CMS Dumps Marketing and Other Rules for Medicare Advantage Plans, Pleasing Industry

In an effort to remove what it considers burdensome and unnecessary rules, the Centers for Medicare & Medicaid Services (CMS) finalized a package of polices for Medicare Advantage (MA) plans for 2027 that it hopes will improve care and reduce red tape and confusion for beneficiaries and insurance companies.

“We are moving away from a system that incentivizes administrative box-checking and are instead laser-focused on what truly matters: the clinical outcomes and health of our beneficiaries,” Chris Klomp, director of Medicare and deputy administrator at CMS, said in a press release.

But David Lipschutz, co-director of law and policy at the Center for Medicare Advocacy, called several of the 219-page rule’s provisions “a rollback of consumer protections, which gives in to pressures from the insurance industry and those who sell their products.”

One significant example affecting doctors, Lipschutz said, was that CMS in its November proposed rule seemed ready to grant a much needed special enrollment period (SEP) for patients when their providers were terminated from plan networks outside of open enrollment windows, with no need for a determination that the network changes were “significant.” Patients could then switch to a different plan or traditional Medicare to keep seeing the same clinicians, and could also purchase a Medigap supplemental plan without underwriting.

MA plan terminations of physician and other provider contracts — due to financial or other disputes — are frustrating and potentially harmful for enrollees who suddenly find themselves scrambling to find care from appropriate new providers.

CMS acknowledged the broad interest in the new SEP but said it would not finalize that proposal and would not address numerous stakeholder comments related to it.

Not having that SEP is especially hard on doctors who want to keep their patients, Lipschutz said. “If your Medicare Advantage plan terminates you mid-year, CMS is not making it easier for patients to follow you,” he noted.

Insurance industry representatives were generally pleased with the new provisions. On the marketing rule changes, Susan Reilly, spokeswoman for Better Medicare Alliance, which promotes MA plans, said, “We’ve long called for streamlining rules while strengthening TPMO [third-party marketing organizations] oversight and enforcement, and the final rule is consistent with that.”

The changes also include a repeal of a CMS requirement that health plan marketing agents inform beneficiaries about federally funded State Health Insurance Assistance Program (SHIP) counselors who can provide “information on all your options.”

CMS had mandated that agents include that disclosure in 2023 because some agents representing TPMOs were misleading beneficiaries about all their options in order to sell their own plans and reap commissions. SHIPs, the agency said at the time, provide beneficiaries with an “important and unbiased resource for assistance.”

The SHIPs also have been an option for physicians who rarely have time or expertise to advise patients each year on which of the dozens of available plans would best suit their needs.

But in its final rule, the agency said the SHIP disclosure was no longer necessary and criticized its operation, noting that it “recognized that, while SHIPs can be a source of unbiased information about plan choices … SHIP volunteers may not always have the expertise to help beneficiaries navigate increasingly complex MA and Part D programs.”

The agency added that each SHIP “works differently and provides different training to its counselors, which can vary further at the local level. This can result in Medicare beneficiaries receiving different information based on the SHIP and SHIP counselor that is ultimately reached.”

Rather, CMS said, beneficiaries “may be more effectively served by information and entities for which CMS has direct oversight,” adding that 1-800-MEDICARE “is a better option to assist beneficiaries with healthcare choices.”

At least one SHIP director did not agree with the disclosure’s deletion. Sophie Exdell, MPH, program manager of the San Diego Health Insurance Counseling & Advocacy Program (HICAP), said 1-800-MEDICARE is not the answer. The agency does not have “the training or resources to counsel beneficiaries in much detail, especially on the local plan landscape,” she said.

For example, when enrollees in UC San Diego Health’s MA plan lost access to their primary care doctors, HICAP created fact sheets to guide them. Medicare counselors had no familiarity with the situation, and the Medicare Plan Finder was not helpful, Exdell said.

The agency also eliminated 11 metrics used to calculate MA plan star ratings, effective in 2029, and declined to implement a scheduled Biden-era measure called the “health equity index,” and three other health disparity measures designed to incentivize care for low-income and other underserved beneficiaries. The ratings determine plan bonuses and help beneficiaries compare plans.

The retired metrics also include a measure tracking whether plans make timely decisions about appeals and whether they have good care management for enrollees with special needs, a foreign language interpreter in their call center, and rates on which members choose to leave the plan. The agency gave multiple reasons for their removal. For example, for members leaving the plan, it said it is difficult to know the reason for disenrollment.

The final rule also issued a requirement that debit cards with cash, often used by insurance companies to market their plans, must be electronically linked to plan-covered services and products to stop beneficiaries from using them for non-covered items. The rule also includes lengthy lists of covered products (i.e., antacids or fiber supplements) versus not-covered products (i.e., bad breath remedies or shampoo).

CMS also removed a 2023 prohibition against MA plans using superlatives in marketing materials saying it is unnecessary because plans are already prohibited from making “misleading, confusing, or materially inaccurate” claims. In the spirit of encouraging competition, plans will now be able to say they are the “highest rated,” “largest provider network,” or “highest rated plan,” as long as they can back it up — for example, giving the relevant period for the claim.

The agency also is relaxing or doing away with several restrictions on how and when brokers and agents can interact with beneficiaries, rules intended to reduce aggressive sales pressure on unwitting beneficiaries. For example, it is deleting a Biden-era requirement imposing a 12-hour gap between a health plan education session and a health plan marketing session in the same location, so that beneficiaries who came to learn about Medicare overall would not suddenly be pressured to enroll.

CMS reasoned that beneficiaries have backup from caregivers accompanying them, “a built-in layer” of protection from such pressure.

Lipschutz was skeptical. “What about people who don’t have people with them? That makes them more of a target,” he said.