On April 4, 2024, CMS published a final rule implementing certain policy changes to the Medicare Advantage (MA) Program (Medicare Part C) and the Medicare Prescription Drug Benefit Program (Medicare Part D). According to the fact sheet accompanying the rule, “the changes in this final rule build on existing Biden-Harris Administration policies to strengthen protections and guardrails, promote healthy competition, and ensure Medicare Advantage and Part D plans best meet the needs of enrollees.” The specific policy changes include revisions to the compensation rules for agents and brokers to thwart anti-competitive steering, limitations on distribution of beneficiary data by Third Party Marketing Organizations (TPMOs), improvements to access to behavioral health, and changes to the composition and requirements of utilization management committees. The changes in the rule will take effect June 3, 2024.
Guardrails for Agent and Broker Compensation
The final rule updates CMS’s existing regulations governing the compensation that agents and brokers can receive for enrolling Medicare beneficiaries into MA and Prescription Drug Plans (PDPs). The existing regulations limit the compensation brokers and agents can receive from MA and PDP plans, but permit plans to make additional, uncapped payments to cover administrative costs such as training and operational overhead. CMS has observed that MA and PDP plans are offering bonuses and perks (i.e., golf parties, trips, extra cash) framed as administrative add-ons in exchange for meeting enrollment goals. This practice is anti-competitive in the agency’s view and risks compromising the impartiality of agents and brokers. The final rule closes this perceived loophole by incorporating administrative costs into the compensation limits.
The final rule also prohibits plans from entering into what CMS labels as anti-competitive contracts with agents and brokers. The new regulations specifically prohibit contract terms between plans and agents or brokers that may “directly or indirectly interfere with the agent’s or broker’s ability to objectively assess and recommend the plan which best fits the beneficiary’s health care needs.”
Limiting Distribution of Beneficiary Data by Third-Party Marketing Organizations
CMS has observed that Third-Party Marketing Organizations (TPMOs)—entities that are compensated for facilitating enrollment in an MA or PDP plan, including agents and brokers—have been distributing and sometimes selling beneficiary contact information to other TPMOs. This information is typically collected at the time a beneficiary initiates contact with a TPMO about potentially enrolling in a plan. As CMS explains in the final rule, some TPMOs, “in quickly read disclaimers or through web or printed material-based disclaimers in very small font, inform the beneficiary that their personal contact information may be sold or distributed to other entities.” CMS had proposed to categorically prohibit TPMOs from selling beneficiary contact information. But the final rule allows TPMOs to sell beneficiary contact information if the TPMO receives express written consent from the beneficiary.
Annual Health Equity Analysis of Utilization Management Policies and Procedures
Existing CMS regulations require MA plans to establish a Utilization Management (UM) Committee to review and approve all UM policies and procedures at least annually to ensure consistency with traditional Medicare’s national and local coverage decisions and relevant Medicare statutes and regulations. The final rule revises those regulations to specify that at least one member of the UM Committee must have expertise in health equity. The final rule also requires the UM Committee to conduct an annual health equity analysis of prior authorization policies and procedures used by the MA plan. The MA plan will be required to publish the results of that analysis on its website.
Improving Access to Behavioral Health Care Providers
CMS is modifying its regulations governing network adequacy standards for MA plans. Under the new regulations, the adequacy evaluations will take into consideration the number of “Outpatient Behavioral Health” providers and facilities that are part of the network. This includes marriage and family therapists, mental health counselors, opioid treatment programs, community mental health centers and other behavioral health and addiction medicine specialists and facilities.
Mid-Year Enrollee Notification of Available Supplemental Benefits
Most MA plans offer supplemental benefits, including vision, hearing, fitness and dental, that are in addition to standard Medicare benefits. These benefits, which are subsidized by the government through rebates, are intended to address unmet social determinants of health needs, such as food insecurity or inadequate access to transportation. MA plans have reported in recent years that enrollee utilization of these supplemental benefits is low. To address this, the final rule requires MA plans to issue notices to enrollees who, by June 30th of a given year, have not utilized supplemental benefits available to them.
A copy of the final rule is available here, and a CMS press release about the rule is available here.
