On November 6, 2023, CMS (Centers for Medicare and Medicaid Services) released proposed rulemaking for contract year 2025. But this time around, CMS discusses changes to agent and broker compensation structures so radical that they could change your business relationships going forward.
The Current Scenario
It bears repeating here: beneficiaries depend on insurance agents and brokers to help them compare coverage options. You play a crucial role in guiding clients toward the best choices for their healthcare needs. That’s why CMS has imposed limits on the compensation you can receive for enrolling individuals in MA and PDP plans. The intent has always been to encourage meeting client needs above all else.
However, CMS has noticed some MA and PDP plans, along with the third-party entities they contract with (such as Field Marketing Organizations or FMOs), have found ways to structure payments in a way that skirts these compensation caps. This allows their agents to pocket a bit more profit from those plans or FMOs, tipping the scales toward those entities. That’s the target: agents motivated by higher compensation may steer beneficiaries into ill-fitting plans.
The proposed rulemaking suggests some significant changes:
Prohibition of Interference: CMS wants to prohibit contract terms between MA organizations and agents, brokers, or third-party marketing organizations that could interfere with your ability to objectively assess and recommend the best plan for your clients. Things like volume-based enrollment goals are the target here.
Single Compensation Rate: A single compensation rate is in the running for all plans, eliminating current variations. The rate would cover all activities related to the enrollment, including things like health risk assessments.
Elimination of Administrative Payments: The current framework allowing separate payments to agents and brokers for administrative services may also be eliminated.
Why This Matters
The proposed changes are sending a message: stay genuinely focused on your clients' healthcare needs. Don’t get sidetracked with compensation above the allowed amounts. It's all about promoting fair, open, and competitive markets, so beneficiaries can make well-informed choices among a robust set of health insurance options.
We'll be keeping a close eye on these developments, and it's vital for you to do the same. Stay informed, ensure you're compliant with the evolving rules, and most importantly, continue to prioritize your clients' best interests. And if in the future, you find yourself in need a of change, you know where to find us.