Medicare Keeps Bad Marketer Penalty Out of 2023 Rules

“We appreciate that with this final rate notice, the administration continues to support innovation and flexibility in Medicare Advantage, to improve affordability, access, and value for enrollees and taxpayers,” Eyles said.

But Eyles noted that CMS is drafting regulations that could affect 2023 Medicare plan rules, such as prescription pricing rules.

“We urge CMS to swiftly re-evaluate the substance and timing of these proposals, as 2023 Medicare Advantage plan designs are being finalized now in advance of the June 6 deadline,” Eyles said.

The Bad Marketing Penalty

CMS has developed a 5-star quality rating program for Medicare plan issuers, and it ties federal payment levels to plans’ star ratings.

The agency already imposes a star-rating penalty when consumer complaints about marketing problems could lead to actions, such as coverage changes, in the future.

The agency has proposed a second penalty for marketing complaints that lead to retroactive cancellations of coverage and other retroactive actions.

In the draft notice, officials suggested that the extra bad marketing penalty could have reduced the 2021 star ratings of Medicare Advantage issuers that offered prescription drug coverage by an average of 24%.

Most commenters opposed the addition of the new bad marketing penalty, according to CMS officials’ summary of the comments.

“Some commenters raised concerns about the nature of these complaints, suggested that all of these complaints should not be attributed to the plans, and noted that low enrollment plans may be disproportionately impacted,” officials said. “Other commenters supported this update to hold sponsors accountable for complaints resulting from marketing misrepresentation.”

Officials said that they would have to go through a formal rulemaking process to add the extra bad marketing penalty. They did not say whether or not they would propose the addition of the penalty.

What It Means

Medicare plan marketing rules could still end up being relatively stable in 2023, and the supply of plans could be strong, in spite of reports that some issuers thought overly aggressive competitors might be underpricing coverage.

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