The definitions in this section apply for this subpart unless the context indicates otherwise.

Advertisement (Ad) means a read, written, visual, oral, watched, or heard bid for, or call to attention. Advertisements can be considered communication or marketing based on the intent and content of the message.

Alternate format means used to convey information to individuals with visual, speech, physical, hearing, and intellectual disabilities (for example, braille, large print, audio).

Banner means a type of advertisement feature typically used in television ads that is intended to be brief, and flashes limited information across a screen for the sole purpose of enticing a prospective enrollee to contact the Part D sponsor (for example, obtain more information) or to alert the viewer that information is forthcoming.

Banner-like advertisement is an advertisement that uses a banner-like feature, that is typically found in some media other than television (for example, outdoors and on the internet).

Communications means activities and use of materials created or administered by the Part D sponsor or any downstream entity to provide information to current and prospective enrollees. Marketing is a subset of communications.

Marketing means communications materials and activities that meet both the following standards for intent and content:

(1) Intended, as determined under paragraph (1)(ii) of this definition, to do any of the following:

(i)(A) Draw a beneficiary's attention to a Part D plan or plans.

(B) Influence a beneficiary's decision making process when making a Part D plan selection.

(C) Influence a beneficiary's decision to stay enrolled in a Part D plan (that is, retention-based marketing).

(ii) In evaluating the intent of an activity or material, CMS will consider objective information including, but not limited to, the audience of the activity or material, other information communicated by the activity or material, timing, and other context of the activity or material and is not limited to the Part D sponsor's stated intent.

(2) Include or address content regarding any of the following:

(i) The plan's benefits, benefits structure, premiums or cost sharing.

(ii) Measuring or ranking standards (for example, Star Ratings or plan comparisons).

Outdoor advertising (ODA) means outdoor material intended to capture the attention of a passing audience (for example, billboards, signs attached to transportation vehicles). ODA may be a communication or marketing material.

Third-party marketing organization (TPMO) are organizations and individuals, including independent agents and brokers, who are compensated to perform lead generation, marketing, sales, and enrollment related functions as a part of the chain of enrollment (the steps taken by a beneficiary from becoming aware of a Part D plan or plans to making an enrollment decision). TPMOs may be a first tier, downstream or related entity (FDRs), as defined under § 423.4, but may also be entities that are not FDRs but provide services to a Part D sponsor or a Part D sponsor's FDR.

(a) General requirements. Part D sponsors must submit all marketing materials, all election forms, and certain designated communications materials for CMS review.

(1) The Health Plan Management System (HPMS) Marketing Module is the primary system of record for the collection, review, and storage of materials that must be submitted for review.

(2) Materials must be submitted to the HPMS Marketing Module by the Part D sponsor or, where materials have been developed by a Third Party Marketing Organization for multiple Part D sponsors or plans, by a Third Party Marketing Organization with prior review of each Part D sponsor on whose behalf the materials were created or will be used.

(b) CMS review of marketing materials and election forms. Part D sponsors may not distribute or otherwise make available any marketing materials or election forms unless one of the following occurs:

(1) CMS has reviewed and approved the material.

(2) The material has been deemed approved; that is, CMS has not rendered a disposition for the material within 45 days (or 10 days if using CMS model or standardized marketing materials as outlined in § 422.2267(e) of this chapter) of submission to CMS.

(3) The material has been accepted under File and Use, as follows:

(i) The Part D sponsor may distribute certain types of marketing materials, designated by CMS based on the material's content, audience, and intended use, as they apply to potential risk to the beneficiary, 5 days following the submission.

(ii) The Part D sponsor must certify that the material meets all applicable CMS communications and marketing requirements in §§ 423.2260 through 423.2267.

(c) CMS review of non-marketing communications materials. CMS does not require submission, or submission and approval, of communications materials prior to use, other than the following exceptions.

(1) Certain designated communications materials that are critical to beneficiaries understanding or accessing their benefits (for example, the Evidence of Coverage (EOC).

(2) Communications materials that, based on feedback such as complaints or data gathered through reviews, warrant additional oversight as determined by CMS, to ensure the information being received by beneficiaries is accurate.

(d) Standards for CMS review. CMS reviews materials to ensure the following:

(1) Compliance with all applicable requirements under §§ 423.2260 through 423.2267.

(2) Benefit and cost information is an accurate reflection of what is contained in the Part D sponsor's bid.

(3) CMS may determine, upon review of such materials, that the materials must be modified, or may no longer be used.

Part D sponsors may not mislead, confuse, or provide materially inaccurate information to current or potential enrollees.

(a) General rules. Part D sponsors must ensure their statements and the terminology used in communications activities and materials adhere to the following requirements:

(1) Part D sponsors may not do any of the following:

(i) Provide information that is inaccurate or misleading.

(ii) Use of superlatives, unless sources of documentation or data supportive of the superlative is also referenced in the material. Such supportive documentation or data must reflect data, reports, studies, or other documentation that applies to the current contract year or prior contract year.

(A) Including data older than the prior contract year is permitted provided the current and prior contract year data are specifically identified.

(B) [Reserved]

(iii) Engage in activities that could mislead or confuse Medicare beneficiaries, or misrepresent the Part D sponsor.

(iv) Engage in any discriminatory activity such as attempting to recruit Medicare beneficiaries from higher income areas without making comparable efforts to enroll Medicare beneficiaries from lower income areas, or vice versa.

(v) Target potential enrollees based on higher or lower income levels.

(vi) Target potential enrollees based on health status.

(vii) State or imply plans are only available to seniors rather than to all Medicare beneficiaries.

(viii) Employ Part D plan names that suggest that a plan is not available to all Medicare beneficiaries.

(ix) Display the names or logos or both of co-branded network pharmacies on the sponsor's member identification card, unless the pharmacy names or logos or both are related to the member selection of specific pharmacies.

(x) Use a plan name that does not include the plan type. The plan type should be included at the end of the plan name, for example, “Super Medicare Drug Plan (PDP)”. Part D sponsors are not required to repeat the plan type when the plan name is used multiple times in the same material.

(xi) Claim they are recommended or endorsed by CMS, Medicare, the Secretary, or HHS.

(xii) Convey that a failure to pay premium will not result in disenrollment except for factually accurate descriptions of the PDP sponsor's policies adopted in accordance with § 423.44(b)(1) and (d)(1) of this chapter.

(xiii) Use the term “free” to describe a $0 premium, any type of reduction in premium, reduction in deductibles or cost sharing, low-income subsidy, or cost sharing pertaining to dual eligible individuals.

(xiv) State or imply a plan is available only to or is designed for Medicaid beneficiaries.

(xv) Market a Part D plan not designed to serve dual eligible beneficiaries as if it were a plan designed to serve dual eligible beneficiaries.

(xvi) Target marketing efforts primarily to dual eligible individuals.

(xvii) Claim a relationship with the state Medicaid agency, unless a contract to coordinate Medicaid services for enrollees in that plan is in place.

(xviii) Use of the Medicare name, CMS logo, and products or information issued by the Federal Government, including the Medicare card in a misleading way. Use of the Medicare card image is permitted only with authorization from CMS.

(2) Part D sponsors may do the following:

(i) State that the Part D sponsor is approved to participate in Medicare programs or is contracted to administer Medicare benefits or both.

(ii) Use the term “Medicare-approved” to describe benefits or services in materials or both.

(b) Product endorsements and testimonials. (1) Product endorsements and testimonials may take any of the following forms:

(i) Television or video ads.

(ii) Radio ads.

(iii) Print ads.

(iv) Social media ads. In cases of social media, the use of a previous post, whether or not associated with or originated by the Part D sponsor, is considered a product endorsement or testimonial.

(v) Other types of ads.

(2) Part D sponsors may use individuals to endorse the Part D sponsor's product provided the endorsement or testimonial adheres to the following requirements:

(i) The speaker must identify the Part D sponsor's product or company by name.

(ii) Medicare beneficiaries endorsing or promoting the Part D sponsor must have been an enrollee at the time the endorsement or testimonial was created.

(iii) The endorsement or testimonial must clearly state that the individual was paid for the endorsement or testimonial, if applicable.

(iv) If an individual is used (for example, an actor) to portray a real or fictitious situation, the advertisement must state that it is an actor portrayal.

(c) Requirements when including certain telephone numbers in materials. (1) Part D sponsors must adhere to the following requirements for including certain telephone numbers in materials:

(i) When a Part D sponsor includes its customer service number, the hours of operation must be prominently included at least once.

(ii) When a Part D sponsor includes its customer service number, it must provide a toll-free TTY number in conjunction with the customer service number in the same font size.

(iii) On every material where 1-800-MEDICARE or Medicare TTY appears, the Part D sponsor must prominently include, at least once, the hours and days of operation for 1-800-MEDICARE (that is, 24 hours a day/7 days a week).

(2) The following advertisement types are exempt from these requirements:

(i) Outdoor advertising.

(ii) Banners or banner-like ads.

(iii) Radio advertisements and sponsorships.

(d) Standardized material identification (SMID). (1) Part D sponsors must use a standardized method of identification for oversight and tracking of materials received by beneficiaries.

(2) The SMID consists of the following three parts:

(i) The Part D sponsor's contract or Multi-Contract Entity (MCE) number, (that is, “S” for PDPs, or “Y” for MCE, a means of identification available for Plans/Part D sponsors that have multiple PDP contracts) followed by an underscore, except that the SMID for multi-plan marketing materials must begin with the word “MULTI-PLAN” instead of the Part D sponsor's contract number (for example, S1234_abc123_C or MULTI-PLAN_efg456_M).

(ii) A series of alpha numeric characters (at the Part D sponsor's discretion) unique to the material followed by an underscore.

(iii) An uppercase “C” for communication materials or an uppercase “M” for marketing materials (for example, S1234_abc123_C or S5678_efg456_M).

(3) The SMID is required on all materials except the following:

(i) Membership ID card.

(ii) Envelopes, radio ads, outdoor advertisements, banners, banner-like ads, and social media comments and posts.

(iii) OMB-approved forms/documents, except those materials specified in § 423.2267.

(iv) Corporate notices or forms (that is, not Part D-specific) meeting the definition of communications such as privacy notices and authorization to disclose protected health information (PHI).

(v) Agent-developed communications materials that are not marketing.

(4) Non-English and alternate format materials, based on previously created materials, may have the same SMID as the material on which they are based.

Marketing is a subset of communications and therefore must follow the requirements outlined in § 423.2262 as well as this section. Marketing (as defined in § 423.2260) must additionally meet the following requirements:

(a) Part D sponsors may begin marketing prospective plan year offerings on October 1 of each year for the following contract year. Part D sponsors may market the current and prospective year simultaneously provided materials clearly indicate what year is being discussed.

(b) In marketing, Part D sponsors may not do any of the following:

(1) Provide cash or other monetary rebates as an inducement for enrollment or otherwise.

(2) Offer gifts to beneficiaries, unless the gifts are of nominal value (as governed by guidance published by the HHS OIG), are offered to similarly situated beneficiaries without regard to whether or not the beneficiary enrolls, and are not in the form of cash or other monetary rebates.

(3) Provide meals to potential enrollees regardless of value.

(4) Market non-health care related products to prospective enrollees during any Part D sales activity or presentation. This is considered cross-selling and is prohibited.

(5) Compare their plan to other plans, unless the information is accurate, not misleading, and can be supported by the Part D sponsor making the comparison.

(6) Display the names or logos or both of pharmacy co-branding partners on marketing materials, unless the materials clearly indicate via a disclaimer or in the body that “Other pharmacies are available in the network.”

(7) Knowingly target or send unsolicited marketing materials to any Part D enrollee during the Open Enrollment Period (OEP).

(i) During the OEP, a Part D sponsors may do any of the following:

(A) Conduct marketing activities that focus on other enrollment opportunities, including but not limited to marketing to age-ins (who have not yet made an enrollment decision), marketing by 5-star plans regarding their continuous enrollment special election period (SEP), and marketing to dual-eligible and LIS beneficiaries who, in general, may make changes once per calendar quarter during the first nine months of the year;

(B) Send marketing materials when a beneficiary makes a proactive request;

(C) At the beneficiary's request, have one-on-one meetings with a sales agent;

(D) At the beneficiary's request, provide information on the OEP through the call center; and

(E) Include educational information, excluding marketing, on the Part D sponsor's website about the existence of OEP.

(ii) During the OEP, a Part D sponsors may not:

(A) Send unsolicited materials advertising the ability or opportunity to make an additional enrollment change or referencing the OEP;

(B) Specifically target beneficiaries who are in the OEP because they made a choice during Annual Enrollment Period (AEP) by purchase of mailing lists or other means of identification;

(C) Engage in or promote agent or broker activities that intend to target the OEP as an opportunity to make further sales; or

(D) Call or otherwise contact former enrollees who have selected a new plan during the AEP.

(8) Advertise benefits that are not available to beneficiaries in the service area(s) where the marketing appears, unless the advertisement is in local media that serves the service area(s) where the benefits are available and reaching beneficiaries who reside in other service areas is unavoidable.

(9) Market any products or plans, benefits, or costs, unless the Part D sponsor or marketing name(s) as listed in HPMS of the entities offering the referenced products or plans, benefits, or costs are identified in the marketing material.

(i) Part D sponsor or marketing names must be in 12-point font in print and may not be in the form of a disclaimer or in fine print.

(ii) For television, online, or social media, the Part D sponsor or marketing name(s) must be either read at the same pace as the phone number or must be displayed throughout the entire advertisement in a font size equivalent to the advertised phone number, contact information or benefits.

(iii) For radio or other voice-based advertisements, Part D sponsor or marketing names must be read at the same pace as phone numbers or contact information.

(10) Part D sponsors may not include information about savings available to potential enrollees that are based on a comparison of typical expenses borne by uninsured individuals, unpaid costs of dually eligible beneficiaries, or other unrealized costs of a Medicare beneficiary.

(c) The following requirements apply to how Part D sponsors must display CMS-issued Star Ratings:

(1) References to individual Star Rating measure(s) must also include references to the overall Star Rating for MA-PDs and the summary rating for PDP plans.

(2) May not use an individual underlying category, domain, or measure rating to imply overall higher Star Ratings.

(3) Must be clear that the rating is out of 5 stars.

(4) Must clearly identify the Star Ratings contract year.

(5) May only market the Star Ratings in the service area(s) for which the Star Rating is applicable unless using Star Ratings to convey overall Part D sponsor performance (for example, “Plan X has achieved 4.5 stars in Montgomery, Chester, and Delaware Counties), in which case the Part D sponsor must do so in a way that is not confusing or misleading.

(6) The following requirements apply to all 5 Star PDP contracts:

(i) May not market the 5-star special enrollment period, as defined in § 423.38(c)(20), after November 30 of each year if the contract has not received an overall 5 star for the next contract year.

(ii) May use CMS' 5- star icon or may create their own icon.

(7) The following requirements apply to all Low Performing MA contracts:

(i) The Low Performing Icon must be included on all materials about or referencing the specific contract's Star Ratings.

(ii) Must state the Low Performing Icon means that the Part D sponsor's contract received a summary rating of 2.5 stars or below in Part D for the last 3 years.

(iii) May not attempt to refute or minimize Low Performing Status.

For the purpose of this section, beneficiary contact means any outreach activities to a beneficiary or a beneficiary's caregivers by the Part D sponsor or its agents and brokers.

(a) Unsolicited contact. Subject to the rules for contact for plan business in paragraph (b) of this section, the following rules apply when materials or activities are given or supplied to a beneficiary or their caregiver without prior request:

(1) Part D sponsors may make unsolicited direct contact by conventional mail and other print media (for example, advertisements and direct mail) or email (provided every email contains an opt-out option).

(2) Part D sponsors may not do any of the following if unsolicited:

(i) Use door to door solicitation, including leaving information of any kind, except that information may be left when an appointment is pre-scheduled but the beneficiary is not home.

(A) Contact is unsolicited door-to-door contact unless an appointment, at the beneficiary's home at the applicable time and date, was previously scheduled.

(B) [Reserved]

(ii) Approach enrollees in common areas such as parking lots, hallways, lobbies.

(iii) Send direct messages from social media platforms.

(iv) Use telephone solicitation (that is, cold calling), robocalls, text messages, or voicemail messages, including, but not limited to, the following:

(A) Calls based on referrals.

(B) Calls to former enrollees who have disenrolled or those in the process of disenrolling, except to conduct disenrollment surveys for quality improvement purposes.

(C) Calls to beneficiaries who attended a sales event, unless the beneficiary gave express permission to be contacted.

(D) Calls to prospective enrollees to confirm receipt of mailed information.

(3) Calls are not considered unsolicited if the beneficiary provides consent or initiates contact with the plan. For example, returning phone calls or calling an individual who has completed a business reply card requesting contact is not considered unsolicited.

(b) Contact for plan business. Part D sponsors may contact current, and to a more limited extent, former members, including those enrolled in other products offered by the parent organization, to discuss plan business, in accordance with the following requirements:

(1) A Part D sponsor may conduct the following activities as plan business:

(i) Call current enrollees, including those in non-Medicare products, to discuss Medicare products. Examples of such calls include, but are not limited to the following:

(A) Enrollees aging into Medicare from commercial products.

(B) Existing enrollees, including Medicaid enrollees, to discuss other Medicare products or plan benefits.

(C) Members in an MA or cost plan to discuss other Medicare products.

(ii) Call beneficiaries who submit enrollment applications to conduct business related to enrollment.

(iii) With prior CMS approval, call LIS enrollees that a plan is prospectively losing due to reassignment. CMS decisions to approve calls are for limited circumstances based on the following:

(A) The proximity of cost of the losing plan as compared to the national benchmark; and

(B) The selection of plans in the service area that are below the benchmark.

(iv) Agents/brokers calling clients who are enrolled in other products they may sell, such as automotive or home insurance.

(v) Part D sponsors may not make unsolicited calls about other lines of business as a means of generating leads for Medicare plans.

(2) If the Part D sponsor reaches out to beneficiaries regarding plan business, as outlined in this section, the Part D sponsor must provide notice to all beneficiaries whom the plan contacts as least once annually, in writing, of the individual's ability to opt out of future calls regarding plan business.

(c) Events with beneficiaries. Part D sponsors and their agent or brokers may hold educational events, marketing or sales events, and personal marketing appointments to meet with Medicare beneficiaries, either face-to-face or virtually. The requirements for each type of event are as follows:

(1) Educational events must be advertised as such and be designed to generally inform beneficiaries about Medicare, including Medicare Advantage, Prescription Drug programs, or any other Medicare program.

(i) At educational events, Part D sponsors and agents/brokers may not market specific Part D sponsors or benefits.

(ii) Part D sponsors holding or participating in educational events may do any of the following:

(A) Distribute communication materials.

(B) Answer beneficiary initiated questions pertaining to Part D plans.

(C) Distribute business cards.

(D) Make available and receive beneficiary contact information, including Business Reply Cards, but not including Scope of Appointment forms.

(iii) Part D sponsors holding or participating in educational events may not conduct sales or marketing presentations or distribute or accept plan applications.

(iv) Part D sponsors may schedule appointments with residents of long-term care facilities (for example, nursing homes, assisted living facilities, board and care homes) upon a resident's request. If a resident did not request an appointment, any visit by an agent or broker is prohibited as unsolicited door-to-door marketing.

(2) Marketing or sales events are group events that fall within the definition of marketing at § 423.2260.

(i) Marketing events are prohibited from taking place within 12 hours of an educational event, in the same location. The same location is defined as the entire building or adjacent buildings.

(ii) Part D sponsors holding or participating in marketing events may do any of the following:

(A) Provide marketing materials.

(B) Distribute and accept plan applications.

(C) Collect Scope of Appointment forms for future personal marketing appointments.

(D) Conduct marketing presentations.

(iii) Part D sponsors holding or participating in marketing events may not do any of the following:

(A) Require sign in sheets or require attendees to provide contact information as a prerequisite for attending an event.

(B) Conduct activities, including health screenings, health surveys, or other activities that are used for or could be viewed as being used to target a subset of members (that is “cherry-picking”).

(C) Use information collected for raffles or drawings for any purpose other than raffles or drawings.

(3) Personal marketing appointments are those appointments that are tailored to an individual or small group (for example, a married couple). Personal marketing appointments are not defined by the location.

(i) At least 48 hours prior to the scheduled personal marketing appointment, the Part D plan (or agent or broker, as applicable) must agree upon and record the Scope of Appointment with the beneficiary(ies), except for:

(A) SOAs that are completed during the last four days prior to a valid election period for the beneficiary.

(B) Unscheduled in person visits (walk-ins) initiated by the beneficiary.

(ii) Part D sponsors holding a personal marketing appointment may do any of the following:

(A) Provide marketing materials.

(B) Distribute and accept plan applications.

(C) Conduct marketing presentations.

(D) Review the individual needs of the beneficiary including, but not limited to, health care needs and history, commonly used medications, and financial concerns.

(iii) Part D sponsors holding a personal marketing appointment may not do any of the following:

(A) Market any health care related product during a marketing appointment beyond the scope agreed upon by the beneficiary, and documented by the plan in a Scope of Appointment, business reply card, or request to receive additional information, which is valid for 12 months following the date of beneficiary's signature date or the date of the beneficiary's initial request for information.

(B) Market additional health related lines of plan business not identified prior to an individual appointment without a separate Scope of Appointment, identifying the additional lines of business to be discussed; such Scope of Appointment is valid for 12 months following the beneficiary's signature date.

(C) Market non-health related products such as annuities.

As required under § 423.128(d)(2), Part D sponsors must have a website.

(a) General website requirements. (1) Part D sponsor websites must meet all of the following requirements:

(i) Maintain current year contract content through December 31 of each year.

(ii) Notify users when they will leave the Part D sponsor's Medicare site.

(iii) Include or provide access to (for example, through a hyperlink) applicable notices, statements, disclosures, or disclaimers with corresponding content. Overarching disclaimers, such as the Federal Contracting Statement, are not required on every page.

(iv) Reflect the most current information within 30 days of any material change

(v) Keep PDP content separate and distinct from other lines of business, including Medicare Supplemental Plans.

(2) Part D sponsor websites may not do any of the following:

(i) Require beneficiaries to enter any information other than zip code, county, or state for access to non-beneficiary-specific website content.

(ii) Provide links to foreign drug sales, including advertising links.

(iii) State that the Part D sponsor is not responsible for the content of their social media pages or the website of any first tier, downstream, or related entity that provides information on behalf of the Part D sponsor.

(b) Required content. A Part D sponsor's websites must include the following content:

(1) A toll-free customer service number, TTY number, and days and hours of operation.

(2) A physical or Post Office Box address.

(3) A PDF or copy of a printable pharmacy directory.

(4) A searchable pharmacy directory.

(5) A searchable formulary.

(6) Information on enrollees' and Part D sponsors' rights and responsibilities upon disenrollment. Part D sponsors may either post this information or provide specific information on where it is located in the Evidence of Coverage together with a link to that document.

(7) A description of and information on how to file a grievance, request an organization determination, and an appeal.

(8) Prominently displayed link to the Medicare.gov electronic complaint.

(9) A Notice of Privacy Practices as required under the HIPAA Privacy Rule (45 CFR 164.520).

(10) Prescription Drug Transition Policy.

(11) LIS Premium Summary Chart.

(12) Prescription Drug Transition Policy.

(13) A separate section or page about MTM programs providing the following:

(i) Explanation of MTM program, including eligibility requirements, the purpose and benefits of MTM, how to obtain MTM service documents including the Medication list, that the service is free, and a summary of services.

(ii) Information on how to obtain information about the MTM program, including how the member will know they are eligible and enrolled into the MTM program, the comprehensive medication review and targeted medication reviews, a description of how reviews are conducted and delivered, including time commitments and materials beneficiaries will receive.

(14) Instructions on how to appoint a representative including a link to the downloadable version of the CMS Appointment of Representative Form (CMS Form-1696).

(15) Enrollment instructions and forms.

(c) Required posted materials. A Part D sponsor's website must provide access to the following materials, in a printable format, within the timeframes specified in paragraphs (c)(1) and (2) of this section.

(1) The following materials for each plan year must be posted on the website by October 15 prior to the beginning of the plan year:

(i) Evidence of Coverage.

(ii) Annual Notice of Change (for renewing plans).

(iii) Summary of Benefits.

(iv) Pharmacy Directory.

(v) Formulary.

(vi) Utilization Management Forms for physicians and enrollees.

(2) The following materials must be posted on the website throughout the year and be updated as required:

(i) Prior Authorization Forms for Physicians and Enrollees.

(ii) Part D Model Coverage Determination and Redetermination Request Forms.

(iii) Exception request forms for physicians (which must be posted by January 1 for new plans).

(iv) CMS Star Ratings document, which must be posted within 21 days after its release on the Medicare Plan Finder.

(a) Where marketing is prohibited. The requirements in paragraphs (c) through (e) of this section apply to activities in the health care setting. Marketing activities and materials are not permitted in areas where care is being administered, including but not limited to the following:

(1) Exam rooms.

(2) Hospital patient rooms.

(3) Treatment areas where patients interact with a provider and his/her clinical team and receive treatment (including such areas in dialysis treatment facilities).

(4) Pharmacy counter areas.

(b) Where marketing is permitted. Marketing activities and materials are permitted in common areas within the health care setting, including the following:

(1) Common entryways.

(2) Vestibules.

(3) Waiting rooms.

(4) Hospital or nursing home cafeterias.

(5) Community, recreational, or conference rooms.

(c) Provider-initiated activities. Provider-initiated activities are activities conducted by a provider at the request of the patient, or as a matter of a course of treatment, and occur when meeting with the patient as part of the professional relationship between the provider and patient. Provider-initiated activities do not include activities conducted at the request of the Part D sponsor or pursuant to the network participation agreement between the Part D sponsor and the provider. Provider-initiated activities that meet this definition in this paragraph (c) fall outside of the definition of marketing in § 423.2260. Permissible provider-initiated activities include:

(1) Distributing unaltered, printed materials created by CMS, such as reports from Medicare Plan Finder, the “Medicare & You” handbook, or “Medicare Options Compare” (from https://www.medicare.gov) including in areas where care is delivered.

(2) Providing the names of Part D sponsors with which they contract or participate or both.

(3) Answering questions or discussing the merits of a Part D plan or plans, including cost sharing and benefit information including in areas where care is delivered.

(4) Referring patients to other sources of information, such as State Health Insurance Assistance Program (SHIP) representatives, plan marketing representatives, State Medicaid Office, local Social Security Offices, CMS' website at https://www.medicare.gov, or 1-800-MEDICARE.

(5) Referring patients to Part D marketing materials available in common areas.

(6) Providing information and assistance in applying for the LIS.

(7) Announcing new or continuing affiliations with Part D sponsors, once a contractual agreement is signed. Announcements may be made through any means of distribution.

(d) Plan-initiated provider activities. Plan-initiated provider activities are those activities conducted by a provider at the request of a Part D sponsor. During a plan-initiated provider activity, the provider is acting on behalf of the Part D sponsor. For the purpose of plan-initiated activities, the Part D sponsor is responsible for compliance with all applicable regulatory requirements.

(1) During plan-initiated provider activities, Part D sponsors must ensure that the provider does not:

(i) Accept/collect scope of appointment forms.

(ii) Accept Medicare enrollment applications.

(iii) Make phone calls or direct, urge, or attempt to persuade their patients to enroll in a specific plan based on financial or any other interests of the provider.

(iv) Mail marketing materials on behalf of a Part D sponsor.

(v) Offer inducements to persuade patients to enroll with a particular Part D plan or sponsor.

(vi) Conduct health screenings as a marketing activity.

(vii) Distribute marketing materials or enrollment forms in areas where care is being delivered.

(viii) Offer anything of value to induce enrollees to select the provider.

(ix) Accept compensation from the Part D sponsor for any marketing or enrollment activities performed on behalf of the Part D sponsor.

(2) During plan-initiated provider activities, the provider may do any of the following:

(i) Make available, distribute, and display communications materials, including in areas where care is being delivered.

(ii) Provide or make available marketing materials and enrollment forms in common areas.

(e) Part D sponsor activities in the healthcare setting. Part D sponsor activities in the health care setting are those activities, including marketing activities that are conducted by Part D sponsor or on behalf of the Part D sponsor, or by any downstream entity, but not by a provider. All marketing must comply with the requirements in paragraphs (a) and (b) of this section. However, during Part D sponsor activities, the following is permitted:

(1) Accepting and collect Scope of Appointment forms.

(2) Accepting enrollment forms.

(3) Making available, distributing, and displaying communications materials, including in areas where care is being delivered.

For information CMS deems to be vital to the beneficiary, including information related to enrollment, benefits, health, and rights, the agency may develop materials or content that are either standardized or provided in a model form. Such materials and content are collectively referred to as required.

(a) Standards for required materials and content. All required materials and content, regardless of categorization as standardized in paragraph (b) of this section or model in paragraph (c) of this section, must meet the following:

(1) Be in a 12pt font, Times New Roman or equivalent.

(2) For markets with a significant non-English speaking population, be in the language of these individuals. Specifically, Part D sponsors must translate required materials into any non-English language that is the primary language of at least 5 percent of the individuals in a plan benefit package (PBP) service area.

(3) Be provided to enrollees on a standing basis in any non-English language identified in paragraphs (a)(2) and (4) of this section and/or accessible format using auxiliary aids and services upon receiving a request for the materials in a non-English language or accessible format or when otherwise learning of the enrollee's primary language and/or need for an accessible format. This requirement also applies to the individualized plans of care described in § 422.101(f)(1)(ii) of this chapter for special needs plan enrollees.

(4) For any fully integrated dual eligible special needs plan or highly integrated dual eligible special needs plan as defined at § 422.2 of this chapter, or applicable integrated plan as defined at § 422.561 of this chapter, be translated into the language(s) required by the Medicaid translation standard as specified through their capitated Medicaid managed care contract in addition to the language(s) required by the Medicare translation standard in paragraph (a)(2) of this section.

(5) Be provided to the beneficiary within CMS's specified timeframes.

(b) Standardized materials. Standardized materials and content are required materials and content that must be used in the form and manner provided by CMS.

(1) When CMS issues standardized material or content, a Part D sponsor must use the document without alteration except for the following:

(i) Populating variable fields.

(ii) Correcting grammatical errors.

(iii) Adding customer service phone numbers.

(iv) Adding plan name, logo, or both.

(v) Deleting content that does not pertain to the plan type (for example, removing MA language for a Part D plan).

(vi) Adding the SMID.

(vii) A Notice of Privacy Practices as required under the HIPAA Privacy Rule (45 CFR 164.520).

(2) When CMS issues standardized content, Part D sponsors—

(3) The Part D sponsor may develop accompanying language for standardized material or content, provided that language does not conflict with the standardized material or content. For example, CMS may issue standardized content associated with an appeal notification and Part D sponsor may draft a letter that includes the standardized content in the body of the letter; the remaining language in the letter is at the sponsor's discretion, provided it does not conflict with the standardized content or other regulatory standards.

(c) Model materials. Model materials and content are those required materials and content created by CMS as an example of how to convey beneficiary information. When drafting required materials or content based on CMS models, Part D sponsors:

(1) Must accurately convey the vital information in the required material or content to the beneficiary, although the Part D sponsor is not required to use CMS model materials or content verbatim; and

(2) Must follow CMS's specified order of content, when specified.

(d) Delivery of required materials. Part D sponsors must mail required materials in hard copy or provide them electronically, following the requirements in paragraphs (d)(1) and (2) of this section.

(1) For hard copy mailed materials, each enrollee must receive his or her own copy, except in cases of non-beneficiary-specific material(s) where the Part D sponsor has determined multiple enrollees are living in the same household and it has reason to believe the enrollees are related. In that case, the Part D sponsor may mail one copy to the household. The Part D sponsor must provide all enrollees an opt-out process so the enrollees can each receive his or her own copy, instead of a copy to the household. Materials specific to an individual beneficiary must always be mailed to that individual.

(2) Materials may be delivered electronically following the requirements in paragraphs (d)(2)(i) and (ii) of this section.

(i) Without prior authorization from the enrollee, Part D sponsors may mail new and current enrollees a notice informing enrollees how to electronically access the following required materials: the Evidence of Coverage, Provider and Pharmacy Directories, and Formulary. The following requirements apply:

(A) The Part D sponsor may mail one notice for all materials or multiple notices.

(B) Notices for prospective year materials may not be mailed prior to September 1 of each year, but must be sent in time for an enrollee to access the specified materials by October 15 of each year.

(C) The Part D sponsor may send the notice throughout the year to new enrollees.

(D) The notice must include the website address to access the materials, the date the materials will be available if not currently available, and a phone number to request that hard copy materials be mailed.

(E) The notice must provide the enrollee with the option to request hardcopy materials. Requests may be material specific, and must have the option of a one-time request or a permanent request that must stay in place until the enrollee chooses to receive electronic materials again.

(F) Hard copies of requested materials must be sent within three business days of the request.

(ii) With prior authorization from the enrollee, the Part D sponsor may provide any required material or content electronically. To do so, the Part D sponsor must do all of the following:

(A) Obtain prior consent from the enrollee. The consent must specify both the media type and the specific materials being provided in that media type.

(B) Provide instructions on how and when enrollees can access the materials.

(C) Have a process through which an enrollee can request hard copies be mailed, providing the beneficiary with the option of a one-time request or a permanent request (which must stay in place until the enrollee chooses to receive electronic materials again), and with the option of requesting hard copies for all or a subset of materials. Hard copies must be mailed within three business days of the request.

(D) Have a process for automatic mailing of hard copies when electronic versions or the chosen media type is undeliverable.

(e) CMS required materials and content. The following are required materials that must be provided to current and prospective enrollees, as applicable, in the form and manner outlined in this section. Unless otherwise noted or instructed by CMS and subject to § 423.2263(a) of this chapter, required materials may be sent once a fully executed contract is in place, but no later than the due dates listed for each material in this section.

(1) Evidence of Coverage (EOC). The EOC is a standardized communications material through which certain required information (under § 423.128(b)) must be provided annually and must be provided:

(i) To current enrollees of plan by October 15, prior to the year to which the EOC applies.

(ii) To new enrollees within 10 calendar days from receipt of CMS confirmation of enrollment or by last day of month prior to effective date, whichever is later.

(2) Part D explanation of benefits (EOB). The EOB is a model communications material through which plans must provide the information required under § 423.128(e). Part D sponsors must provide enrollees with an EOB no later than the end of the month following any month in which the enrollee utilized their prescription drug benefit.

(3) Annual Notice of Change (ANOC). The ANOC is a standardized marketing material through which plans must provide the information required under § 423.128(g)(2) annually.

(i) Must send for enrollee receipt no later than September 30 of each year.

(ii) Enrollees with an October 1, November 1, or December 1 effective date must receive within 10 calendar days from receipt of CMS confirmation of enrollment or by last day of month prior to effective date, whichever is later.

(4) Pre-enrollment checklist (PECL). The PECL is a standardized communications material that plans must provide to prospective enrollees with the enrollment form, so that the enrollees understand important plan benefits and rules. For telephonic enrollments the contents of the PECL must be reviewed with the prospective enrollee prior to the completion of the enrollment. It references information on the following:

(i) The EOC.

(ii) Provider directory.

(iii) Pharmacy directory.

(iv) Formulary.

(v) Premiums/copayments/coinsurance.

(vi) Emergency/urgent coverage.

(vii) Plan-type rules.

(viii) Effect on current coverage.

(5) Summary of Benefits (SB). Part D sponsors must disseminate a summary of highly utilized coverage that include benefits and cost sharing to prospective enrollees, known as the SB. The SB is a model marketing material. It must be in a clear and accurate format.

(i) The SB must be provided with an enrollment form as follows:

(A) In hardcopy with a paper enrollment form.

(B) For online enrollment, the SB must be made available electronically (for example, via a link) prior to the completion and submission of enrollment request.

(C) For telephonic enrollment, the beneficiary must be verbally told where the SB can be accessed.

(ii) The SB must include the following information:

(A) Information on prescription drug expenses, including:

(1) Monthly plan premium

(2) Deductible, the initial coverage phase, coverage gap, and catastrophic coverage.

(3) A statement that costs may differ based on pharmacy type or status (for example, preferred/non-preferred, mail order, long-term care (LTC) or home infusion, and 30- or 90-day supply), when applicable.

(4) For dual eligible enrollees with differing levels of cost must state how cost sharing and benefits differ depending on the level of Medicaid eligibility.

(B) Plan sponsors may describe or identify other health related benefits in the SB.

(6) Enrollment/Election form. This is the model communications material through which plans must provide the information required under § 423.32(b).

(7) Enrollment Notice. This is a model communications material through which plans must provide the information required under § 423.32(d).

(8) Disenrollment Notice. This is a model communications material through which plans must provide the information required under § 423.36(b)(2).

(9) Formulary. This is a model communications material through which Part D sponsors must provide information required under § 423.128(b)(4).

(i) Must be provided to current enrollees of plan by October 15 of each year.

(ii) Must also provide to new enrollees within 10 calendar days from receipt of CMS confirmation of enrollment or by last day of month prior to effective date, whichever is later.

(10) Low Income Subsidy (LIS) Notice. This is a model communications content through which Part D sponsors must notify potential enrollees of what their plan premium will be once they are eligible for Extra Help and receive the low-income subsidy.

(11) Low Income Subsidy (LIS) Rider. This is a model communications material provided to all enrollees who qualify for Extra Help. In the LIS Rider, the Part D sponsors must convey how much help the beneficiary will receive in the benefit year toward their Part D premium, deductible, and copayments provide to all beneficiaries who qualify for Extra Help.

(i) The LIS Rider must be provided at least once per year by September 30.

(ii) The LIS Rider must be sent to enrollees who qualify for Extra Help or have a change in LIS levels within 30 days of receiving notification from CMS.

(12) Midyear Change Notification. This is a model communications material through which plans must provide a notice to enrollees when there is a midyear change in benefits or plan rules, under the following timelines:

(i) Notices of changes in plan rules, unless otherwise addressed elsewhere in the regulation, must be provided 30 days in advance.

(ii) National Coverage Determination (NCD) changes announced or finalized less than 30 days before effective date, a notification is required as soon as possible.

(iii) Midyear NCD or legislative changes must be provided no later than 30 days after the NCD is announced or the legislative change is effective.

(A) Plans may include the change in next plan mass mailing (for example, newsletter), provided it is within 30 days.

(B) The notice must also appear on the MA organization's website.

(13) Non-renewal notice. This is a standardized communications material through which plans must provide the information required under § 423.507.

(i) The Non-renewal Notice must be provided at least 90 calendar days before the date on which the nonrenewal is effective. For contracts ending on December 31, the notice must be dated October 2 to ensure national consistency in the application of Medigap Guaranteed Issue (GI) rights to all enrollees, except for those enrollees in Medicare-Medicaid Plans (MMPs) and special needs plans (SNPs). Information about non-renewals or service area reductions may not be released to the public, including the Non-renewal Notice in this section, until CMS provides notification to the plan.

(ii) The Non-renewal Notice must do all of the following:

(A) Inform the enrollee that the plan will no longer be offered and the date the plan will end.

(B) Provide information about any applicable open enrollment periods or special election periods or both (for example, Medicare open enrollment, non-renewal special election period), including the last day the enrollee has to make a Medicare prescription drug plan selection.

(C) Explain what the enrollee must do to continue receiving Medicare coverage and what will happen if the enrollee chooses to do nothing.

(D) As required under § 423.507(a)(2)(ii)(A), provide a CMS-approved written description of alternative MA plan, MA-PD plan, and PDP options available for obtaining qualified Medicare services within the beneficiary's region in the enrollee's notice.

(E) Specify when coverage will start after a new Medicare plan is chosen.

(F) List 1-800-MEDICARE contact information together with other organizations that may be able to assist with comparing plans (for example, SHIPs).

(G) Include the Part D sponsor's call center telephone number, TTY number, and hours and days of operation.

(14) Part D Transition Letter. This is a model communications material that must be provided to the beneficiary when they receive a transition fill for a nonformulary drug. The Part D Transition Letter must be sent within three days of adjudication of temporary transition fill.

(15) Pharmacy Directory. This is a model communications material through which Part D sponsors must provide the information required under § 423.128. The pharmacy directory must meet all of the following:

(i) Be provided to current enrollees by October 15 of the year prior to the applicable year.

(ii) Be provided to new enrollees within 10 calendars days from receipt of CMS confirmation of enrollment or by last day of month prior to effective date, whichever is later.

(iii) Be provided to current enrollees upon request, within three business days of the request.

(iv) Be updated any time the Part D sponsor becomes aware of changes.

(A) All updates to the online pharmacy directories must be completed within 30 days of receiving information requiring update.

(B)(1) Updates to hardcopy provider directories must be completed within 30 days.

(2) Hardcopy directories that include separate updates via addenda are considered up-to-date.

(16) Prescription transfer letter. This is a model communications material that must be sent when a Part D sponsor requests permission from an enrollee to fill a prescription at a different network pharmacy than the one currently being used by enrollee.

(17) Star Ratings Document. This is a standardized marketing material through which Star Ratings information is conveyed to prospective enrollees.

(i) The Star Ratings Document is generated through HPMS.

(ii) The Star Ratings Document must be provided with an enrollment form as follows:

(A) In hardcopy with a paper enrollment form.

(B) For online enrollment, made available electronically (for example, via a link) prior to the completion and submission of enrollment request.

(C) For telephonic enrollment, the beneficiary must be verbally told where they can access the Star Ratings Document.

(iii) New Part D sponsors that have no Star Ratings are not required to provide the Star Ratings Document until the following contract year.

(iv) Updated Star Ratings must be used within 21 calendar days of release of updated information on Medicare Plan Finder.

(v) Updated Star Ratings must not be used until CMS releases Star Ratings on Medicare Plan Finder.

(18) Coverage Determination Notices. This is a model communications material through which plans must provide the information under § 423.568.

(19) Excluded Provider Notices. This is a model communications material through which plans must notify enrollees when a provider they use has been excluded from participating in the Medicare program based on an OIG exclusion or the CMS preclusion list.

(20) Notice of Denial of Medicare Prescription Drug Coverage. This is a standardized material used to convey detailed descriptions of denied drug coverage and appeal rights.

(21) Medicare Prescription Drug Coverage and Your Rights. This is a standardized communications material used to convey a beneficiary's appeal rights when a drug cannot be filled at point-of-sale.

(22) Medicare Part D Coverage Determination Request Form. This is a model communications material used to collect additional information from a prescriber.

(23) Request for Additional Information. This is a standardized communications material used by the Part D sponsor to request a beneficiary obtain additional information from the prescriber regarding a beneficiary's exception request.

(24) Notice of Right to an Expedited Grievance. This is a model communications material used to convey a Medicare beneficiary's rights to request that a decision be made on a grievance or appeal within a shorter timeframe.

(25) Notice of Inquiry. This is a model communications material from a prescription drug plan informing a beneficiary if a drug is covered by the formulary.

(26) Notice of Case Status. This is a model communications material used to inform a beneficiary of the denial of an appeal and additional appeal rights.

(27) Request for Reconsideration of Medicare Prescription Drug Denial. This is a model communications material used to inform the beneficiary of rights to an independent review of a Part D sponsor's decision.

(28) Notice of Redetermination. This is a model communications material used to convey instructions for requesting an appeal of an adverse coverage determination.

(29) LEP Reconsideration Request Form. This is a model communication used to request an appeal of a decision on an LEP by the independent review entity.

(30) Request for Administrative Law Judge (ALJ) Hearing or Review of Dismissal. This is a model communication used by an enrollee to request a hearing by the ALJ or a review of the IRE dismissal.

(31) Appointment of Representative (AOR). This is a standardized material used to assign an individual to act on behalf of a beneficiary for the purpose of an appeal, grievance, or coverage determination.

(32) Member ID card. The member ID card is a model communications material that plans must provide to enrollees as required under § 423.128(d)(2). The member ID card—

(i) Must be provided to new enrollees within 10 calendars days from receipt of CMS confirmation of enrollment or by the last day of month prior to the plan effective date, whichever is later;

(ii) Must include the Part D sponsor's—

(A) Website address;

(B) Customer service number (the member ID card is excluded from the hours of operations requirement under § 423.2262(c)(1)(i)); and

(C) Contract/PBP number;

(iii) Must include, if issued for a preferred provider organization (PPO) and PFFS plan, the phrase “Medicare limiting charges apply.”;

(iv) May not use a member's Social Security number (SSN), in whole or in part;

(v) Must be updated whenever information on a member's existing card changes; in such cases an updated card must be provided to the member;

(vi) Is excluded from the translation requirement under paragraphs (a)(2) through (4) of this section; and

(vii) Is excluded from the 12-point font size requirement under paragraph (a)(1) of this section.

(33) Multi-language insert (MLI). This is a standardized communications material which states, “We have free interpreter services to answer any questions you may have about our health or drug plan. To get an interpreter, just call us at [1-xxx-xxx-xxxx]. Someone who speaks [language] can help you. This is a free service.” in the following languages: Spanish, Chinese, Tagalog, French, Vietnamese, German, Korean, Russian, Arabic, Italian, Portuguese, French Creole, Polish, Hindi, and Japanese.

(i) Additional languages that meet the 5-percent service area threshold, as required under paragraph (a)(2) of this section, must be added to the MLI used in that service area. A plan may also opt to include in the MLI any additional language that do not meet the 5-percent service area threshold, where it determines that this inclusion would be appropriate.

(ii) The MLI must be provided with all required materials under paragraph (e) of this section.

(iii) The MLI may be included as a part of the required material or as a standalone material in conjunction with the required material.

(iv) When used as a standalone, the MLI may include organization name and logo.

(v) When mailing multiple required materials together, only one MLI is required.

(vi) The MLI may be provided electronically when a required material is provided electronically as permitted under paragraph (d)(2) of this section.

(34) Federal Contracting Statement. This is model content through which plans must convey that they have a contract with Medicare and that enrollment in the plan depends on contract renewal.

(i) The Federal Contracting Statement must include all of the following:

(A) Legal or marketing name of the organization.

(B) Type of plan (for example PDP).

(C) A statement that the organization has a contract with Medicare (when applicable, Part D sponsors may incorporate a statement that the organization has a contract with the State/Medicaid program).

(D) A statement that enrollment depends on contract renewal.

(ii) Part D sponsors must include the Federal Contracting Statement on all marketing materials with the exception of the following:

(A) Banner and banner-like advertisements.

(B) Outdoor advertisements.

(C) Text messages.

(D) Social media.

(E) Envelopes

(35) Star Ratings Disclaimer. This is model content through which plans must:

(i) Convey that plan sponsors are evaluated yearly by Medicare

(ii) Convey that the ratings are based on a 5-star rating system

(iii) Include the model content in disclaimer form or within the material whenever Star Ratings are mentioned in marketing materials, with the exception of when Star Ratings are published on small objects (that is, a give-away items such as a pens or rulers).

(36) Accommodations Disclaimer. This is model content through which plans must:

(i) Convey that accommodations for persons with special needs is available

(ii) Provide a telephone number and TTY number

(iii) Include the model content in disclaimer form or within the body of the material on any advertisement of invitation to all events as described under § 423.2264(c).

(37) Mailing Statements. This is standardized content. It consists of statements on envelopes that Part D sponsor must include when mailing information to current members, as follows:

(i) Part D sponsors must include the following statement when mailing information about the enrollee's current plan: “Important [Insert Plan Name] information.”

(ii) Part D sponsors must include the following statement when mailing health and wellness information “Health and wellness or prevention information.”

(iii) The Part D sponsor must include the plan name; however, if the plan name is elsewhere on the envelope, the plan name does not need to be repeated in the disclaimer.

(iv) Delegated or sub-contracted entities and downstream entities that conduct mailings on behalf of a multiple Part D sponsors must also comply with this requirement, however, they do not have to include a plan name.

(38) Promotional Give-Away Disclaimer. This is model content. The disclaimer consists of a statement that must make clear that there is no obligation to enroll in a plan, and must be included when offering a promotional give-away such as a drawing, prizes, or a free gift.

(39) Provider Co-Branded Material Disclaimer. This is model content through which Part D sponsors must:

(i) Convey, as applicable, that other pharmacies, physicians or providers are available in the plan's network.

(ii) Include the model content in disclaimer form or within the material whenever co-branding relationships with network provider are mentioned.

(40) Limited access to preferred cost-sharing pharmacies. This is standardized content that must—

(i) Be used on all materials mentioning preferred pharmacies when there is limited access to preferred pharmacies; and

(ii) Include the following language: “<insert organization/plan name>'s pharmacy network includes limited lower-cost, preferred pharmacies in <insert geographic area type(s) and state(s) for which plan is an outlier)>. The lower costs advertised in our plan materials for these pharmacies may not be available at the pharmacy you use. For up-to-date information about our network pharmacies, including whether there are any lower-cost preferred pharmacies in your area, please call <insert Member Services phone number and TTY> or consult the online pharmacy directory at <insert website>.”

(41) Third-party marketing organization disclaimer. This is standardized content. If a TPMO does not sell for all Part D sponsors in the service area the disclaimer consists of the statement: “We do not offer every plan available in your area. Currently we represent [insert number of organizations] organizations which offer [insert number of plans] products in your area. Please contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Program to get information on all of your options.” If the TPMO sells for all Part D sponsors in the service area the disclaimer consists of the statement: “Currently we represent [insert number of organizations] organizations which offer [insert number of plans] products in your area. You can always contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Program for help with plan choices.” The Part D sponsor must ensure that the disclaimer is as follows:

(i) Used by any TPMO, as defined under § 422.2260, that sells plans on behalf of more than one Part D sponsor.

(ii) Verbally conveyed within the first minute of a sales call.

(iii) Electronically conveyed when communicating with a beneficiary through email, online chat, or other electronic means of communication.

(iv) Prominently displayed on TPMO websites.

(v) Included in any marketing materials, including print materials and television advertisements, developed, used or distributed by the TPMO.

(42) [Reserved]

(43) Comprehensive medication review—written summary. This is the standardized communications material Part D sponsors must provide to all MTM program enrollees who receive a comprehensive medication review, as required under § 423.153(d)(1)(vii)(B).

(44) Safe disposal information. This is model communications material Part D sponsors must provide to all enrollees targeted for its MTM program, as required under § 423.153(d)(1)(vii)(E).

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.

(d) Report to the State in which the MAO appoints an agent or broker, the termination of any such agent or broker, including the reasons for such termination if State law requires that the reasons for the termination be reported.

(e) Establish and implement an oversight plan that monitors agent and broker activities, identifies non-compliance with CMS requirements, and reports non-compliance to CMS.

If a Part D sponsor uses agents and brokers to sell its Medicare Part D plans, the requirements in paragraphs (a) through (e) of this section are applicable. If a Part D sponsor makes payments to third parties, the requirements in paragraph (f) of this section are applicable.

(a) Definitions. For purposes of this section, the following definitions are applicable:

Compensation. (i) Includes monetary or non-monetary remuneration of any kind relating to the sale or renewal of a plan or product offered by a Part D sponsor including, but not limited to the following:

(A) Commissions.

(B) Bonuses.

(C) Gifts.

(D) Prizes or Awards.

(ii) Does not include any of the following:

(A) Payment of fees to comply with State appointment laws, training, certification, and testing costs.

(B) Reimbursement for mileage to, and from, appointments with beneficiaries.

(C) Reimbursement for actual costs associated with beneficiary sales appointments such as venue rent, snacks, and materials.

Fair market value (FMV) means, for purposes of evaluating agent/broker compensation under the requirements of this section only, the amount that CMS determines could reasonably be expected to be paid for an enrollment or continued enrollment into a Part D plan. Beginning January 1, 2021, the FMV is $81. For subsequent years, FMV is calculated by adding the current year FMV and the product of the current year FMV and the Annual Percentage Increase for Part D, which is published for each year in the rate announcement issued pursuant to § 422.312 of this chapter.

Initial enrollment year means the first year that a beneficiary is enrolled in a plan versus subsequent years (c.f., renewal year) that a beneficiary remains enrolled in a plan.

Like plan type means one of the following:

(i) PDP replaced with another PDP.

(ii) MA or MA-PD replaced with another MA or MA-PD.

(iii) Cost plan replaced with another cost plan.

Plan year and enrollment year mean the year beginning January 1 and ending December 31.

Renewal year means all years following the initial enrollment year in the same plan or in different plan that is a like plan type.

Unlike plan type means one of the following:

(i) An MA or MA-PD plan to a PDP or Section 1876 Cost Plan.

(ii) A PDP to a Section 1876 Cost Plan or an MA or MA-PD plan.

(iii) A Section 1876 Cost Plan to an MA or MA-PD plan or PDP.

(b) Agent/broker requirements. Agents and brokers who represent Part D sponsors must follow the requirements in paragraphs (b)(1) through (3) of this section. Representation includes selling products (including Medicare Advantage plans, Medicare Advantage-Prescription Drug plans, Medicare Prescription Drug plans, and section 1876 Cost plans) as well as outreach to existing or potential beneficiaries and answering or potentially answering questions from existing or potential beneficiaries.

(1) Be licensed and appointed under State law (if required under applicable State law).

(2) Be trained and tested annually as required under paragraph (c)(4) of this section, and achieve an 85 percent or higher on all forms of testing.

(3) Secure and document a Scope of Appointment prior to meeting with potential enrollees.

(c) Part D sponsor oversight. Part D sponsors must oversee first tier, downstream, and related entities that represent Part D sponsor to ensure agents and brokers abide by all applicable State and Federal laws, regulations, and requirements. Part D sponsors must do all of the following:

(1) As required under applicable State law, employ as marketing representatives only individuals who are licensed by the State to conduct marketing (as defined in this subpart) of health insurance in that State, and whom the Part D sponsor has informed that State it has appointed, consistent with the appointment process for agents and brokers provided for under State law.

(2) As required under applicable State law, report the termination of an agent or broker to the State and the reason for termination if required by state law.

(3) Report to CMS all enrollments made by unlicensed agents or brokers and for-cause terminations of agents or brokers.

(4) On an annual basis, provide training and testing to agents and brokers on Medicare rules and regulations, the plan products that agents and brokers will sell including any details specific to each plan product, and relevant State and Federal requirements.

(5) On an annual basis by the last Friday in July, report to CMS whether the Part D sponsor intends to use employed, captive, or independent agents or brokers in the upcoming plan year and the specific rates or range of rates the plan will pay independent agents and brokers. Following the reporting deadline, Part D sponsor may not change their decisions related to agent or broker type, or their compensation rates and ranges, until the next plan year.

(6) On an annual basis by October 1, have in place full compensation structures for the following plan year. The structure must include details on compensation dissemination, including specifying payment amounts for initial enrollment year and renewal year compensation.

(7) Submit agent or broker marketing materials to CMS through HPMS prior to use, following the requirements for marketing materials in this subpart.

(8) Ensure beneficiaries are not charged marketing consulting fees when considering enrollment in Part D plans.

(9) Establish and maintain a system for confirming that:

(i) Beneficiaries enrolled by agents or brokers understand the product, including the rules applicable under the plan.

(ii) Agents and brokers appropriately complete Scope of Appointment records for all marketing appointments (including telephonic and walk-in).

(10) Demonstrate that marketing resources are allocated to marketing to the disabled Medicare population as well as to Medicare beneficiaries age 65 and over.

(11) Must comply with State requests for information about the performance of a licensed agent or broker as part of a state investigation into the individual's conduct. CMS will establish and maintain a memorandum of understanding (MOU) to share compliance and oversight information with States that agree to the MOU.

(12) Ensure that, prior to an enrollment CMS' required questions and topics regarding beneficiary needs in a health plan choice are fully discussed. Topics include information regarding pharmacies (that is, whether or not the beneficiary's current pharmacy is in the plan's network), prescription drug coverage and costs (including whether or not the beneficiary's current prescriptions are covered), premiums, and other services or incentives.

(d) Compensation requirements. Part D sponsors must ensure they meet the requirements in paragraphs (d)(1) through (5) of this section in order to pay compensation. These compensation requirements only apply to independent agents and brokers.

(1) General rules. (i) MA organizations may only pay agents or brokers who meet the requirements in paragraph (b) of this section.

(ii) Part D sponsors may determine, through their contracts, the amount of compensation to be paid, provided it does not exceed limitations outlined in this section.

(iii) Part D sponsors may determine their payment schedule (for example, monthly or quarterly). Payments (including payments for AEP enrollments) must be made during the year of the beneficiary's enrollment.

(iv) Part D sponsors may only pay compensation for the number of months a member is enrolled.

(2) Initial enrollment year compensation. For each enrollment in an initial enrollment year, Part D sponsors may pay compensation at or below FMV.

(i) Part D sponsors may pay either a full or pro-rated initial enrollment year compensation for:

(A) A beneficiary's first year of enrollment in any plan; or

(B) A beneficiary's move from an employer group plan to a non-employer group plan (either within the same parent organization or between parent organizations).

(ii) Part D sponsors must pay pro-rated initial enrollment year compensation for:

(A) A beneficiary's plan change(s) during their initial enrollment year.

(B) A beneficiary's selection of an “unlike plan type” change. In that case, the new plan would only pay the months that the beneficiary is enrolled, and the previous plan would recoup the months that the beneficiary was not in the plan.

(3) Renewal compensation. For each enrollment in a renewal year, Part D sponsors may pay compensation at an amount up to 50 percent of FMV.

(i) Part D sponsors may pay compensation for a renewal year:

(A) In any year following the initial enrollment year the beneficiary remains in the same plan; or

(B) When a beneficiary enrolls in a new “like plan type”.

(ii) [Reserved]

(4) Other compensation scenarios. (i) When a beneficiary enrolls in a PDP, the Part D sponsor may pay only the PDP compensation (and not compensation for MA enrollment under § 422.2274 of this chapter).

(ii) When a beneficiary enrolls in both a section 1876 Cost Plan and a stand-alone PDP, the 1876 Cost Plan sponsor may pay compensation for the cost plan enrollment and the Part D sponsor must pay compensation for the Part D enrollment.

(iii) When a beneficiary enrolls in a MA-only plan and a PDP, the MA plan may pay for the MA plan enrollment and the Part D sponsor may pay for the PDP enrollment.

(5) Additional compensation, payment, and compensation recovery requirements (Charge-backs). (i) Part D sponsors must retroactively pay or recoup funds for retroactive beneficiary changes for the current and previous calendar years. Part D sponsors may choose to recoup or pay compensation for years prior to the previous calendar year, but they must do both (recoup amounts owed and pay amounts due) during the same year.

(ii) Compensation recovery is required when:

(A) A beneficiary makes any plan change (regardless of the parent organization) within the first three months of enrollment (known as rapid disenrollment), except as provided in paragraph (d)(5)(iii) of this section.

(B) Any other time period a beneficiary is not enrolled in a plan, but the plan paid compensation based on that time period.

(iii) Rapid disenrollment compensation recovery does not apply when:

(A) A beneficiary enrolls effective October 1, November 1, or December 1 and subsequently uses the Annual Election Period to change plans for an effective date of January 1.

(B) A beneficiary's enrollment change is not in the best interests of the Medicare program, including for the following reasons:

(1) Other creditable coverage (for example, an employer plan).

(2) Moving into or out of an institution.

(3) Gain or loss of employer/union sponsored coverage.

(4) Plan termination, non-renewal, or CMS imposed sanction.

(5) To coordinate with Part D enrollment periods or the State Pharmaceutical Assistance Program.

(6) Becoming LIS or dually eligible for Medicare and Medicaid.

(7) Qualifying for another plan based on special needs.

(8) Due to an auto, facilitated, or passive enrollment.

(9) Death.

(10) Moving out of the service area.

(11) Non-payment of premium.

(12) Loss of entitlement or retroactive notice of entitlement.

(13) Moving into a 5-star plan.

(14) Moving from an LPI plan into a plan with three or more stars.

(iv)(A) When rapid disenrollment compensation recovery applies, the entire compensation must be recovered.

(B) For other compensation recovery, plans must recover a pro-rated amount of compensation (whether paid for an initial enrollment year or renewal year) from an agent or broker equal to the number of months not enrolled.

(1) If a plan has paid full initial compensation, and the enrollee disenrolls prior to the end of the enrollment year, the total number of months not enrolled (including months prior to the effective date of enrollment) must be recovered from the agent or broker.

(2) Example: A beneficiary enrolls upon turning 65 effective April 1 and disenrolls September 30 of the same year. The plan paid full initial enrollment year compensation. Recovery is equal to 6/12ths of the initial enrollment year compensation (for January through March and October through December).

(e) Payments other than compensation (administrative payments). (1) Payments made for services other than enrollment of beneficiaries (for example, training, customer service, agent recruitment, operational overhead, or assistance with completion of health risk assessments) must not exceed the value of those services in the marketplace.

(2) Administrative payments can be based on enrollment provided payments are at or below the value of those services in the marketplace.

(f) Payments for referrals. Payments may be made to individuals for the referral (including a recommendation, provision, or other means of referring beneficiaries), recommendation, provision, or other means of referring beneficiaries to an agent, broker or other entity for potential enrollment into a plan. The payment may not exceed $100 for a referral into an MA or MA-PD plan and $25 for a referral into a PDP plan.

(g) TPMO oversight. In addition to any applicable FDR requirements under § 423.505(i), when doing business with a TPMO, either directly or indirectly through a downstream entity, Part D sponsor must implement the following as a part of their oversight of TPMOs:

(1) When TPMOs is not otherwise an FDR, the Part D sponsor is responsible for ensuring that the TPMO adheres to any requirements that apply to the Part D sponsor.

(2) Contracts, written arrangements, and agreements between the TPMO and a Part D plan, or between a TPMO and a Part D plan's FDR, must ensure the TPMO:

(i) Discloses to the plan any subcontracted relationships used for marketing, lead generation, and enrollment.

(ii) Record all marketing, sales, and enrollment calls, including the audio portion of calls occurring via web-based technology, in their entirety.

(iii) Report to plans monthly any staff disciplinary actions or violations of any requirements that apply to the Part D sponsor associated with beneficiary interaction to the plan.

(iv) Use the TPMO disclaimer as required under § 423.2267(e)(41).

(3) Ensure that the TPMO, when conducting lead generating activities, either directly or indirectly for a Part D sponsor, must, when applicable:

(i) Disclose to the beneficiary that his or her information will be provided to a licensed agent for future contact. This disclosure must be provided:

(A) Verbally when communicating with a beneficiary through telephone;

(B) In writing when communicating with a beneficiary through mail or other paper; and

(C) Electronically when communicating with a beneficiary through email, online chat, or other electronic messaging platform.

(ii) When applicable, disclose to the beneficiary that he or she is being transferred to a licensed agent who can enroll him or her into a new plan.

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.