CMS Goes After ‘Predatory’ MA Prior Authorization & Marketing

WASHINGTON—On Monday, Nov. 6, the Biden-Harris Administration proposed steps to fix Medicare Advantage’s (MA) use of prior authorization as well as curb predatory marketing within MA plans.

The Centers for Medicare & Medicaid Services’ (CMS’) proposed rule will help people with Medicare select and enroll in coverage options that best meet their healthcare needs by preventing plans from engaging in anti-competitive steering of prospective enrollees based on excessive compensation to agents and brokers, rather than the enrollee’s best interests. The proposed guardrails are said to protect people with Medicare and promote a competitive marketplace in Medicare Advantage, consistent with the goals of President Joe Biden’s Executive Order on Promoting Competition in the American Economy. 

Additionally, the proposed rule would improve transparency on the effects of prior authorization on underserved communities and proposes more flexibility for Part D plans to more quickly substitute lower cost biosimilar biological products for their reference products.

This proposal comes after years of concern surrounding potential barriers to care access resulting from Medicare Advantage plans’ use of prior authorization (PA).

“The Biden-Harris Administration remains committed to making healthcare more affordable and accessible for all Americans,” said U.S. Department of Health and Human Services Secretary Xavier Becerra. “By ensuring Medicare recipients have the information they need to make critical decisions about their health care coverage, we are doing just that. Promoting competition in the marketplace helps to lower costs and protect access to care while making the whole process more transparent and accountable.”

“CMS continues to improve the Medicare Advantage and Part D prescription drug programs and maintain high-quality health care coverage choices for all Medicare enrollees,” said CMS Administrator Chiquita Brooks-LaSure. “People with Medicare deserve to have accurate and unbiased information when they make important decisions about their health coverage. Today’s proposals further our efforts to curb predatory marketing and inappropriate steering that distorts healthy competition among plans.” 

CMS has previously taken unprecedented steps to address predatory marketing of Medicare Advantage plans, such as banning misleading TV ads. Many people on Medicare rely on agents and brokers to help navigate Medicare choices. CMS is concerned that some Medicare Advantage plans are compensating agents and brokers in a way that may circumvent existing payment rules, inappropriately steer individuals to enroll in plans that do not best meet their healthcare needs, and lead to further consolidation in the Medicare Advantage market. To further protect people with Medicare through stronger marketing policies and to promote a competitive marketplace in Medicare Advantage, CMS is proposing added guardrails to plan compensation for agents and brokers, including standardization. These proposals are consistent with the statutory requirement that CMS develop guidelines to ensure that the use of compensation creates incentives for agents and brokers to enroll individuals in the Medicare Advantage plan that is intended to best meet their healthcare needs. 

Additionally, CMS is concerned that certain prior authorization policies may disproportionately inhibit access to needed care for underserved enrollees. To provide additional safeguards, CMS is proposing to require that Medicare Advantage plans include an expert in health equity on their utilization management committees and that the committees conduct an annual health equity analysis of the plans’ prior authorization policies and procedures. This analysis would examine the impact of prior authorization on enrollees with one or more of the following social risk factors—eligibility for Part D low-income subsidies, dual eligibility for Medicare and Medicaid or having a disability—compared to enrollees without these risk factors. These analyses would have to be posted publicly to improve transparency into the effects of prior authorization on underserved populations. To further promote health equity, CMS is also proposing to streamline enrollment options for individuals with both Medicare and Medicaid, providing more opportunities for integrated care. 

There will be a 60-day comment period for the notice of proposed rulemaking, and comments must be submitted at one of the addresses provided in the Federal Register no later than Jan. 5, 2024. The proposed rule can be accessed at the Federal Register here. 

View a fact sheet on the proposed rule at cms.gov/newsroom.

View the CMS Blog Important New Changes to Improve Access to Behavioral Health in Medicare at cms.gov/blog.