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The Centers for Medicare and Medicaid Services (CMS) has issued final 2009 Medicare marketing guidelines effective August 7. The guidelines dictate how Medicare Advantage Organizations and Medicare Part D Plan Sponsors (among other entities) are permitted to market their products, and reflect CMS' "current interpretation of the marketing requirements and related provisions of the Medicare Advantage Organization (MAO) and Medicare Prescription Drug Plan (PDP) rules." The final Marketing Guidelines also address regulatory requirements and other policy clarifications that CMS has implemented since the Marketing Guidelines were last revised in 2006. CMS noted that they received a total of 1,730 comments on the draft Marketing Guidelines issued in May 2009, from 94 entities including MAOs, PDP sponsors, consumer advocacy groups, pharmacy associations, health plan associations, and State Departments of Health. After careful analysis of all comments received, CMS made a number of important revisions and clarifications from draft to final.

The Medicare Marketing Guidelines include both new provisions as well as clarifications on existing CMS policies relating to marketing. The final Medicare Advantage Marketing Guidelines clarify a number of important areas that were unclear in the draft Marketing Guidelines issued for public comment, including:

Plan Names. Standardization of plan name types in marketing materials. Plan sponsors must include the plan type in each Plan's name using standard terminology developed by CMS. In addition to standardizing the terminology in plan name types, organizations must display the Plan type on all marketing materials that include the plan name at the end of the plan name. The Marketing Guide includes several exceptions to the Plan name requirements. (Section 40.16)

Summary of Benefits Requirements for Special Needs Plans. Effective January 1, 1010, Dual Eligible Special Needs Plans ("SNP's") must provide each prospective enrollee prior to enrollment with a comprehensive written statement that describes the benefits that the individual is entitled to under Title XIX (Medicaid); the cost-sharing protections individuals are entitled to under Title XIX; and which of those benefits and cost sharing protections are covered under the SNP for dual eligible individuals (section 60.1).

Agent/Broker Training and Testing Requirement Clarification. Plan sponsors must ensure annually that brokers and agents selling Medicare products are trained on Medicare rules and regulations and on details specific to the plan products being sold by the brokers and agents, and plan sponsors must also ensure that brokers and agents selling Medicare products are trained and tested annually on their knowledge of Medicare rules and regulations, as well as on details of the plan products being sold. To the extent that CMS provides training and testing for agents and brokers, CMS certification will not confer any special advantage to the agents and brokers who participate. Agent and broker use of this certification as a marketing tool will be prohibited. In order to sell Medicare products, a broker or agent should receive a passing score of at least 85 percent on the test. Tests may be in the form of a written test or computerized. Plan sponsors must ensure that their training and testing programs are designed and implemented in a way that the integrity of the training and testing is maintained. In doing so, they must have a process for handling instances in which agents do not pass the test on the first try. Plan sponsors should document that each agent/broker has been trained and have the ability to provide this information to CMS upon request. (Section 120.3).

Employed Agent Exemption from Agent/Broker Compensation Requirements. CMS has claried that the agent/broker compensation requirements do not apply to employed agents. (section 120.5.4).

Use of the Medicare Mark by Part D Plans. The final Marketing Guidelines include language on the process to obtain authorization for the use of the Medicare mark by organizations that offer Part D plans. The guidance was included in the previous version of the Guidelines but was inadvertently omitted from the draft Guidelines. Since these requirements are still current, CMS re-integrated the language in the final Guidelines (section 150).

Requirements for Plan Sponsors Regarding Marketing/Sales Events. The final Marketing Guidelines add new requirements for plan sponsors regarding marketing/sales events, including activities that can and cannot be conducted in formal or informal settings, and activities that can and cannot take place in common areas of health care settings. There are two main types of marketing/sales events - formal and informal. Plan Sponsors must upload all marketing/sales events in HPMS before the events take place. All sales events are open to the general public and to all Medicare beneficiaries. Formal marketing/sales events are typically structured in an audience/presenter style with a sales person or plan representative formally providing specific plan sponsor information via a presentation on the products being offered. In this setting, the presenter usually presents to an audience that was previously invited to attend. The audience can be comprised of current members and prospective members, as well those attending on behalf of a Medicare beneficiary. At some time during a typical marketing/sales event information may be handed out, including enrollment applications. Enrollment applications may also be collected at such events. Presenters must announce all products that will be covered during any formal presentation at the beginning of that presentation. Informal marketing/sales events depend less on a structured presentation to an audience. Instead, they typically utilize a table or kiosk manned by a plan sponsor sales person who can discuss the merits of the plan's products when approached by a Medicare beneficiary or someone on a Medicare beneficiary's behalf. The final Marketing Guidelines include further guidance on the do's and don'ts of formal and informal plan marketing events. (Section 70.9)

Plan sponsors may not conduct sales activities in health care settings except in common areas. Common areas where marketing activities are allowed include areas such as hospital or nursing home cafeterias, community or recreational rooms, and conference rooms. If a pharmacy counter area is located within a retail store, common areas would include the space outside of where patients wait for services or interact with pharmacy providers and obtain medications. Plan sponsors are prohibited from conducting sales presentations, distributing and accepting enrollment applications, and soliciting Medicare beneficiaries in areas where patients primarily intend to receive health care services. These restricted areas generally include, but are not limited to, waiting rooms, exam rooms, hospital patient rooms, dialysis center treatment areas (where patients interact with their clinical team and receive treatment), and pharmacy counter areas (where patients interact with pharmacy providers and obtain medications). (Section 70.9.2).

Requirements for Plan Sponsors Whose Legal or Marketing Names Include the Names of Network Providers. The final Marketing Guidelines add new requirements for plan sponsors whose legal or marketing names include the names of network providers, or whose downstream entities' legal or marketing names include the names of network providers. Plan sponsors whose legal or marketing names include the names of network providers, or whose downstream entities' legal or marketing names include the names of network providers, are required to include the following language below all names and/or logos of network providers on all of their marketing materials:

"Other <Pharmacies|Physicians|Providers> are Available in Our Network."

The plan sponsor, its downstream entities, and its network providers, whether through marketing materials or other communications, may not imply that the network provider is endorsed by CMS, or that their products or services are Medicare-approved. (Section 30.3).

Plan Sponsor Rules for Plan Rating and Information. The final Marketing Guidelines add a new requirement for plan sponsors to provide information about their plan or plans' ratings information on www.medicare.gov in their pre-enrollment packets, as well as their Summary of Benefits and ANOC/EOC. Sponsors will be required, in their Summary of Benefits and ANOC/EOC documents, to refer current and prospective enrollees to their plan ratings information on www.medicare.gov or to their customer service line to obtain a copy of their plan's (or plans') ratings information. CMS will provide additional guidance on this issue in subsequent guidance (Sections 30.14 and 30.9.1).

Plan Sponsor Disclosures to Beneficiaries. The final Marketing Guidelines clarify that plan sponsors must disclose to beneficiaries, upon request, whether their primary care provider or pharmacy is available in the plan's network. (Section 80.1.3).

Model Documents. CMS has also provided optional model language for certain beneficiary informational documents, which, when used without modification, entitles the MAO to a shorter review period or to submit under File & Use as outlined in Section §90.6.1. MAOs that choose to create their own documents must be sure to include all information that is in the model document and not include any supplemental language which would require further review.

Conclusion. The consequences for violating any of the new marketing rules are substantial, as CMS can levy penalties of up to $25,000 for each enrollee affected, or likely to be affected, by any violation. Our firm has assisted numerous health care organizations with the development, implementation and operation of Medicare Advantage Organization marketing policies and procedures, and defended clients subject to CMS audits and investigations. If you have any questions about the final Medicare Marketing Guidelines please contact Michael Dowell at mdowell@tocounsel.com or the lawyer in the firm who generally handles your health care legal matters.