CMS updates Medicare Advantage commissions for 2025 -- again

In a lightning-fast move (well, in government terms, at least), the Centers for Medicare and Medicaid Services have released an updated memo outlining agent/broker commission schedules for Contract Year 2025. This comes hot on the heels of a federal court placing a stay on portions of the final rule related to agent/broker compensation in the Medicare Advantage market. 

In the CY2025 final rule, the agency had altered the definition of compensation to include administrative fees, such as the ones agents might have earned for completing a Health Risk Assessment, or in the form of marketing dollars. To offset this lost income for agents, the agency previously included a one-time $100 increase for new Medicare Advantage enrollments and a $50 increase for renewal enrollments. This increase was paired with the regular annual adjustment in Fair Market Value.

The new memo removes that $100 increase, and instead, only applies the regularly scheduled annual adjustment in Fair Market value. The increase amounts to about 2.4%. The updated Medicare Advantage commissions are pictured below:

Referral fees remain unchanged at $100 for Medicare Advantage plans and $25 for prescription drug plans.

So what now?

Well, we wait and see. The Department of Health and Human Services (which oversees CMS), and the parties to the Texas lawsuit are due back in court later this month. However, the stay is in place throughout the entire case, including any appeals filed by both parties. That means the implementation of the agent/broker compensation rules and the outlawing of some contract provisions between carriers and downstream entities could be on hold for some time. There's also, of course, the possibility that these rules get struck down.

Until the final decision comes down, it appears the industry is playing under the rules in effect for CY2024. But, we should remember that marketing dollars in the form of co-ops and other programs, payments for HRA completion, and other administrative reimbursements have always been at each carrier's discretion, and appear to remain so for now. Whether they are put back in place for the upcoming AEP, we will have to wait and see, as carriers will make those decisions based on what they have built into their CY2025 bids

But here's what we do know. 

The regulations make clear, just as they always have, that no organization can pay an agent/broker anything above the Fair Market Value for Medicare Advantage and PDP enrollments. Organizations, whether carriers or other field marketing organizations that do pay above and beyond Fair Market Value risk running afoul of federal anti-kickback laws. They also risk not only their books of business, but those of the health insurance agents under them.

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Need to see it for yourself? Read the memo here.