Comment on Medicare Advantage and Prescription Drug Benefit Programs: Final Marketing Provisions (Parts I & II)
Posted Apr 27 2010 12:00am
By Michael Rabasca
These rules represent modifications and additions to initial marketing regulations implementing The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (”MMA”), which “established the Medicare Prescription Drug Benefit Program (Part D) and made revisions to  provisions” of the Medicare Advantage Program (Part C). ( Federal Register, Volume 73, No. 182 at p. 54208 ). The Centers for Medicare and Medicaid Services’ (”CMS”) enacted these final regulations pursuant to §§ 1851(h) and 1860D-1(b)(1)(B)(vi) of the Social Security Act, which empower the CMS to “implement standards consistent with ‘fair marketing.’” ( Federal Register, Volume 73, No. 182 at p. 54210 ).
The most significant aspect of these final regulations is the new restrictions they place on Part C and Part D plans’ marketing activities. Specifically, these rules prohibit the following:
(1) unsolicited direct contact with potential enrollees, including telemarketing (42 C.F.R. §§ 422.2268(d) , 423.2268(d) );
(2) selling non-healthcare related products during a plan marketing event or presentation (42 C.F.R. §§ 422.2268(f) , 423.2268(f) );
(3) conducting marketing presentations or distributing and/or collecting enrollment applications “in provider offices or other areas where healthcare is delivered to individuals, except . . . where such activities are conducted in common areas in healthcare settings” (42 C.F.R. §§ 422.2268(k) , 423.2268(k) );
(4) conducting marketing presentations or distributing and/or collecting enrollment applications at “educational events” (42 C.F.R. §§ 422.2268(l) , 423.2268(l)); and
These regulations also implement new rules regarding CMS’s procedure for reviewing Part C and Part D plan marketing materials. Generally, Part C and Part D plans must submit all marketing materials to CMS at least forty-five days before distribution. (42 C.F.R. §§ 422.2262(a), 423.2262(a) ). However, the regulations provide for an abbreviated “file and use” procedure, under which CMS deems certain materials approved five days after submission. ( Federal Register, Volume 73, No. 182 at p. 5410 ). Previously, Part C plans could use the “file and use” procedure to obtain approval of marketing materials if: 1) the plan had a record of continued exemplary performance in CMS reviews of its marketing materials; or 2) the plan certified that the marketing materials in question did not contain “substantive content” or, alternatively, only used “model language already reviewed and approved by CMS.” ( Federal Register, Volume 73, No. 182 at p. 54210 ). Part D plans, on the other hand, could only obtain “file and use” approval through plan certification. ( Federal Register, Volume 73, No. 182 at p. 54210 ). However, these final regulations “eliminate file and use status based on an organization’s track record” for Part C plans, and implement “a uniform policy of applying the file an use policy to marketing materials that either use model language without substantive modification, or materials identified by CMS as not containing substantive content warranting CMS review” for both Part C and Part D plans. ( Federal Register, Volume 73, No. 182 at p. 54210-54211 ).
Additionally, these final regulations implement licensure requirements for plan marketing representatives. Specifically, the rules require Part C and Part D plans to exclusively use State licensed marketing representatives to conduct direct marketing activities targeted at potential plan enrollees. (42 C.F.R. §§ 422.2272(c) , 423.2272(c) ). Plans must also notify states that they are using licensed representatives in a manner that is “consistent with the appointment process provided for under State law.” (42 C.F.R. §§ 422.2272(c) , 423.2272(c) ).
Finally, these rules mandate that Part C and Part D plans make certain disclosures to plan participants. Under these final regualtions, plans must now disclose the information specified in §§ 422.111(b) and 423.128(b) to all plan participants both “[a]t the time of enrollment and at least annually thereafter, 15 days before the annual coordinated election period.” (42 C.F.R. §§ 422.111(a)(3) , 423.128(a)(3) ).
The best argument in support of these final regulations is that they provide necessary consumer protections. Generally, individuals age sixty-five and older, and people with disabilities are eligible for Medicare programs. This group of potential enrollees is particularly vulnerable to dubious marketing tactics. Allowing insurers to market their Part C and Part D plans unchecked could be harmful potential participants. Indeed, permitting plans to distribute information and solicit enrollment applications at any place and in any manner they chose has the potential to confuse potential enrollees and, in some cases, could result in plans coercing individuals into participating. Thus, a free market philosophy as to plan marketing practices is inappropriate in the Part C and Part D setting, and strict regulation is required.