The Centers for Medicare & Medicaid Services (CMS) recently released their 2023 final rule, which includes two requirements that will have a significant impact on independent agents and brokers who sell Medicare Advantage (MA) and Prescription Drug Plans (PDP’s). In my opinion, this new CMS requirement will adversely affect Medicare beneficiaries because many independent insurance agents and brokers will no longer market or sell MA or PDP’s because of these onerous rules. Consequently, many Medicare beneficiaries will be left on their own to shop for these plans.

Although these new marketing guideline changes are for calendar year 2023, they begin on October 1st, 2022, just before the start of the 2023 Annual Election Period (AEP) for Medicare Advantage and prescription drug plans.

NOTE: The AEP begins on October 15th each year and ends on December 7th. Unless you are in a Special Enrollment Period (SEP), this is the only time of year you can switch to or from an MA or a PDP. With Medicare Supplements, you can change your plan any time of the year.

This new CMS ruling is in response to misleading TV commercials by Third Party Marketing Organizations (TPMO’s) and numerous consumer complaints to CMS. Under these new guidelines, the definition of TPMO’s has been expanded to include agents and brokers. The new definition of TPMO is too broad and will negatively impact many entities that are acting responsibly such as individual agents and brokers who will now be subject to new call recording requirements (see next section). It has been argued that consumer dissatisfaction is not usually with their insurance agent but with TPMO call centers that solicit beneficiaries to switch plans that do not necessarily meet their needs.

Do you recall those TV commercials and pitches from celebrities and pitchmen like Joe Namath, William Shatner, Jimmie Walker, etc.? They promise things from free meal delivery to money deposited in your Social Security account. A few MA plans may offer meal delivery for certain qualified individuals, but only one or two plans in your county may offer those benefits, but most don’t. And while the dental and vision coverage of MA plans may sound great, many plans only include routine visits, not more expensive items like dental implants, eyeglasses, etc.

There are a couple of things you need to consider before you race to your phone to “Call Now.” First, Joe Namath, while he may be a perfectly upstanding gentleman, is no Medicare expert. He is a paid endorser. In fact, I doubt he even understands what a Medicare Advantage plan is. Even if he is on a Medicare Advantage plan, I doubt he is concerned with the potential out of pocket costs involved. I believe his $25 million net worth may place him a little out of touch with the average American budget. Second, be aware that he is speaking on behalf of the Medicare Coverage Hotline, not Medicare. And if you were to pause the commercial on the last slide, you would see that The Medicare Coverage Hotline is a for-profit lead generation campaign. This means that they are simply trying to get you to call their 800 number so they can sell you as a lead to an insurance agent.

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New Call Recording Requirement

Agents and brokers must now record all sales calls with potential clients in their entirety including the enrollment process. These recordings must be retained in a HIPAA-compliant manner for 10 years! This applies to all new and existing clients.

What is considered a sales call? Anything that falls under the “chain of enrollment,” which is defined as the events from the point when a Medicare beneficiary becomes aware of an MA or PDP to the end of the enrollment process. This means when an agent is calling leads, scheduling appointments, collecting drug and provider lists and conducting education meetings and phone enrollments. All of these calls would fall under this category and must be recorded!

NOTE: Medicare Supplements are not included in the new call recording rules. However, if an agent is selling a Medicare Supplement and a PDP, the call must be recorded.

Zoom meetings must also be recorded. Only in-person, face-to-face marketing and sales appointments are excluded, however any follow-up calls related to sales and completing the enrollment process must be recorded. Sales calls conducted on cell phones must also be recorded.

Phone Recording Problems for Agents and Medicare Beneficiaries

This new phone recording requirement will add an additional burden to insurance agents attempting to assist Medicare beneficiaries when selecting suitable health and drug plans. According to the The National Association of Health Underwriters (NAHU), who are advocating against these new CMS changes, “The cost of setting up a HIPAA-compliant audio recording system with adequate and protected storage capabilities far exceeds the abilities of many of these licensed and certified agents who are now facing a decision as to whether to participate in this fall’s AEP.”

There is also a concern from Medicare beneficiaries who do not wish to have their enrollment recorded. An enrollment conversation can last hours, during which beneficiaries may disclose several private details about their health, financials and personal life. Many seniors are not comfortable with the requirement that these conversations be recorded and stored for up to 10 years, regardless of the protections that may be put in place for the recordings.

NAHU

New Disclaimer Requirement

When discussing MA or PDP’s, insurance agents must use the following disclaimer:

“We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all your options.”

Agents must include the new disclaimer in the following places:

• Verbally stated during the first minute of a sales phone call
• Electronically conveyed when communicating with a potential client via email, online chat, or other electronic form of communication
• Prominently displayed on the agent’s website
• On all marketing materials, in print (12-point font) and television advertisements

Contact Congress Today to Delay this New CMS Marketing Rule

Please click here to contact your member of Congress to request that CMS implement a delay of six to 12 months, during which CMS will work with stakeholders to develop marketing regulations that will protect Medicare beneficiaries while allowing them access to their trusted independent agent or broker.