Centers for Medicare & Medicaid Services (CMS), HHS.
Final rule.
This final rule revises the Medicare Advantage (MA) program (Part C) and Medicare Prescription Drug Benefit Program (Part D). The regulation contains new regulatory provisions regarding marketing processes for both programs. The revisions to the Part C and Part D programs are based on lessons we have learned since 2006, the initial year of the prescription drug program and the revised MA program.
Chevell Thomas, 410–786–1387.
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108–173) was enacted on December 8, 2003. The MMA established the Medicare Prescription Drug Benefit Program (Part D) and made revisions to the provisions in Medicare Part C, governing what is now called the Medicare Advantage (MA) program (formerly Medicare+Choice). The MMA directed that important aspects of the new Medicare Prescription Drug Benefit Program under Part D be similar to and coordinated with regulations for the MA program.
The MMA also directed implementation of the prescription drug benefit program and revised MA program provisions by January 1, 2006. The final rules for the MA and Part D prescription drug programs appeared in the
As we have gained more experience with the MA and the Part D programs, we are revising areas of both programs. Many of these revisions clarify existing policies or codify current guidance for both programs. We believe that these changes will help plans understand and comply with our policies for both programs and aid MA organizations and Part D plan sponsors in implementing their health care and prescription drug benefit plans.
The Balanced Budget Act of 1997 (BBA), Public Law 105–33, established a new “Part C” in the Medicare statute (sections 1851 through 1859 of the Social Security Act (the Act)) which provided for a Medicare+Choice (M+C) program. Under section 1851(a)(1) of the Act, every individual entitled to Medicare Part A and enrolled under Medicare Part B, except for most individuals with end-stage renal disease (ESRD), could elect to receive benefits either through the Original Medicare program or an M+C plan, if one was offered where he or she lived.
The Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (BBRA), Public Law 106–111, amended the M+C provisions of the BBA. Further amendments were made to the M+C program by the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) (Pub. L. 106–554), enacted December 21, 2000.
As noted above, the MMA was enacted on December 8, 2003. Title I of the MMA added a new “Part D” to the Medicare statute (sections 1860D–1 through 1860D–42) creating the Medicare Prescription Drug Benefit Program, the most significant change to the Medicare program since its inception in 1965.
Sections 201 through 241 of Title II of the MMA made significant changes to the M+C program which was established by the Balanced Budget Act of 1997 (BBA) (Pub. L. 105–33). Title II of the MMA renamed the M+C program the MA program and included new payment and bidding provisions, added authority for new regional MA plans and special needs plans, reestablished authority for medical savings account (MSA) plans that had been provided in the BBA on a temporary basis, and made other changes to the provisions of Part C. Title I of the MMA created prescription drug benefits under Medicare Part D, and a new retiree drug subsidy program.
Both the MA and prescription drug benefit regulations were published separately, as proposed and final rules, though their development and publication were closely coordinated. On August 3, 2004, we published in the
Based on what we learned in program experience subsequent to the promulgation of the initial regulations implementing the MMA, on May 16, 2008, we proposed additional revisions to the Part C and D regulations that proposed to incorporate certain existing policies into the regulations, and make some revisions to policies based on program experience (73 FR 28556). The proposals in this May 16, 2008, notice of proposed rulemaking (proposed rule) included proposals addressing the marketing of Part C and Part D plans to Medicare beneficiaries. While the proposed rule also included a wide range of other proposals, in this final rule, we are only finalizing certain proposals in the May 16, 2008, proposed rule relating to marketing.
The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), Public Law 110–275 was enacted on July 15, 2008, and amended titles XVIII and XIX of the Social Security Act to make various revisions to the Medicare statute intended to improve the Medicare program. Section 103 established new statutory prohibitions and limitations for MA plans and Medicare Prescription Drug plans (PDPs) on certain sales and marketing activities. Many of these new statutory marketing provisions were similar (or identical) to provisions that we proposed in our May 16, 2008, proposed rule. For example, MIPPA specifically prohibits, while performing marketing activities to promote or sell MA plans or PDPs, any unsolicited means of direct contact with beneficiaries, cross-selling of non-health related products, and providing meals. It also prohibits sales and marketing
MIPPA also places limits on other marketing activities. Specifically, it limits the following: the scope of the discussion during an appointment set with a beneficiary to discuss an MA plan or PDP to what was agreed upon with the beneficiary in advance; the ability to use names and logos of co-branded network providers on plan membership and marketing materials; the value of gifts and promotional items provided to beneficiaries; and the compensation paid by plans to agents for selling MA and Part D products. In addition, it requires the training and testing of agents and brokers selling MA and Part D products. MIPPA also requires plans and CMS to collaborate and share information with the States.
The above MIPPA provisions enact into statute provisions we proposed through our authority to establish marketing rules through rulemaking, and thus effectively would supersede our regulatory proposals. Pursuant to MIPPA, the marketing prohibitions provisions mentioned above apply to the plan year beginning on January 1, 2009. In keeping with statutory intent and based on policy concerns related to inappropriate marketing activity, we believe that regulations setting forth important protections for beneficiaries should be in effect before the 2009 plan year marketing campaign begins this fall on October 1, 2008. We are finalizing our May 16, 2008 proposals in these areas in this final rule so that the marketing rules in question can be effective for the 2009 benefit year marketing campaign, beginning October 1, 2008. These provisions are set forth in this final rule at § 422.2268, § 423.2268, 422.111(b) and 423.128(b).
Specifically, this final rule finalizes six new marketing provisions and modifies the disclosure and dissemination of Part D information provisions and the file and use provision set forth in the May 16, 2008, proposed rule. The remaining proposals in the proposed rule either were superseded by statutory provisions that we will reflect in the regulations as part of an interim final rule, or will be finalized in a future final regulation in which we will respond to any public comments on those proposals in the May 16th proposed rule that were not superseded by MIPPA provisions.
Because this final rule finalizes only the recodification and modification of existing sections of the marketing regulations at § 422.80, § 423.50, § 422.111, and § 423.128 and finalizes only six of the new provisions from the proposed rule, we shall only discuss these aspects of the May 16, 2008 proposed rule here. The following table displays how the proposed rule proposed to recodify existing marketing provisions, and the bullets that follow the table set forth those proposals in the May 16, 2008 proposed rule that we are addressing in this final rule.
• § 422.2262(b) and § 423.2262(b)—we proposed to eliminate the file and use eligibility process.
• § 422.2268(b) and § 423.2268(b)—we proposed to prohibit the offering of gifts to potential enrollees unless the gifts are of nominal value, and prohibit providing meals to beneficiaries while conducting marketing activities. We are only finalizing the prohibition on meals in this final rule, and thus are separating these two prohibitions. The nominal gifts provision will be addressed in a separate rule that implements the requirement that new MIPPA rules be in place no later than November 15, 2008.
• § 422.2268(d) and § 423.2268(d)—we proposed to extend the prohibition against door-to-door solicitation to include other instances of unsolicited direct contact including outbound telemarketing without the beneficiary initiating contact.
• § 422.2268(f) and § 423.2268(f)—we proposed to prohibit the cross-selling of non-health care related products during any sales, marketing, or presentation for an MA plan or PDP.
• § 422.2268(k) and § 423.2268(k)—we proposed to prohibit conducting sales presentations or distributing and accepting plan applications in provider offices or other places where health care is delivered.
• § 422.2268(l) and § 423.2268(l)—we proposed to prohibit conducting sales activities, distributing, or collecting applications at education events.
• § 422.2272(c) and § 423.2272(c)—we proposed that plans must appoint and use only State licensed representatives to conduct direct marketing activities in accordance with applicable State appointment laws.
• § 422.111 and § 423.128—we proposed that plans must disclose the information specified in §§ 422.111(b) and 423.128(b) to its members both at the time of enrollment and at least annually thereafter, 15 days before the annual coordinated election period.
We received a total of 405 timely comments on the May 16, 2008 proposed rule, and will only address here those comments that pertain to the proposals we are finalizing in this final rule. We received comments from managed care organizations and other insurance industry representatives, pharmacy benefit management firms,
Brief summaries of each proposed provision, a summary of the public comments we received, and our responses to the comments are set forth below.
In order to implement standards consistent with “fair marketing” practices in accordance with sections 1851(h) and 1860D–1(b)(1)(B)(vi) of the Act, and to ensure beneficiaries receive the necessary information to make informed choices during the annual election period, we proposed to amend and expand our marketing regulations for both the MA and the Part D programs. Moreover, due to the proposed addition of new marketing provisions and the need to clarify current marketing regulations, we proposed to remove §§ 422.80 and 423.50 of subpart B, which currently specify the requirements related to the approval of marketing materials and instead include this core of our marketing requirements in a new subpart V at 42 CFR parts 422 and 423 specific to the marketing regulations for each program.
In addition to moving our requirements concerning the approval of marketing materials and election forms to §§ 422.2262 and 423.2262 of the Part C and Part D program regulations, respectively, we are proposing to modify the “file and use” review process.
While the statute requires the submission of marketing materials to CMS for a 45 day period of CMS review, based on years of program experience CMS recognized that some MA organizations consistently met all marketing standards, and that their marketing materials warranted less scrutiny. CMS accordingly established a file and use policy that was designed to streamline the marketing materials approval process for these MA plans. Under this file and use policy, Medicare health plans that demonstrated to the satisfaction of CMS that they continually met a particular high standard of performance were able to publish and distribute certain marketing materials within 5 days of submission to CMS under section 1851(h)(1), without waiting for a response from CMS.
In effect, these materials were deemed approved by CMS after 5 days based on CMS's prior review of earlier materials. The criteria in order to be eligible for the original file and use policy were that a contracting entity had to have submitted at least eighteen months of marketing materials for CMS review, and at least ninety percent of the materials submitted within the past six months had to meet applicable marketing standards.
In the regulations implementing the MMA, CMS adopted a separate file and use policy that was based on the nature of the marketing materials in question, rather than the track record of the MA organization or PDP sponsor. Under this policy, an MA organization or PDP sponsor certifies that it is using either model language already reviewed and approved by CMS, or types of marketing materials that CMS has identified as not containing substantive content. As with the original policy that focused on the organization, the materials covered by this new file and use certification policy could be used 5 days after submission, without any explicit approval from CMS. In the case of MA organizations, this certification is made at the time of submission, while PDP sponsors are permitted to so certify in their contracts.
In order to level the playing field among contractors, eliminate redundancies, and focus resources on materials that have content that warrants CMS scrutiny, we are proposing to eliminate file and use status based on an organization's track record, and apply a uniform policy of applying the file and use policy to marketing materials that either use model language without substantive modification, or materials that are
We proposed making an organizational change for this section, consistent with our proposal to create a new subpart V at 42 CFR part 422 and part 423 specific to marketing regulations. We are redesignating §§ 422.80 and 423.50 as §§ 422.2268 and 423.2268, respectively.
We proposed an organizational change for this section, consistent with our proposal to create a new subpart V at 42 CFR part 422 and part 423 specific to marketing regulations. We are redesignating § 422.80(f) as § 422.2276 and, to be consistent, are adding § 423.2276.
In response to questions from the Part D industry regarding State licensure of marketing representatives, we adopted in our
Based on the experience we have gained since the start of the Part D program, and continued experience with the Medicare Advantage program, we proposed to codify in the regulation our existing requirement that MA organizations and Part D sponsors utilize only State-licensed marketing representatives to do marketing in the States that license such agents.
We further proposed to add a regulatory requirement to §§ 422.2272 and 423.2272 that MA organizations and PDP sponsors that market through agents, not only be required to use licensed agents, but would be required to report to States that they are using such agents, in a manner consistent with State appointment laws. State appointment laws require MA and PDP sponsors to appoint marketing representatives before the agent can market a plan's product. Appointment laws may require an insurance plan to maintain a registry of marketers who sell their plans, including maintaining a list of license numbers, dates the individual began selling policies for the insurance company, and stopped selling plans for the insurance company. While we previously required only that licensed agents be used, and did not require that the appointment of such agents be reported to the State agency that regulates agents, we believe this latter requirement would enable States to monitor the agents' activities in connection with their Medicare marketing for the purpose of monitoring the agent's fitness to engage in marketing in the State. We believe Medicare beneficiaries would benefit from this State monitoring.
We recognize that, under the preemption provisions in section 1856(b)(3) of the Act (incorporated for PDPs under section 1860D–12(g)), States do not have the authority to regulate the marketing of Medicare Part C and D plans. However, as noted, any abuses by an agent in marketing such plans would have direct relevance to the State's oversight of the agent generally, and implications for the agent's marketing of products over which the State has jurisdiction, and Medicare beneficiaries would benefit from having the agents who engage in Medicare marketing subject to this State oversight.
In the context of the requirement that MA organizations and Part D sponsors utilize only State-licensed marketing representatives, and report the appointment of such agents to States consistent with the procedures under State appointment laws, it is important to discuss the activities that would not trigger the need for using State-licensed marketing representatives. As standard practice, MA organizations and Part D sponsors employ customer service representatives who answer questions and accept enrollments on behalf of enrollees who have decided to enroll in a particular plan offered by the organization. We recognize that plan customer service representatives play an important role in disseminating information by answering factual questions posed by beneficiaries, and that such an activity is distinguishable from the act of steering to a plan (“marketing,” as defined in the
Additionally, taking demographic information from someone who has decided to enroll in the plan, in order to complete an application, is not steering in that the beneficiary has already made a choice to enroll in a plan. Accordingly, we believe providing factual information, fulfilling a request for materials, and taking demographic information in order to complete an enrollment application at the initiative of the enrollee by a customer service representative (CSR), are legitimate customer service activities that would
One commenter urged that the proposed rule on licensed agents include clarifying language similar to the language in the preamble, and in the
A few commenters believed CMS should revise this section to clarify that State agent appointment laws are enforceable against MA and Part D plan sponsors.
In addition, we also proposed to clarify in §§ 422.2268 and 423.2268 several standards for MA and PDP marketing. In §§ 422.2268(d) and 423.2268(d) we clarify that the prohibition on door-to-door solicitation includes other instances of unsolicited direct contact, such as outbound calling without the beneficiary initiating contact, calling to confirm that the beneficiary is in receipt of mailed information, and accepting appointments made by third parties or independent agents without the beneficiary initiating contact; but does not include calling existing members. Although, plans may not contact former members who have disenrolled or are in the process of disenrolling. We believe this clarification would help prevent inappropriate conduct on the part of agents in aggressively pursuing the marketing of MA plans and PDPs to beneficiaries outside of approved common areas that may be used for marketing displays and presentations (for example, approaching beneficiaries directly in parking lots).
We also proposed to clarify in §§ 422.2268(l) and 423.2268(l) that plans may not engage in sales or marketing activities, including the distribution or collection of plan applications, at educational events. These events may be sponsored by plans or by outside entities, and are events
We further proposed a regulatory requirement in §§ 422.2268 and 423.2268, providing additional protections to ensure beneficiaries are not the victims of inappropriate marketing techniques. In §§ 422.2268(f) and (b) and § 423.2268(f) and (b), we proposed to prohibit in any MA or Part D sales activity or presentation, the provision of meals or the cross-selling of non-health care related products to a prospective enrollee.
In response to the comment regarding reporting requirements for door-to-door solicitation and in-home appointments, we will consider including detailed guidance in the
We are finalizing our proposal in our May 16, 2008 proposed rule to specify in §§ 422.111(a)(3) and 423.128(a)(3) that plans must disclose the information specified in §§ 422.111(b) and 423.128(b) of the MA and Part D program regulations, respectively, both at the time of enrollment and at least annually thereafter, 15 days before the annual coordinated election period. This is essential to ensuring that current enrollees receive comprehensive information necessary for making an informed decision regarding their health care options prior to the annual coordinated election period. Note that MIPPA made a related change affecting special needs plans disclosure requirements which we will discuss in a regulation to be published at or about the same time as this final rule.
This final rule relocates to the new subpart V, sections from subparts B and C related to marketing definitions, marketing materials, and other marketing requirements:
We are making an organizational change for this section, consistent with
• We are making an organizational change for this section, consistent with our proposal to create a new subpart V of 42 CFR parts 422 and 423 specific to marketing. We are moving §§ 422.80(a) and 423.50(a), which describe the review and distribution of marketing materials, to §§ 422.2264 and 423.2264, respectively, and making the language consistent between the two sections as 423.50 was missing the provision now located at § 423.2264(a)(2)(i); allowing Part D sponsors to distribute their marketing materials 5 days following their submission to CMS provided the Part D sponsor is deemed to meet certain performance requirements established by CMS. In addition to moving these requirements to §§ 422.2262 and 423.2262 of the Part C and D program regulations, respectively, we proposed to modify the “file and use” review process. We are moving forward with our proposal to eliminate the file and use eligibility process.
We are making an organizational change for this section, consistent with our proposal to create a new subpart V of 42 CFR parts 422 and 423 specific to marketing regulations. We are moving §§ 422.80(c) and 423.50(d), which describe specific guidelines for CMS review of marketing materials and election forms, to §§ 422.2264 and 423.2264, respectively.
Consistent with our proposal to create a new subpart V of 42 CFR parts 422 and 423 specific to marketing regulations, we are making an organizational change for this section. We are removing §§ 422.80(d) and 423.50(e) and adding §§ 422.2266 and 423.2266, respectively. The provision concerns CMS' deemed approval of the distribution of marketing materials.
This final rule also incorporates six of the new provisions from the proposed rule and relocates several of the provisions that already existed in §§ 422.80 and 423.50. The remaining provisions from the May 2008 proposed rule will be incorporated into regulations that will be released later this year. There are four provisions of this final rule that differ from the May 16, 2008, proposed rule:
• Sections 422.2268(a) and 423.2268(a) in the proposed rule have been modified by removing the sentence, “This does not prohibit explanation of any legitimate benefits the beneficiary might obtain as an enrollee of the MA plan, such as eligibility to enroll in a supplemental benefit plan that covers deductibles and coinsurance, or preventive services” and “This does not prohibit explanation of any legitimate benefits the beneficiary might obtain as an enrollee of the Part D plan,” respectively. This was done because each sentence creates ambiguity with respect to the prohibition against cash inducements in the respective first sentence of the provision.
• Sections 422.2268(b) and 423.2268(b) have been redesignated as § 422.2268(p) and 423.2268(p), respectively. This modification separates the prohibition against providing meals to prospective enrollees at promotional and sales activities from the proposed nominal gifts provision. The nominal gifts provision will be addressed in a separate rule that implements the requirement that new MIPPA rules be in place no later than November 15, 2008.
• Sections 422.2268(j) and 423.2268(j) in the proposed rule have been revised in this final rule to be consistent with each other and with § 423.50(f)(v) published in the April 15, 2008, Policy and Technical Changes to the Medicare Prescription Drug Benefit final rule.
• Sections 422.2268(k) and 423.2268(k) in the proposed rule have been revised in this final rule to be consistent with the language in section 103 of MIPPA.
We are making an organizational change for this section, consistent with our proposal to create a new subpart V of 42 CFR 422 and 423 specific to marketing regulations. We are moving §§ 422.80(e)(2) and 423.50(f)(2), which describe standards of marketing, to §§ 422.2272 and 423.2272, respectively. We are adding §§ 422.2272(c) and 423.2272(c) which require plans to appoint and use only State-licensed representatives to conduct direct marketing activities in accordance with State appointment laws.
We are making an organizational change for this section, consistent with our proposal to create a new subpart V of 42 CFR 422 and 423 specific to marketing regulations. We are moving §§ 422.80(f) to § 422.2276 and adding § 423.2276, which describe requirements for employer group retiree marketing.
We are finalizing our proposal in our May 16, 2008, proposed rule to specify in §§ 422.111(a)(3) and 423.128(a)(3) that plans must disclose the information specified in §§ 422.111(b) and 423.128(b) of the MA and Part D program regulations, respectively, both at the time of enrollment and at least annually thereafter, 15 days before the annual coordinated election period.
Section 553(d) of the APA (5 U.S.C. section 553(d)) ordinarily requires a 30-day delay in the effective date of final rules after the date of their publication in the
In this case, we believe it is in the public interest to implement these provisions upon publication in order to be effective by October 1, 2008, when MA and PDP marketing season begins. Failure to implement these provisions prior to the beginning of the marketing season would hinder CMS's ability to protect its beneficiaries by ensuring that they receive the necessary information to make informed choices during the annual election period. These provisions prevent agents and brokers from engaging in sales and marketing activities that may pressure beneficiaries to make plan choices for reasons other than those that best meet their health care needs. Without this waiver, these provisions would not be effective until January 1, 2009 as specified in MIPPA.
Under the Paperwork Reduction Act of 1995, we are required to provide 30-day notice in the
• The need for the information collection and its usefulness in carrying out the proper functions of our agency.
• The accuracy of our estimate of the information collection burden.
• The quality, utility, and clarity of the information to be collected.
• Recommendations to minimize the information collection burden on the affected public, including automated collection techniques.
We solicited public comment on each of these issues for the following sections of this document that contain information collection requirements:
Section 422.2260 Definitions concerning marketing materials.
Section 422.2260 defines the marketing materials that an MA organization must provide to Medicare beneficiaries. While there is burden associated with this requirement, we believe the burden associated with these requirements is exempt from the requirements of the Paperwork Reduction Act of 1995 (PRA) as defined in 5 CFR 1320.3(b)(2) because the time, effort, and financial resources necessary to comply with the requirement would be incurred by persons in the normal course of their activities.
Section 422.2262 Review and distribution of marketing materials.
Section 422.2262(a)(i) states that at least 45 days before the date of distribution the MA organization submits the material or form to CMS for review under guidelines in Section 422.2264 of this Part.
The burden associated with this is the time and effort put forth by the MA organization to submit the material to CMS for review. We estimate it would take one MA organization 720 minutes/12 hours to comply with this requirement. We estimate 670 MA organizations would be affected annually by this requirement; therefore, the total annual burden associated with this requirement is 8,040 hours. The burden for this requirement is approved under OMB#: 0938–0753.
This section also requires the MA organization to certify that in the case of these certain marketing materials designated by CMS, it followed all applicable marketing guidelines or used model language specified by CMS without modification.
The burden associated with this requirement is the time and effort put forth by the MA organization to provide such certification. While there is burden associated with this requirement, we believe the burden associated with these requirements is exempt from the requirements of the Paperwork Reduction Act of 1995 (PRA).
Section 422.2264 Guidelines for CMS review.
Section 422.2264 states that in reviewing marketing material or election forms under § 422.2262 of this Part, CMS determines that the marketing materials (a) provide, in a format (and, where appropriate, print size), and using standard terminology that may be specified by CMS, the following information to Medicare beneficiaries interested in enrolling:
(1) Adequate written description of rules (including any limitations on the providers from whom services can be obtained), procedures, basic benefits and services, and fees and other charges.
(2) Adequate written description of any supplemental benefits and services.
(3) Adequate written explanation of the grievance and appeals process, including differences between the two, and when it is appropriate to use each.
(4) Any other information necessary to enable beneficiaries to make an informed decision about enrollment.
(b) Notify the general Public of its enrollment period in an appropriate manner, through appropriate media, throughout its service and if applicable, continuation areas.
(c) Includes in the written materials notice that the MA organization is authorized by law to refuse to renew its contract with CMS, that CMS also may refuse to renew the contract, and that termination or non-renewal may result in termination of the beneficiary's enrollment in the plan.
(d) Ensure that materials are not materially inaccurate or misleading or otherwise make material misrepresentations.
(e) For markets with a significant non-English speaking population, provide materials in the language of these individuals.
The burden with these guidelines is the time and effort put forth by the MA organization to provide adequate written descriptions of rules, of any supplemental benefits and services, explanation of the grievance and appeals process, and any other information necessary to enable beneficiaries to make an informed decision about enrollment. It also requires the MA organization to notify the general public of its enrollment period in an appropriate manner and include in the written materials notice that the MA organization is authorized by law to refuse to renew its contract with CMS. While there is burden associated with this requirement, we believe the burden associated with these requirements is exempt from the requirements of the Paperwork Reduction Act of 1995 (PRA) as defined in 5 CFR 1320.3(b)(2) because the time, effort, and financial resources necessary to comply with the requirement would be incurred by persons in the normal course of their activities.
Section 422.2272 Licensing of marketing representatives and confirmation of marketing resources.
Section 422.2272(b) states that an MA organization must establish and maintain a system for confirming that enrolled beneficiaries have, in fact, enrolled in the MA plan and understand the rules applicable under the plan.
The burden associated with this requirement is the time and effort put forth by the MA organization to establish and maintain such a system. While there is burden associated with this requirement, we feel the burden associated with these requirements is exempt from the requirements of the Paperwork Reduction Act of 1995 (PRA) as defined in 5 CFR 1320.3(b)(2) because the time, effort, and financial resources necessary to comply with the requirement would be incurred by persons in the normal course of their activities.
Section 422.2276 Employer group retiree marketing.
Section 422.2276 describes the development of marketing materials for employer group retiree marketing. While there is burden associated with this requirement, we believe the burden associated with these requirements is exempt from the requirements of the Paperwork Reduction Act of 1995 (PRA) as defined in 5 CFR 1320.3(b)(2) because the time, effort, and financial resources necessary to comply with the requirement would be incurred by persons in the normal course of their activities.
Section 423.2260 Definitions concerning marketing materials.
Section 423.2260 defines the marketing materials that a Part D Sponsor must provide to Medicare beneficiaries. While there is burden associated with this requirement, we believe the burden associated with these requirements is exempt from the requirements of the Paperwork Reduction Act of 1995 (PRA) as defined in 5 CFR 1320.3(b)(2) because the time, effort, and financial resources necessary to comply with the requirement would be incurred by persons in the normal course of their activities.
Section 423.2262 Review and distribution of marketing materials.
Section 423.2262(a)(1)(i) requires the Part D sponsor to submit the marketing material or form to CMS for review under the guidelines in § 423.2264.
The burden associated with these requirements is the time and effort put forth by the Part D sponsor to submit the marketing materials to CMS and to provide certification. We estimate it would take one Part D sponsor (720 minutes/12 hours) to comply with this requirement. We estimate 87 Part D sponsors would be affected annually by this requirement; therefore, the total annual burden associated with this requirement is 1044 hours. The burden for this requirement is approved under OMB#: 0938–0964.
Section 423.2264 Guidelines for CMS review.
Section 423.2264 reads that in reviewing marketing material or enrollment forms under § 423.2262, CMS determines (unless otherwise specified in additional guidance) that the marketing materials (a) provide, in a format (and, where appropriate, print size), and using standard terminology that may be specified by CMS, the following information to Medicare beneficiaries interested in enrolling:
(1) Adequate written description of rules (including any limitations on the providers from whom services can be obtained), procedures, basic benefits and services, and fees and other charges.
(2) Adequate written explanation of the grievance and appeals process, including differences between the two, and when it is appropriate to use each.
(3) Any other information necessary to enable beneficiaries to make an informed decision about enrollment.
(b) Notify the general public of its enrollment period in an appropriate manner, through appropriate media, throughout its service area.
(c) Include in the written materials notice that the Part D plan is authorized by law to refuse to renew its contract with CMS, that CMS also may refuse to renew the contract, and that termination or non-renewal may result in termination of the beneficiary's enrollment in the Part D plan. In addition, the Part D plan may reduce its service area and no longer be offered in the area where a beneficiary resides.
(d) Ensure that materials are not materially inaccurate or misleading or otherwise make material misrepresentations.
(e) For markets with a significant non-English speaking population, provide materials in the language of these individuals.
The burden with these guidelines is the time and effort put forth by the Part D plan to provide adequate written descriptions of rules, of the grievance and appeals process, and any other information necessary to enable beneficiaries to make an informed decision about enrollment. It also requires the Part D plan to notify the general public of its enrollment period in an appropriate manner and include in the written materials notice that the Part D plan is authorized by law to refuse to renew its contract with CMS. While there is burden associated with this requirement, we believe the burden associated with these requirements is exempt from the requirements of the Paperwork Reduction Act of 1995 (PRA) as defined in 5 CFR 1320.3(b)(2) because the time, effort, and financial resources necessary to comply with the requirement would be incurred by persons in the normal course of their activities.
Section 423.2272 Licensing of marketing representatives and confirmation of marketing resources.
Section 423.2272(b) requires the Part D organization to establish and maintain a system for confirming that enrolled beneficiaries have in fact enrolled in the PDP and understand the rules applicable under the plan.
The burden associated with this requirement is the time and effort put forth by the Part D sponsor to establish and maintain such a system. While there is burden associated with this requirement, we believe the burden associated with these requirements is exempt from the requirements of the Paperwork Reduction Act of 1995 (PRA) as defined in 5 CFR 1320.3(b)(2) because the time, effort, and financial resources necessary to comply with the requirement would be incurred by persons in the normal course of their activities.
Section 423.2276 Employer group retiree marketing.
Section 423.2276 describes the development of marketing materials for employer group retiree marketing. While there is burden associated with this requirement, we believe the burden associated with these requirements is exempt from the requirements of the Paperwork Reduction Act of 1995 (PRA) as defined in 5 CFR 1320.3(b)(2) because the time, effort, and financial resources necessary to comply with the requirement would be incurred by persons in the normal course of their activities.
As reflected in the table that follows, the aggregate burden associated with the collection of information section of this final rule totals 9,084 hours.
We have submitted a copy of this final rule to OMB for its review of the information collection requirements described above.
We have examined the impact of this rule as required by Executive Order 12866 (September 1993, Regulatory Planning and Review), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96–354), section 1102(b) of the Social Security Act, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104–4), Executive Order 13132 on Federalism, and the Congressional Review Act (5 U.S.C. 804(2)).
Executive Order 12866 (as amended) directs agencies to assess all costs and
We use the figure of $14.68 (based on the United States Department of Labor (DOL) (
• Submission of marketing materials, MA program ($21.73 × 8,040 hours = $174,709).
• Submission of marketing materials, Part D program ($21.73 × 1,044 hours = $22,686).
The RFA requires agencies to analyze options for regulatory relief of small businesses, if a rule has a significant impact on a substantial number of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. Most hospitals and most other providers and suppliers are small entities, either by nonprofit status or by having revenues of $6.5 million to $31.5 million in any 1 year. Individuals and States are not included in the definition of a small entity. MA organizations and Part D sponsors, the only entities that will be affected by the final provisions, are not generally considered small business entities. Since they must follow minimum enrollment requirements (5,000 enrollees in urban areas and 1,500 enrollees in non-urban areas), the revenue generated from enrollment generally exceeds the revenue threshold required for analysis. While a very small rural plan could fall below the threshold, we do not believe that there are more than a handful of such plans.
A fraction of MA organizations and sponsors are considered small businesses because of their non-profit status. For an RFA analysis to be required, 3–5 percent of the identified small entities' revenue would have to be impacted by the final provisions. We do not believe that any of these provisions meet this threshold. Many of the provisions, discussed in section II, Analysis of and Response to Public Comments, are clarifications of existing policy or require minimal costs. Therefore, because the rule will not have a significant economic impact on a substantial number of small entities, we are not preparing an analysis for the RFA.
In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a Metropolitan Statistical Area and has fewer than 100 beds. We are not preparing an analysis for section 1102(b) of the Act because we have determined that this rule will not have a significant impact on the operations of a substantial number of small rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year by State, local or tribal governments, in the aggregate, or by the private sector of $100 million in 1995 dollars, updated annually for inflation. That threshold level is currently approximately $130 million. This rule will have no consequential effect on State, local, or tribal governments or on the private sector.
Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications. This rule will not have a substantial direct effect on State or local governments, preempt States, or otherwise have a Federalism implication.
In accordance with the provisions of Executive Order 12866, this regulation was reviewed by the Office of Management and Budget.
Administrative practice and procedure, Health facilities, Health maintenance organizations (HMO), Medicare, Penalties, Privacy, Reporting and recordkeeping requirements.
Administrative practice and procedure, Emergency medical services, Health facilities, Health maintenance organizations (HMO), Medicare, Penalties, Privacy, Reporting and recordkeeping.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
(a) * * *
(3) At the time of enrollment and at least annually thereafter, 15 days before the annual coordinated election period.
As used in this subpart—
(1) Promote the MA organization, or any MA plan offered by the MA organization.
(2) Inform Medicare beneficiaries that they may enroll, or remain enrolled in, an MA plan offered by the MA organization.
(3) Explain the benefits of enrollment in an MA plan, or rules that apply to enrollees.
(4) Explain how Medicare services are covered under an MA plan, including conditions that apply to such coverage.
(5) May include, but are not limited to, the following:
(i) General audience materials such as general circulation brochures, newspapers, magazines, television, radio, billboards, yellow pages, or the Internet.
(ii) Marketing representative materials such as scripts or outlines for telemarketing or other presentations.
(iii) Presentation materials such as slides and charts.
(iv) Promotional materials such as brochures or leaflets, including materials for circulation by third parties (for example, physicians or other providers).
(v) Membership communication materials such as membership rules, subscriber agreements, member handbooks and wallet card instructions to enrollees.
(vi) Letters to members about contractual changes; changes in providers, premiums, benefits, plan procedures etc.
(vii) Membership or claims processing activities (for example, materials on rules involving non-payment of premiums, confirmation of enrollment or disenrollment, or annual notification information).
(a)
(i) At least 45 days (or 10 days if using marketing materials that use, without modification, proposed model language as specified by CMS) before the date of distribution the MA organization has submitted the material or form to CMS for review under the guidelines in § 422.2264 of this Part; and
(ii) CMS does not disapprove the distribution of new material or form.
(2) [Reserved]
(b)
In reviewing marketing material or election forms under § 422.2262 of this part, CMS determines that the marketing materials—
(a) Provide, in a format (and, where appropriate, print size), and using standard terminology that may be specified by CMS, the following information to Medicare beneficiaries interested in enrolling:
(1) Adequate written description of rules (including any limitations on the providers from whom services can be obtained), procedures, basic benefits and services, and fees and other charges;
(2) Adequate written description of any supplemental benefits and services;
(3) Adequate written explanation of the grievance and appeals process, including differences between the two, and when it is appropriate to use each; and
(4) Any other information necessary to enable beneficiaries to make an informed decision about enrollment.
(b) Notify the general public of its enrollment period in an appropriate manner, through appropriate media, throughout its service area and if applicable, continuation areas.
(c) Include in written materials notice that the MA organization is authorized by law to refuse to renew its contract with CMS, that CMS also may refuse to renew the contract, and that termination or non-renewal may result in termination of the beneficiary's enrollment in the plan.
(d) Ensure that materials are not materially inaccurate or misleading or otherwise make material misrepresentations.
(e) For markets with a significant non-English speaking population, provide materials in the language of these individuals.
If CMS has not disapproved the distribution of marketing materials or forms submitted by an MA organization with respect to an MA plan in an area, CMS is deemed not to have disapproved the distribution in all other areas covered by the MA plan and organization except with regard to any portion of the material or form that is specific to the particular area.
In conducting marketing activities, MA organizations may not—
(a) Provide cash or other monetary rebates as an inducement for enrollment or otherwise.
(b) [Reserved]
(c) Engage in any discriminatory activity such as, for example, attempts to recruit Medicare beneficiaries from higher income areas without making comparable efforts to enroll Medicare beneficiaries from lower income areas.
(d) Solicit door-to-door for Medicare beneficiaries or through other unsolicited means of direct contact, including calling a beneficiary without the beneficiary initiating the contact.
(e) Engage in activities that could mislead or confuse Medicare beneficiaries, or misrepresent the MA organization. The MA organization may not claim it is recommended or endorsed by CMS or Medicare or that CMS or Medicare recommends that the beneficiary enroll in the MA plan. It may, however, explain that the organization is approved for participation in Medicare.
(f) Market non-health care related products to prospective enrollees during any MA or Part D sales activity or presentation. This is considered cross-selling and is prohibited.
(g) [Reserved]
(h) [Reserved]
(i) Distribute marketing materials for which, before expiration of the 45-day period, the MA organization receives from CMS written notice of disapproval because it is inaccurate or misleading, or misrepresents the MA organization, its marketing representatives, or CMS.
(j) Use providers or provider groups to distribute printed information comparing the benefits of different health plans unless the providers, provider groups, or pharmacies accept and display materials from all health plans with which the providers, provider groups, or pharmacies contract. The use of publicly available comparison information is permitted if approved by CMS in accordance with the Medicare marketing guidance.
(k) Conduct sales presentations or distribute and accept MA plan
(l) Conduct sales presentations or distribute and accept plan applications at educational events.
(m) Employ MA plan names that suggest that a plan is not available to all Medicare beneficiaries. This prohibition shall not apply to MA plan names in effect on July 31, 2000.
(n) [Reserved]
(o) Engage in any other marketing activity prohibited by CMS in its marketing guidance.
(p) Provide meals for potential enrollees, which is prohibited, regardless of value.
(q) [Reserved]
In its marketing, the MA organization must:
(a) Demonstrate to CMS' satisfaction that marketing resources are allocated to marketing to the disabled Medicare population as well as beneficiaries age 65 and over.
(b) Establish and maintain a system for confirming that enrolled beneficiaries have, in fact, enrolled in the MA plan, and understand the rules applicable under the plan.
(c) Employ as marketing representatives only individuals who are licensed by the State to conduct marketing activities (as defined in the Medicare Marketing Guidelines) in that State, and whom the organization has informed that State it has appointed, consistent with the appointment process provided for under State law.
MA organizations may develop marketing materials designed for members of an employer group who are eligible for employer-sponsored benefits through the MA organization, and furnish these materials only to the group members. These materials are not subject to CMS prior review and approval.
Secs. 1102, 1860D–1 through 1860D–42, and 1871 of the Social Security Act (42 U.S.C. 1302, 1395w–101 through 1395w–152, and 1395hh).
(a) * * *
(3) At the time of enrollment and at least annually thereafter, 15 days before the annual coordinated election period.
As used in this subpart—
(1) Promote the Part D plan.
(2) Inform Medicare beneficiaries that they may enroll, or remain enrolled in a Part D plan.
(3) Explain the benefits of enrollment in a Part D plan, or rules that apply to enrollees.
(4) Explain how Medicare services are covered under a Part D plan, including conditions that apply to such coverage.
(5) May include, but are not limited to—
(i) General audience materials such as general circulation brochures, newspapers, magazines, television, radio, billboards, yellow pages, or the Internet.
(ii) Marketing representative materials such as scripts or outlines for telemarketing or other presentations.
(iii) Presentation materials such as slides and charts.
(iv) Promotional materials such as brochures or leaflets, including materials for circulation by third parties (for example, physicians or other providers).
(v) Membership communication materials such as membership rules, subscriber agreements, member handbooks and wallet card instructions to enrollees.
(vi) Letters to members about contractual changes; changes in providers, premiums, benefits, plan procedures etc.
(vii) Membership or claims processing activities.
(a)
(i) At least 45 days (or 10 days if using certain types of marketing materials that use, without modification, proposed model language as specified by CMS) before the date of distribution, the Part D sponsor submits the material or form to CMS for review under the guidelines in § 423.2264; and
(ii) CMS does not disapprove the distribution of new material or form.
(2) [Reserved]
(b)
In reviewing marketing material or enrollment forms under § 423.2262, CMS determines (unless otherwise specified in additional guidance) that the marketing materials—
(a) Provide, in a format (and, where appropriate, print size), and using standard terminology that may be specified by CMS, the following information to Medicare beneficiaries interested in enrolling:
(1) Adequate written description of rules (including any limitations on the providers from whom services can be obtained), procedures, basic benefits and services, and fees and other charges;
(2) Adequate written explanation of the grievance and appeals process, including differences between the two, and when it is appropriate to use each; and
(3) Any other information necessary to enable beneficiaries to make an informed decision about enrollment.
(b) Notify the general public of its enrollment period in an appropriate manner, through appropriate media, throughout its service area.
(c) Include in the written materials notice that the Part D plan is authorized by law to refuse to renew its contract with CMS, that CMS also may refuse to renew the contract, and that termination or non-renewal may result in termination of the beneficiary's enrollment in the Part D plan. In addition, the Part D plan may reduce its service area and no longer be offered in the area where a beneficiary resides.
(d) Ensure that materials are not materially inaccurate or misleading or otherwise make material misrepresentations.
(e) For markets with a significant non-English speaking population, provide materials in the language of these individuals.
If CMS has not disapproved the distribution of marketing materials or forms submitted by a Part D sponsor for a Part D plan in a Part D region, CMS is deemed to not have disapproved the distribution of the marketing material or form in all other Part D regions covered by the Part D plan, with the exception of any portion of the material or form that is specific to the Part D region.
In conducting marketing activities, a Part D plan may not—
(a) Provide cash or other remuneration as an inducement for enrollment or otherwise.
(b) [Reserved]
(c) Engage in any discriminatory activity such as, for example, attempts to recruit Medicare beneficiaries from higher income areas without making comparable efforts to enroll Medicare beneficiaries from lower income areas.
(d) Solicit door-to-door for Medicare beneficiaries or through other unsolicited means of direct contact, including calling a beneficiary without the beneficiary initiating the contact.
(e) Engage in activities that could mislead or confuse Medicare beneficiaries, or misrepresent the Part D sponsor or its Part D plan. The Part D organization may not claim that it is recommended or endorsed by CMS or Medicare or that CMS or Medicare recommends that the beneficiary enroll in the Part D plan. The Part D organization may explain that the organization is approved for participation in Medicare.
(f) Market non-health care related products to prospective enrollees during any MA or Part D sales activity or presentation. This is considered cross-selling and is prohibited.
(g) [Reserved]
(h) [Reserved]
(i) Distribute marketing materials for which, before expiration of the 45-day period, the PDP Sponsor receives from CMS written notice of disapproval because it is inaccurate or misleading, or misrepresents the PDP Sponsor, its marketing representatives, or CMS.
(j) Use providers, provider groups, or pharmacies to distribute printed information for beneficiaries to use when comparing the benefits of different Part D plans unless providers, provider groups or pharmacies accept and display materials from all Part D plan sponsors with which the providers, provider groups or pharmacies contract. The use of publicly available comparison information is permitted if approved by CMS in accordance with the Medicare marketing guidelines.
(k) Conduct sales presentations or distribute and accept Part D plan enrollment forms in provider offices, pharmacies or other areas where health care is delivered to individuals, except in the case where such activities are conducted in common areas in health care settings.
(l) Conduct sales presentations or distribute and accept plan applications at educational events.
(m) Employ Part D plan names that suggest that a plan is not available to all Medicare beneficiaries.
(n) [Reserved]
(o) Engage in any other marketing activity prohibited by CMS in its marketing guidance.
(p) Provide meals for potential enrollees, which are prohibited, regardless of value.
(q) [Reserved]
In its marketing, the Part D organization must—
(a) Demonstrate to CMS's satisfaction that marketing resources are allocated to marketing to the disabled Medicare population as well as beneficiaries age 65 and over.
(b) Establish and maintain a system for confirming that enrolled beneficiaries have in fact enrolled in the PDP and understand the rules applicable under the plan.
(c) Employ as marketing representatives only individuals who are licensed by the State to conduct direct marketing activities (as defined in the Medicare Marketing Guidelines) in that State, and whom the sponsor has informed that State it has appointed, consistent with the appointment process provided for under State law.
Part D sponsors may develop marketing materials designed for members of an employer group who are eligible for employer-sponsored benefits through the Part D sponsor, and furnish these materials only to the group members. These materials are not subject to CMS prior review and approval.
(Catalog of Federal Domestic Assistance Program No. 93.778, Medical Assistance Program)