On May 10, 2023, the Center for Medicare & Medicare Services (“CMS”) issued guidance to clarify the definition of “marketing” for Medicare Advantage Plans (“MA Plans”) and Prescription Drug Plans (“PDPs”).¹ The new definition expands “marketing” to include activities intended to draw a consumer’s attention to an MA Plan or PDP, influence a consumer’s decision-making process, or influence a consumer’s decision to stay enrolled in an MA Plan or PDP. This new definition of marketing takes effect on July 10, 2023.

Previous Standards for Marketing

Pursuant to 42 CFR §§ 422.2260 and 423.2260, the definition of “marketing” means any communications or materials that meet both the “content” and “intent” standards. The “intent” standard is defined as “any materials and activities which intend to draw a beneficiary’s attention to a Medicare Advantage plan or plans or influences a beneficiary’s decision when selecting a plan or staying enrolled in a plan.” The “content” standard is defined as any material or activities which include or address the following: “a) plan benefits, benefits structure, premiums, or cost sharing, b) measuring or ranking standards, and c) rewards and incentives.” CMS interpreted the regulatory definition to allow marketing materials to address or include a wide range of benefits available, including vision, dental, premium reduction, and hearing, without being subject to Medicare marketing regulations.

What led to the Change in Definition?

Due to the general description of the wide range of benefit plans in marketing materials, CMS believes that enrollment in these plans are less likely because the descriptions lacked an associated cost. However, CMS found through surveillance of their organization and other Third-Party Marketing Organizations that many beneficiaries do inquire about the plans, and some enroll. Some of these inquires included beneficiaries contacting agents, making calls to CMS, and responding to marketing flyers. As a result, CMS decided to expand the “marketing” definition to prevent misleading marketing practices.

Expanded Definition of Marketing

Beginning July 10, 2023, any materials or activities that address benefits contained in MA Plans or PDPs including, dental, vision, cost-savings, or hearing services will meet the intent and content standard. All marketing materials or activities must be filed with CMS to verify compliance before marketing to beneficiaries.² Further, the federal regulation implements extensive marketing requirements to address confusing advertisements and protect beneficiaries. Some of these requirements include “limiting the use of the Medicare name, logo, and Medicare card; prohibiting superlatives in marketing unless the material provides documentation to support the claim; and prohibiting marketing materials that do not address a specific plan.”³

Recommendations

Therefore, MA Plans and PDPs, their agents and marketing representatives, should file their marketing materials with CMS and ensure their marketing materials are compliant with the federal regulation and Medicare Communications and Marketing Guidelines before advertising. Further, these organizations should pay special attention to their use of social media influencers and social media posts as general descriptions of Medicare Advantage plans are now considered marketing and subject to federal regulation.

Special thanks to Mia Guy, Squire Patton Boggs (US) LLP 2023 Summer Associate, for her contribution to this post.

Footnotes

1. CMS Memo, Definition of Marketing (May 10, 2023), available at DEPARTMENT OF HEALTH & HUMAN SERVICES (triagehealthlawblog.com).

2. See Federal Register, Medicare Program; Contract Year 2024 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly, www.federalregister.gov (April 12, 2023), https://www.federalregister.gov/d/2023-07115

3. Center for Medicare & Medicaid Services, 2024 Medicare Advantage and Part D Final Rule (CMS-4201-F), www.cms.gov (April 5, 2023), 2024 Medicare Advantage and Part D Final Rule (CMS-4201-F) | CMS.