New Medicare regulations add third-party marketing organization rules

What do you want to know

  • TPMOs that only offer certain plans in a community will need to notify consumers.
  • The standard disclaimer will include the Medicare.gov URL and a Medicare toll-free phone number.
  • Lead generation TPMOs will need to notify consumers when consumer contact information will be sent to authorized agents.

Health insurance plan managers have developed regulations that will define many insurance agents, brokers and marketers as “third-party marketing organizations,” beginning with the annual enrollment period for 2023 coverage.

The Centers for Medicare and Medicaid Services have included the new TPMO requirements in a new set of Medicare Advantage and Medicare Part D prescription drug plan rules for 2023.

“TPMOs can play a role in helping a beneficiary find a plan that meets their needs,” officials say in the preamble or official introduction to the new final rule.

But “additional regulatory oversight is needed to protect Medicare beneficiaries from confusing and potentially misleading activity in this space,” the officials say.

Officials note that they received 39,617 complaints related to Medicare plan marketing in the first 11 months of 2021, compared to 15,497 for all of 2020, and that a high percentage of complaints were about TPMO marketing.

“In addition, we have seen an increase in third-party print and television advertisements, which appears to be corroborated by state partners,” officials said.

What this means

The new regulations could add regulatory requirements for all Medicare merchants and vendors.

The new rules could also help some longtime sellers of Medicare plans, who have complained in recent years about large national marketing organizations using TV ads and high-priced call centers to compete with them.

Local agents and brokers argued that, in some cases, television ads painted an unrealistic picture of what one of the Medicare Advantage plan providers was.

The regulatory process

The new final rule is based on the draft 2023 CMS Medicare plan rule released in January.

CMS is preparing to publish the regulations in the Federal Register — an official government rule-making publication — on May 9.

The rule

In the new regulations, CMS defines any organization that is paid to “perform lead generation, marketing, sales, and enrollment-related functions as part of the enrollment chain” in a Medicare Advantage plan or a Medicare Part D prescription drug plan such as a TPMO.