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Medicare Compliance & Reimbursement

Medicare Advantage:

New Rule Circumvents Beneficiary Data Sharing

Published on Tue May 21, 2024

Feds also aim to rein in brokers’ avarice.

With rising concerns that third-party brokers are pushing beneficiaries into Medicare Advantage while pocketing higher compensation, CMS aims to curb predatory practices with stricter parameters and beneficiary protections in the new rule.

Context: Last month, the Centers for Medicare & Medicaid Services (CMS) issued a final rule in the Federal Register that impacts the remainder of the 2024 Contract Year (CY) and the 2025 CY. The rule finalizes equity proposals and strengthens access, healthcare options, and protections for patients in Medicare Advantage (MA) plans. A primary policy change includes a revised compensation structure for third-party marketing organizations (TPMO) as well as new data sharing restrictions. These policies are designed to protect consumers and deter agents from directing beneficiaries toward coverage plans based on broker payments instead of the patients’ medical needs.

“CMS is continuing its commitment to ensuring that Medicare Advantage and Part D prescription drug plans remain strong, stable, and affordable for people with Medicare,” said CMS Administrator Chiquita Brooks-LaSure in a release. “This final rule builds on Biden-Harris Administration efforts to strengthen consumer protections so that people with Medicare can more easily choose the Medicare coverage options that are right for them.”

Check Out the Changes to Broker Rules

Among CMS’ updates for TPMOs, the two biggest involve compensation and data sharing. CMS first mentioned regulating TPMOs and improving oversight in the 2023 MA and Part D proposed rule (see Medicare Compliance & Reimbursement, Vol. 48, No. 4).

First: “In the CY 2024 proposed rule, CMS proposed a blanket prohibition on TPMOs distributing personal beneficiary data to other TPMOs,” explain attorneys with Sheppard Mullin in online legal analysis. However, “CMS did not finalize its proposed rule, but finalized a modified version that permits TPMOs to share personal beneficiary data with other TPMOs for marketing or enrollment purposes only if they first obtain express written consent from the relevant beneficiary,” the Sheppard Mullin lawyers say.

Additionally, the TPMOs must ensure the written consent was obtained through a transparent disclosure process in alignment with both Federal Trade Commission (FTC) and Federal Communications Commission (FCC) regulations.

The rule also ties in existing HIPAA Privacy Rule restrictions related to data sharing in telemarketing, with a reminder that both covered entities and business associates are required to safeguard protected health information (PHI), say attorneys Edo Banach, Michael S. Kolber, Christine M. Reilly, and Angela Haddon with law firm Manatt Phelps & Phillips. “For example, a TPMO that is a business associate of an MA plan must use PHI only for communicating on behalf of the MA plan and not to market the TPMO’s goods or services,” Banach, Kolber, Reilly and Haddon warn in online legal analysis.

Second: CMS wanted to revamp the compensation methodology, implementing a “clear, fixed amount that agents and brokers can be paid regardless of the plan the individual enrolls in, addressing loopholes that result in commissions above this amount that create anti-competitive and anti-consumer steering incentives,” the agency notes in a fact sheet.

The final rule added these changes surrounding TPMO compensation:

  • Redefines compensation, “so that it is inclusive of all activities associated with the sales to/enrollment of an individual into a Medicare Advantage or Part D plan,” the fact sheet notes.
  • Adds a one-time fixed compensation rate increase of $100 for agents and brokers for the initial beneficiary enrollment to an MA or Part D plan. This is effective starting with the 2025 contract year.
  • Prohibits contract terms between MA and Part D plans and TPMOs that “directly or indirectly” incentivize agents and brokers to push beneficiaries into certain plan enrollments.

Review 5 Other Rule Takeaways

Even though the pandemic is in the rear view mirror, CMS continues to foster equity-focused policies and encourage more behavioral health options. This latest rule highlights new requirements for MA and Part D plans while implementing new reporting and cost-saving policies. Here is a brief overview of five changes to know:

1. Behavioral health: Building on its 2023 MA final rule provisions (see Medicare Compliance & Reimbursement, Vol. 49, No. 9), CMS finalized more network adequacy standards to maintain alignment with the agency’s Behavioral Health Strategy, which was introduced in 2022. “CMS is adding network adequacy evaluation standards for a new facility-specialty provider category, called ‘Outpatient Behavioral Health,’ that will include a range of behavioral health providers under one category,” notes a fact sheet on the rule. Specialists include: Opioid Treatment Program providers; Community Mental Health Centers; addiction medicine physicians, and other providers, like nurse practitioners (NPs), physician assistants (PAs), and Clinical Nurse Specialists (CNSs); and newly-added marriage and family therapists (MFTs) and mental health counselors (MHCs).

2. Health equity: CMS will require MA Organizations’ (MAOs) utilization management committees to improve prior authorization policymaking with the following equity updates: have a health equity expert on staff; analyze and update equity policies annually; and post the MA plan’s equity analysis online.

3. Patient appeals: In the rule, CMS opts to align the MA enrollee appeals process with that of Traditional Medicare. Now, a Quality Improvement Organization (QIO) instead of the MA plans will “fast track appeals,” and CMS also “eliminate[d] the provision requiring forfeiture of an enrollee’s right to appeal a termination of services from these providers when they leave the facility,” the agency says.

4. Dually eligible: There are a few updates in the final rule that protect dually eligible enrollees who receive services from both an MAO and Medicaid. Those top actions include, according to the fact sheet:

  • Increase “the percentage of dually eligible Medicare Advantage enrollees who are in affiliated Medicaid managed care plans, as opposed to Medicare Advantage plans that differ from the enrollee’s Medicaid plan.”
  • “Reduce cost-shifting to Medicaid, increase payments to safety net providers, expand dually eligible enrollees’ access to providers, and protect dually eligible enrollees from unaffordable costs” for MA dually eligible special needs plans (D-SNPs) in preferred provider organizations (PPO).

5. RADV appeals: In an effort to streamline MA Risk Adjustment Data Validation (RADV) appeals, CMS revised the process. Now “Medicare Advantage organizations that request a medical record review determination appeal may only request a payment error calculation appeal after the completion of the medical record review determination administrative RADV appeal process,” CMS says.

The regulations take effect June 3, 2024.

Resources: Find the fact sheet at www.cms.gov/newsroom/fact-sheets/contract-year-2025-medicare-advantage-and-part-d-final-rule-cms-4205-f.

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