes several behavioral health provider types to Medicare Advantage network adequacy requirements. CMS is also proposing policies to increase the utilization and appropriateness of supplemental benefits to ensure taxpayer dollars actually provide meaningful benefits to enrollees.

Additionally, the proposed rule would improve transparency on the effects of prior authorization on underserved communities and proposes more flexibility for Part D plans to more quickly substitute lower cost biosimilar biological products for their reference products.

“The Biden-Harris Administration remains committed to making health care more affordable and accessible for all Americans. By ensuring Medicare recipients have the information they need to make critical decisions about their health care coverage, we are doing just that,” said U.S. Department of Health and Human Services Secretary Xavier Becerra. “Promoting competition in the marketplace helps to lower costs and protect access to care while making the whole process more transparent and accountable.”

“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.”

CMS has previously taken unprecedented steps to address predatory marketing of Medicare Advantage plans, such as banning misleading TV ads. Many people on Medicare rely on agents and brokers to help navigate Medicare choices. CMS is concerned that some Medicare Advantage plans are compensating agents and brokers in a way that may circumvent existing payment rules, inappropriately steer individuals to enroll in plans that do not best meet their health care needs, and lead to further consolidation in the Medicare Advantage market.

To further protect people with Medicare through stronger marketing policies and to promote a competitive marketplace in Medicare Advantage, CMS is proposing added guardrails to plan compensation for agents and brokers, including standardization. These proposals, CMS says, are consistent with the statutory requirement that it develop guidelines to ensure that the use of compensation creates incentives for agents and brokers to enroll individuals in the Medicare Advantage plan that is intended to best meet their health care needs.

If the proposed rule were to become law, John Greene, senior vice president of government affairs at the National Association of Benefits and Business Professionals (NABIP), told ThinkAdvisor issuers of Medicare Advantage plans and Medicare Part D prescription drug plans would have to scramble to build their own broker support programs, and the cost of replacing the current broker compliance systems would lead to big increases in 2025 Medicare plan premiums.

There will be a 60-day comment period for the notice of proposed rulemaking, and comments must be submitted at one of the addresses provided in the Federal Register no later than January 5, 2024. The proposed rule can be accessed at the Federal Register at https://www.federalregister.gov/public-inspection/2023-24118/medicare-program-contract-year-2025-policy-and-technical-changes-to-the-medicare-advantage-program.

View a fact sheet on the proposed rule at cms.gov/newsroom.




3 thoughts on “CMS Proposes Rule to Curb Medicare ‘Predatory Marketing, Inappropriate Steering’”

  1. It is probably heresy to admit that this is most likely true. When the high MGA/SGA/FMO levels are individually selling MA plans , why wouldn’t they consciously (or unconsciously) offer the MA carrier with the highest comp? I’m not implying that everyone at that level does this, but it could be enough to create a conflict of interest. If this goes through, what would happen to the extra overrides that would have gone to the higher levels? Would it be sucked up by the MA carrier or clawed back from the MA comp money given by Medicare? Could it be the beginning of the demise of the FMO hierarchies?

  2. This is BS because once again the Brokers who do everything under the sun to protect their clients from the predatory agents and agencies gets umbrella in a policy that affects their right to earn a living in a industry they have been apart of for years.
    There are so many people that rely on us during and after the enrollment period. In my state the insurance commission does a good job of making sure the trash stays in the dumpster. We make the same amount regardless of the company, and the only difference is the product.
    Blanket politics don’t solve the problem. If the Adds are misleading go after the add maker, if a Agent is acting inapropietly go after the Agent, not all the Agents. This bill is hurt a lot of Medicare folks and Insuramce producers.

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