CMS Begins Bringing Down the Hammer on Aggressive Marketing Tactics by MAOs and TPMOs

The Centers for Medicare and Medicaid Services (CMS) have heard beneficiary complaints about predatory marketing tactics by Medicare Advantage (MA) companies and is taking action.

In August, Senator Ron Wyden (D-Ore.), Chair of the Senate Finance Committee, began an investigation into deceptive marketing practices . Last week, the Senate Finance Committee offered recommendations to CMS to reduce the number of complaints made by beneficiaries about advertising and sales tactics from MA companies based on the findings of this inquiry.

Nine out of 10 of the states that responded to the Senator’s questions reported an increase in complaints to insurance commissioners or state health insurance assistance programs, Healthpayer Intelligence reports. These complaints most often cited mail advertisements, telemarketing and television advertisements, often including false promises of adding money to Social Security payments.

But CMS is now on the case, according to Associated Press, the agency now has staff shopping for plans through numbers listed on similar advertisements. And it’s working, the operation has already discovered specific insurance agents using inaccurate information to sell plans.

The federal agency also sent fair warning to insurers and third-party marketing organizations (TPMOs) explaining the do’s and don’t’s of the CMS final rule from May that established marketing and communications requirements for MA and Part D plans. In a memo, it clarified when calls must be recorded, how long they must be retained and the content of TPMO disclaimers.

Insurers are pushing back on the idea that marketing tactics have suddenly become worse, pointing to market saturation, competition for enrollees and the COVID-19 pandemic for the sudden influx in complaints from seniors. According to Modern Healthcare, companies are looking for more niche demographics, like veterans, dual eligibles and non-English speaking populations for targeted advertisements. As the number of specific groups increases, so does the volume of total advertisement.