Marketing to Medicaid patients: the inducement law, managed care plan rules and what your practice can say

A practice that takes Medicaid works under two sets of marketing rules at once. The first applies to the practice itself: what it may give patients, what it may say about cost, and how it may use the word Medicaid. The second applies to the managed care plans the practice contracts with, and it reaches the practice when the practice speaks for a plan, hands out a plan’s flyer or tells patients which plan to pick. On top of both sit the state Medicaid agency’s own rules and the plan contracts, which are set state by state.

This guide covers the Medicaid side. The beneficiary inducement law, the OIG nominal value policy, its exceptions and free rides are covered in depth in our guide to marketing to Medicare patients, and the same law applies to Medicaid, so this guide links there instead of repeating it. Health center sliding fee programs are covered in our guide to community health center marketing, language access in our guide to Spanish language medical marketing, and the insurance page on your own website in our guide to insurance accepted pages and provider directories. For help with Medicaid applications and renewals, certified application counselors and Marketplace enrollment, see our guide to helping patients with marketplace and Medicaid enrollment. Medicaid sterilization consent timing affects how vasectomy is advertised; see vasectomy clinic marketing.

Two sets of rules: the practice’s and the plan’s

States run Medicaid in part through managed care plans. The federal rules for those plans are in 42 CFR part 438, and 42 CFR 438.2 defines the plan types the rules name: managed care organizations (MCOs), prepaid inpatient health plans (PIHPs), prepaid ambulatory health plans (PAHPs) and primary care case management arrangements (PCCMs and PCCM entities). A practice that has a network provider agreement with one of these plans and receives Medicaid funding to order, refer or render covered services through it is a network provider under the same section.

The marketing rule for plans is 42 CFR 438.104. It works through the contract between the state and the plan: each contract must require the plan to follow the marketing limits. Your practice’s own ads are not plan marketing. They fall under the federal laws that apply to any practice billing Medicaid, covered below, and under your state’s Medicaid rules and your plan contracts.

Gifts and offers: the inducement law covers Medicaid patients

The beneficiary inducement law, 42 U.S.C. 1320a-7a(a)(5), allows civil monetary penalties against a person who offers or transfers remuneration to anyone eligible for Medicare or for a State health care program, when the person knows or should know it is likely to influence that individual to order or receive covered items or services from a particular provider, practitioner or supplier. 42 U.S.C. 1320a-7(h) defines State health care program to include a State plan approved under title XIX, which is Medicaid, and a State child health plan approved under title XXI, which is CHIP.

So a gift card for booking, a raffle for new patients or a free item for switching practices raises the same questions for Medicaid patients as for Medicare patients. The nominal value figures, the regulatory exceptions and the free ride rules are explained in our Medicare patients guide, and they are not repeated here.

One part of the law matters for cost messaging. Under 42 U.S.C. 1320a-7a(i)(6)(A), waiving cost sharing falls outside the definition of remuneration only if the waiver is not offered as part of any advertisement or solicitation, is not routine, and follows a good faith finding of financial need or reasonable collection efforts. An ad that promises to waive Medicaid copays fails the first condition on its face.

What you can say about cost

42 CFR 447.15 requires the state plan to limit Medicaid participation to providers who accept, as payment in full, the amounts paid by the Medicaid agency plus any deductible, coinsurance or copayment the plan requires the individual to pay. Your marketing should not suggest that a Medicaid patient will pay more than that for covered services.

The same section says a provider may deny services on account of an individual’s inability to pay cost sharing only as allowed by 42 CFR 447.52(e), and that inability to pay does not erase the patient’s liability for the charge. A line such as “no one is turned away” or “no cost to you” is a promise about both. Write cost lines from what your provider agreement and the state’s cost sharing rules actually say, and ask counsel before you advertise any charge to Medicaid patients for services outside Medicaid coverage, since what may be charged and how the patient must be told are set state by state.

When your practice talks about a Medicaid managed care plan

Under 42 CFR 438.104(a), marketing means any communication from a plan to a Medicaid beneficiary who is not enrolled in that plan that can reasonably be interpreted as intended to influence the beneficiary to enroll in that plan’s Medicaid product, or not to enroll in or to disenroll from another plan’s Medicaid product. Marketing materials are materials produced in any medium by or on behalf of a plan that can reasonably be interpreted as intended to market it to potential enrollees. The same paragraph says the plan includes any of the plan’s employees, network providers, agents or contractors.

CMS addressed providers directly in the 2016 final rule. Asked to let agents, brokers and providers market for plans, CMS answered that because 438.104(a) includes network providers, any person or entity that meets the definition is subject to 438.104 and may only conduct marketing activities on behalf of the plan consistent with its requirements, including state approval (81 FR 27498, May 6, 2016).

Under 42 CFR 438.104(b), each plan contract must provide that the plan does not distribute any marketing materials without first obtaining state approval, distributes materials to its entire service area as set in the contract, does not seek to influence enrollment in conjunction with the sale or offering of any private insurance, and does not, directly or indirectly, engage in door-to-door, telephone, email, texting or other cold-call marketing. The contract must also specify how the plan ensures its marketing is accurate and does not mislead, confuse or defraud beneficiaries or the state. The rule lists as misleading any statement that the beneficiary must enroll in the plan to obtain benefits or to not lose benefits, and any statement that the plan is endorsed by CMS, the federal or state government or a similar entity.

For CHIP, 42 CFR 457.1224 requires the state to apply the same marketing requirements to CHIP managed care plans through their contracts, except the state agency review step in 438.104(c).

In practice, this means four things for a practice. A flyer or poster a plan sends you to display is the plan’s marketing material, so ask the plan to confirm in writing that the state approved it before you put it up. A call, email or text from your office urging Medicaid patients to join or leave a particular plan can be indirect cold-call marketing for that plan, so do not run one without the plan’s written confirmation and counsel review. Wording from your office that a patient must join a plan to keep their benefits, or that a plan is government endorsed, is the kind of statement the rule calls misleading. And if a plan offers your practice anything of value for steering patients to enroll, that is a question for counsel under the Anti-Kickback Statute, 42 U.S.C. 1320a-7b(b), which covers Federal health care programs, defined in subsection (f) to include State health care programs. Our guide to patient and physician referrals covers that law in more detail.

A factual list of every Medicaid plan you are in network with, on your insurance page, helps patients check where you are covered. Keep it factual and complete, and ask the plan in writing before you add anything that compares plans, ranks them or urges a choice, since that is where a page can start to read as intended to influence enrollment.

Your listing in the plan’s provider directory

A Medicaid enrollee looking for a practice can start in the plan’s provider directory. Under 42 CFR 438.10(h)(1), each plan must make available, in paper form on request and in searchable electronic form, the following about its network providers: name and group affiliation, street address, telephone number, website URL as appropriate, specialty as appropriate, whether the provider will accept new enrollees, cultural and linguistic capabilities including languages and American Sign Language offered by the provider or a skilled medical interpreter at the office, whether the office has accommodations for people with physical disabilities including offices, exam rooms and equipment, and whether the provider offers covered services via telehealth.

Under 438.10(h)(3), an electronic directory must be updated no later than 30 calendar days after the plan receives updated provider information, and a paper directory monthly or quarterly depending on whether the plan has a mobile-enabled electronic directory. Paragraph (j) says states were not held out of compliance with the current (h)(1) list, including the telehealth item, before July 1, 2025.

The plan can only publish what it receives. When your practice stops or starts accepting new Medicaid patients, adds a language, adds an interpreter arrangement, changes accessibility features or starts offering telehealth, send the update to each plan through its provider update process, and change your own website and listings on the same day so they match. Check your Google Business Profile against the same fields, so a patient finds the same answer in the plan directory, on your site and in search.

Using the word Medicaid in your ads

42 U.S.C. 1320b-10(a)(1) prohibits using the words Medicaid, Medicare, Centers for Medicare & Medicaid Services, CMS, HHS and related terms, or the symbols or emblems of those agencies, in any advertisement, solicitation or other communication, including Internet and other electronic communications, in a manner that the person knows or should know would convey, or that reasonably could be interpreted as conveying, the false impression that the item is approved, endorsed or authorized by those agencies, or that the person has some connection with or authorization from them.

A factual line that your practice accepts Medicaid and the plans listed on your insurance page states a fact. A layout that imitates a state or federal notice, an agency style emblem, or wording that suggests the government recommends your practice is where the statute is aimed. The Medicare side of this rule, with examples, is in our Medicare patients guide.

Claims, language and access

Health claims in a Medicaid campaign follow the same standard as any other. Under 15 U.S.C. 45(a)(1), unfair or deceptive acts or practices in or affecting commerce are unlawful, and the FTC’s Health Products Compliance Guidance says health benefit claims need competent and reliable scientific evidence, including claims implied by images and context.

The directory rule asks plans to list languages and accessibility because enrollees need them. Language access duties for practices are covered in our Spanish language marketing guide, and website accessibility in our guide to website accessibility for medical practices.

Illustration: a pediatric practice joins a new Medicaid plan

Illustration: a pediatric practice signs a network provider agreement with a Medicaid managed care plan that has just entered its area. The plan offers a box of enrollment flyers for the waiting room and suggests the practice text its Medicaid families to say the practice is now in network. The practice asks the plan to confirm in writing that the state approved the flyer before displaying it. It does not send the text, since a message from the office urging families to enroll in one plan can be the plan’s indirect cold-call marketing; instead it adds the new plan to the factual list of every Medicaid and CHIP plan it accepts on its insurance page, without comparing plans. It sends the plan its accepting new patients status, the languages its staff and interpreter service cover, its accessible exam room and its telehealth visits, and updates its website and Google Business Profile the same day. Its back-to-school ad says the practice accepts Medicaid and CHIP plans listed on its website, makes no promise that visits cost nothing, and does not use any agency emblem. Counsel reviews the ad and the flyer before either goes out.

Checklist

• No gift, raffle, gift card or free item aimed at winning Medicaid or CHIP patients without checking the inducement law and its exceptions (42 U.S.C. 1320a-7a(a)(5); 1320a-7(h)).
• No advertised waiver of Medicaid copays or other cost sharing (42 U.S.C. 1320a-7a(i)(6)(A)).
• Cost lines match payment in full for covered services and your state’s cost sharing rules (42 CFR 447.15).
• Plan flyers and posters are displayed only after the plan confirms in writing that the state approved them (42 CFR 438.104(b)(1)(i)).
• No calls, emails or texts from your office urging Medicaid patients to join or leave a particular plan without plan confirmation and counsel review (42 CFR 438.104(a), (b)(1)(v); 81 FR 27498).
• No wording that a patient must join a plan to keep benefits, or that a plan is government endorsed (42 CFR 438.104(b)(2)).
• Nothing of value accepted from a plan for steering enrollment without counsel review (42 U.S.C. 1320a-7b(b), (f)).
• Directory fields (accepting new patients, languages, accessibility, telehealth) sent to every plan and matched on your website and listings (42 CFR 438.10(h)).
• No agency names, emblems or notice style layouts that suggest government approval (42 U.S.C. 1320b-10).
• Health claims have competent and reliable scientific evidence (15 U.S.C. 45; FTC Health Products Compliance Guidance).

How we help

We build websites, local search, Google Ads and AI front desk tools for independent practices. For a practice that takes Medicaid, we can build a factual insurance page on your medical website that lists every plan you accept, keep your website and listings in step with the directory updates you send to plans, and write ads that state coverage without agency style imagery or cost promises. We do not decide what your plan contracts allow; those questions go to the plan and your attorney. Our AI front desk is built with HIPAA in mind. We confirm in writing what a BAA covers before any patient information flows through a tool, and if it is not covered, we do not route patient information through it. We do not sell lead lists and do not pay for referrals. For the wider set of rules we follow, see our healthcare marketing rules hub.

Sources

• 42 CFR 438.104: Marketing activities (Medicaid managed care)
• CMS final rule: Medicaid and CHIP Managed Care, 81 FR 27498 (May 6, 2016), response on 438.104 and network providers
• 42 CFR 438.2: Definitions (MCO, PIHP, PAHP, PCCM, network provider)
• 42 CFR 438.10: Information requirements (paragraph (h), provider directory, and (j), applicability)
• 42 CFR 457.1224: Marketing activities (CHIP managed care)
• 42 CFR 447.15: Acceptance of State payment as payment in full
• 42 U.S.C. 1320a-7a: Civil monetary penalties (subsection (a)(5), beneficiary inducements, and (i)(6), definition of remuneration)
• 42 U.S.C. 1320a-7: Exclusion of certain individuals and entities (subsection (h), State health care program defined)
• 42 U.S.C. 1320a-7b: Criminal penalties for acts involving Federal health care programs (subsections (b) and (f))
• 42 U.S.C. 1320b-10: Prohibition of misuse of symbols, emblems, or names in reference to Social Security or Medicare
• 15 U.S.C. 45: Unfair methods of competition unlawful; prevention by Commission
• FTC: Health Products Compliance Guidance (December 2022)

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