On Friday, December 4, the Centers for Medicare and Medicaid Services sent a clear message to state departments of insurance: You have no power here in the realm of MAPD commissions.
Throughout this fall's Annual Election Period (and last year's for that matter), carriers have made sudden adjustments to their offerings. Some carriers have pulled some or all of their portfolio from electronic enrollment platforms. And, some plans suddenly saw their new-to-Medicare, renewal, or both commissions drop to $0.
In response, industry groups like NABIP complained to state Departments of Insurance (DOI). Six states -- Delaware, Idaho, Montana, New Hampshire, North Dakota, and Oklahoma -- warned the MAPD carriers operating within them that commission cuts and removals from enrollment platforms could amount to unfair trade practices. Other states, like Mississippi, North Carolina, and South Carolina, have issued similar warnings but haven't taken as strong a public stance.
In the December 4 memo, CMS reminds states that the Social Security Act and relevant CMS rulemaking preempts any state's efforts to regulate agent and broker compensation, communication and marketing, or enrollment standards. In short, CMS asked states to stay in their own lane.
CMS went on to explain it has sole authority to regulate compensation in this market. And, as part of that authority, it requires carriers to submit compensation ranges on an annual basis. Those ranges, by definition, include a minimum (which may be $0) and a maximum (up to that year's Fair Market Value).
Interestingly, CMS says that:
"MA compensation payments, provided they are within the range of their submissions, are a matter of negotiation between the MA organization and its first tier, downstream, and related entities, including agents and brokers."
When was the last time a carrier negotiated MAPD commissions with you?
State DOIs also claimed that pulling plans from enrollment portals amounted to steering -- and therefore a violation of Medicare marketing and communication guidelines. CMS hummed a familiar tune, again reminding states they have the sole regulatory authority here.
As for enrollment forms themselves, CMS was carefully noted enrollment forms need only be available on carrier websites. In practice, carriers have no obligation to have their plans listed in tools like SunFire or HealthSherpa for Medicare.
Both in its CY2027 proposed Medicare rule and at the end of this memo, CMS does ask for additional feedback on the Medicare program overall -- especially as they consider additional regulation on agent and broker compensation.
This seems like an excellent time to remind you to comment on this rule through January 26.