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New CMS Rule Limits Selling and Reselling Consumer Data

As part of the Centers for Medicare & Medicaid Services (CMS) recently released updates, brokers and agents will have to take stronger precautions with customer data, especially when it comes to using that information with marketing companies.

According to CMS, some third-party marketing organizations have been selling and reselling personal beneficiary data, subverting rules that were designed to protect Medicare-eligible consumers from receiving aggressive marketing tactics for Medicare Advantage and Part D plans.

“Individuals may be unaware that by placing a call or clicking on a generic-looking web link, they are unwittingly agreeing and providing consent for their personal beneficiary data to be collected and sold to other entities for future marketing activities,” CMS said in its final rule, released on April 4.

To curb the concern, CMS has made it a requirement that beneficiaries must now give express, written consent that personal data collected by a TPMO for marketing or enrolling into a Medicare Advantage or Part D plan can be shared with other TPMOs.

“The TPMO must obtain this written consent through a transparent, and prominently placed, disclosure from the individual to share the information and be contacted for marketing or enrollment purposes, separately for each TPMO that receives the data; i.e., one-to-one consent, which is generally consistent with Federal Trade Commission (FTC) and Federal Communications Commission (FCC) regulations,” the new rule says.

CMS Rule Follows FCC Rule

Nearly identical changes were announced by the FCC in late 2023, when a new rule was passed in an effort to close loopholes that have allowed robocallers and robotexters to “inundate consumers.” That law, projected to go into effect in August or September 2024, will force comparison-shopping websites and lead generators to obtain consumer consent “one seller at a time.”

While the FCC’s initiative was put in place to protect consumers, it could present enormous challenges for insurance agents and brokers who rely on lead generation for business growth. In order to comply with the rule, lead generators are likely to increase costs significantly to remain in compliance.

Finding Opportunities in Change

While the new rule presents challenges for TPMOs, along with agents and brokers, it also offers opportunities for proactive and adaptable agents and brokers. Here are some ideas to continue growth through the changes:

  • Utilize your marketing reimbursements and co-op opportunities: Ensure that you are working with Agility to utilize all your marketing reimbursements and partner up with Luminos Creative, Agility’s partner ad agency, which specializes in health insurance.
  • Invest in Direct Outreach: Focus on building relationships and referrals through personalized communication channels like email or social media.
  • Highlight Expertise and Value: Demonstrate your knowledge and understanding of specific client needs to stand out from the crowd.
  • Embrace Technology: Be on the lookout for companies that work to become compliant lead generation platforms. These companies will adjust to the new rule and will find ways to continue delivering leads to agencies and brokers.
  • Advocate for Fair Regulations:  Engage with industry associations and regulators to ensure the new rule considers the specific needs of health insurance agents.

Grow with Agility in 2024!

Agility is constantly updating our agent partners on changes in the health insurance industry, including new federal rules, so that you have the best information available to help your clients. We offer top commissions, training, administrative support, and many other services to help you succeed. Find out how to partner with Agility by contacting us at 866-590-9771.

This information is confidential and intended solely for broker use. Distribution to Medicare beneficiaries is not permitted.