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CMS Final Rule for MA/part D overrides

wehotex

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Many individuals with Medicare rely on agents and brokers to help navigate complex Medicare choices as they comparison shop for coverage options. The Medicare statute requires that CMS must establish guidelines to ensure that the use of compensation creates incentives for agents and brokers to enroll individuals in the Medicare Advantage or Part D plan intended to best meet the prospective enrollee’s health care needs. However, excessive compensation, and other bonus arrangements, offered by plans to agents and brokers can result in individuals being steered to some Medicare Advantage and Part D plans over others based on the agent or broker’s financial interests, rather than the prospective enrollee’s health care needs.

CMS is cracking down on that. Specifically, CMS is finalizing requirements that redefine “compensation” to set a clear, fixed amount that agents and brokers can be paid regardless of the plan the individual enrolls in, addressing loopholes that result in commissions above this amount that create anti-competitive and anti-consumer steering incentives. The provisions of this final rule, which are applicable beginning with the upcoming Annual Enrollment Period, ensure that agent and broker compensation reflect only the legitimate activities required of agents and brokers, by broadening the scope of the regulatory definition of “compensation,” so that it is inclusive of all activities associated with the sales to/enrollment of an individual into a Medicare Advantage or Part D plan. In response to feedback from stakeholders, CMS is increasing the final national agent/broker fixed compensation amount for initial enrollments into a Medicare Advantage or Part D plan by $100, which is an amount higher than what was proposed ($31). CMS believes this increase will provide agents and brokers with sufficient funds to serve individuals with Medicare. This increase will eliminate variability in payments and improve the predictability of compensation for agents and brokers. This increase will be added to agent and broker compensation payments for the Annual Election Period in Fall 2024 and applied to all enrollments effective in CY2025 and future contract years.
 
Many individuals with Medicare rely on agents and brokers to help navigate complex Medicare choices as they comparison shop for coverage options. The Medicare statute requires that CMS must establish guidelines to ensure that the use of compensation creates incentives for agents and brokers to enroll individuals in the Medicare Advantage or Part D plan intended to best meet the prospective enrollee’s health care needs. However, excessive compensation, and other bonus arrangements, offered by plans to agents and brokers can result in individuals being steered to some Medicare Advantage and Part D plans over others based on the agent or broker’s financial interests, rather than the prospective enrollee’s health care needs.

CMS is cracking down on that. Specifically, CMS is finalizing requirements that redefine “compensation” to set a clear, fixed amount that agents and brokers can be paid regardless of the plan the individual enrolls in, addressing loopholes that result in commissions above this amount that create anti-competitive and anti-consumer steering incentives. The provisions of this final rule, which are applicable beginning with the upcoming Annual Enrollment Period, ensure that agent and broker compensation reflect only the legitimate activities required of agents and brokers, by broadening the scope of the regulatory definition of “compensation,” so that it is inclusive of all activities associated with the sales to/enrollment of an individual into a Medicare Advantage or Part D plan. In response to feedback from stakeholders, CMS is increasing the final national agent/broker fixed compensation amount for initial enrollments into a Medicare Advantage or Part D plan by $100, which is an amount higher than what was proposed ($31). CMS believes this increase will provide agents and brokers with sufficient funds to serve individuals with Medicare. This increase will eliminate variability in payments and improve the predictability of compensation for agents and brokers. This increase will be added to agent and broker compensation payments for the Annual Election Period in Fall 2024 and applied to all enrollments effective in CY2025 and future contract years.
Overall, it seems like a HUGE PLUS if you are with a crappy FMO (60% of agents) and questionable if with a hierarchy that gives support. No more HRAs, overrides, marketing $. ALL Agents would be on equal footing.
It mentions “initial enrollments” of MAPD ***AND*** PDPs would go UP by $100. That is much more than the proposed $31.
I’m not clear on what the FMV would be for 2025? Would it be lowered or stay on par with what we have now?
 
Goodbye to support and who will now contract agents and pay for MedicareCenter/Integrity?

The CMS Medicare Rules for 2024-2026 include a one-time $100 increase to the Fair Market Value (FMV) compensation rate for agents and brokers for initial enrollments into Medicare Advantage (MA) plans for the 2025 plan contract year. This increase is in addition to the base compensation rates, with the intention of reimbursing agents and brokers for necessary administrative activities. Specifically, for 2024, the initial enrollment compensation is $611, which will see a $100 increase in 2025, and renewal compensation starts at $305, adjusting to 50% of the FMV in subsequent years.

This policy aims to cover necessary administrative tools and training, offset appointment fees, and encourage the representation of multiple plans, thereby ensuring adequate service to Medicare beneficiaries.

How does this affect FMO-IMOs?

The changes in broker compensation will impact Field Marketing Organizations (FMOs) significantly. The rules establish a single, increased compensation rate for all plans, updated annually, which will generally prohibit contracts that might interfere with an agent’s or broker’s ability to objectively assess and recommend the plan that best fits a beneficiary’s health care needs.

This adjustment to the compensation structure will require FMOs to adapt to the increased standardized compensation rates and ensure that their payment arrangements with agents and brokers comply with the new regulatory framework.

Furthermore, the rules eliminate the regulatory framework that currently allows for separate payment to agents and brokers for administrative services, a practice that FMOs might have used to provide additional compensation to agents and brokers outside of the caps set by CMS. This means FMOs will need to review and possibly adjust their compensation models to ensure they are in compliance with the new rules, which are designed to limit the ability to circumvent compensation caps through separate payments for administrative services or other means.

Overall, these changes are aimed at creating a more transparent and equitable compensation system that aligns the incentives of agents, brokers, and FMOs with the best interests of Medicare beneficiaries. FMOs will need to carefully navigate these new rules to continue operating effectively within the Medicare Advantage and Part D markets.

Moreover, starting with the contract year 2023, Medicare Advantage Organizations (MAOs) are limited to the compensation amounts outlined in the regulations, reflecting a commitment to regulate compensation more strictly to align agents' and brokers' incentives with beneficiaries' health care needs.

The policy encompasses a broader aim to ensure that compensation creates incentives for agents and brokers to enroll individuals in the MA plan that best meets their health care needs, as mandated by statutory obligations. The rules also address the need for a regulatory distinction between agents employed by call centers and those who are truly independent, recognizing the diverse roles and compensation structures within the industry.
Holy Cow Batman...!!!
[EXTERNAL LINK] - Contract Year 2025 Medicare Advantage and Part D Final Rule (CMS-4205-F) | CMS

werewolf0433_money_swirling_down_a_drain_cinematic_79571ea0-9657-41fc-a20b-8d69d94b30a7.png
 
Goodbye to support and who will now contract agents and pay for MedicareCenter/Integrity?

The CMS Medicare Rules for 2024-2026 include a one-time $100 increase to the Fair Market Value (FMV) compensation rate for agents and brokers for initial enrollments into Medicare Advantage (MA) plans for the 2025 plan contract year. This increase is in addition to the base compensation rates, with the intention of reimbursing agents and brokers for necessary administrative activities. Specifically, for 2024, the initial enrollment compensation is $611, which will see a $100 increase in 2025, and renewal compensation starts at $305, adjusting to 50% of the FMV in subsequent years.

This policy aims to cover necessary administrative tools and training, offset appointment fees, and encourage the representation of multiple plans, thereby ensuring adequate service to Medicare beneficiaries.

How does this affect FMO-IMOs?

The changes in broker compensation will impact Field Marketing Organizations (FMOs) significantly. The rules establish a single, increased compensation rate for all plans, updated annually, which will generally prohibit contracts that might interfere with an agent’s or broker’s ability to objectively assess and recommend the plan that best fits a beneficiary’s health care needs.

This adjustment to the compensation structure will require FMOs to adapt to the increased standardized compensation rates and ensure that their payment arrangements with agents and brokers comply with the new regulatory framework.

Furthermore, the rules eliminate the regulatory framework that currently allows for separate payment to agents and brokers for administrative services, a practice that FMOs might have used to provide additional compensation to agents and brokers outside of the caps set by CMS. This means FMOs will need to review and possibly adjust their compensation models to ensure they are in compliance with the new rules, which are designed to limit the ability to circumvent compensation caps through separate payments for administrative services or other means.

Overall, these changes are aimed at creating a more transparent and equitable compensation system that aligns the incentives of agents, brokers, and FMOs with the best interests of Medicare beneficiaries. FMOs will need to carefully navigate these new rules to continue operating effectively within the Medicare Advantage and Part D markets.

Moreover, starting with the contract year 2023, Medicare Advantage Organizations (MAOs) are limited to the compensation amounts outlined in the regulations, reflecting a commitment to regulate compensation more strictly to align agents' and brokers' incentives with beneficiaries' health care needs.

The policy encompasses a broader aim to ensure that compensation creates incentives for agents and brokers to enroll individuals in the MA plan that best meets their health care needs, as mandated by statutory obligations. The rules also address the need for a regulatory distinction between agents employed by call centers and those who are truly independent, recognizing the diverse roles and compensation structures within the industry.
Holy Cow Batman...!!!
[EXTERNAL LINK] - Contract Year 2025 Medicare Advantage and Part D Final Rule (CMS-4205-F) | CMS

werewolf0433_money_swirling_down_a_drain_cinematic_79571ea0-9657-41fc-a20b-8d69d94b30a7.png

I thought that the $31 amount would apply to renewing amounts, not “Initial” as in T65?
1/2 of $31 per app (renewing) would not have made a dent in the added independent broker costs.

If the new FMVs are decent, this could attract many more brokers? Couldn’t it ? But just WHO would train them and keep them compliant? High Quality FMOs do fulfill that need, but goodbye to the middlemen who actively compete and sell against their agents who are bumping up their comp levels.
 
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They didn’t address marketing money but it says no money outside the total agent comp. I’m assuming no fmo or company can give the agent less and pocket that ?
 
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