Biden administration finalizes rule to target ‘misleading’ Medicare Advantage ads

By Jacqueline Howard, CNN

US health officials have issued a final rule that not only makes some changes to Medicare — including expanding access to behavioral health care and clarifying criteria guidelines — it cracks down on “misleading” advertisements.

On Wednesday, the US Department of Health and Human Services, through the Centers for Medicare and Medicaid Services, finalized the rule that, among other things, prohibits advertisements that do not mention a specific plan name and use Medicare logos or language in a way that could mislead and confuse enrollees into believing that the ads come from the government.

The measures are the latest in the Biden administration’s efforts to rein in Medicare Advantage plans, which have been soaring in popularity. About half of Medicare participants are enrolled in these plans, which are run by insurers that contract with the federal government.

According to CMS, the “proliferation of certain television advertisements” promoting enrollment in Medicare Advantage plans — which are offered by Medicare-approved private companies — has been concerning.

“Today, we’re announcing a rule that will crack down on misleading marketing schemes by the health insurance companies that offer Medicare Advantage plans, those that offer Part D prescription drug plans and their downstream entities. Among other provisions, the rule would prohibit overly general ads about the Medicare Advantage program that often tends to confuse and mislead those individuals who are eligible to apply for some of these insurance plans,” HHS Secretary Xavier Becerra said Wednesday.

In general, about 65 million Americans are within the Medicare program, according to Becerra.

“Any marketing that does not specifically name a health plan, that misrepresents what a plan might offer within these commercials, is something that would now be prohibited,” he said. “That’s going to be important because the confusion that often arises, and the changes that some enrollees often will make to their detriment in getting health care, are things that we want to try to avoid.”

Last year, the Senate Finance Committee released a report highlighting an increase in such deceptive marketing practices that target seniors with Medicare Advantage plans and recommending that CMS take action to reduce the prevalence of such marketing tactics.

“We’ve heard from many seniors and people with disabilities about misleading and confusing advertising for Medicare Advantage and Part D plans. Today’s final rule includes changes to protect people exploring Medicare Advantage and Part D coverage from confusing and potentially misleading marketing practices,” Dr. Meena Seshamani, CMS deputy administrator and director of the Center for Medicare, said Wednesday. “We are finalizing 21 marketing provisions to protect beneficiaries.”

Beyond marketing requirements, the final rule clarifies criteria guidelines to help ensure that people with Medicare Advantage receive access to the same “medically necessary” care they would receive with traditional Medicare.

The rule also expands the list of populations to which Medicare Advantage organizations must provide “culturally competent” services, such as people with limited English proficiency or those in the LGBTQ community. Additionally, the rule requires that a prior authorization approval for care remain valid for as long as “medically necessary” to avoid disruptions in care for beneficiaries.

“We are also finalizing new minimum wait time standards for behavioral health,” Seshamani said, as well as requiring that most types of Medicare Advantage plans include behavioral health services.

The American Hospital Association said in a statement Wednesday that it applauds the increased attention on Advantage plans.

“Hospitals and health systems have raised the alarm that beneficiaries enrolled in some Medicare Advantage plans are routinely experiencing inappropriate delays and denials for coverage of medically necessary care,” said Ashley Thompson, the group’s senior vice president for public policy analysis and development. “This rule will go a long way in protecting patients and ensuring timely access to care, as well as reducing inappropriate administrative burden on an already strained health care workforce.”

Protecting and strengthening Medicare is one of the administration’s top priorities, CMS Administrator Chiquita Brooks-LaSure said in a news release Wednesday. “With this final rule, CMS is putting in place new safeguards that make it easier for people with Medicare to access the benefits and services they are entitled to, while also strengthening the Medicare Advantage and Part D programs.”

On Friday, CMS issued controversial final payment policies for 2024 that seek to limit overbilling by Medicare Advantage plans. The changes include updating the risk adjustment model to better ensure that payments are in line with patients’ medical conditions and that insurers don’t add diagnoses to inflate their billing.

Insurers protested the proposed rule vehemently, leading CMS to phase in the changes over three years, instead of one.

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CNN’s Tami Luhby contributed to this report.