Medicare program managers want to give health insurers more flexibility over pay for agents and brokers.
Officials at the Centers for Medicare and Medicaid Services (CMS) have proposed lifting the current $100 limit on Medicare Advantage plan enrollment fees.
Instead, an insurer would have to keep a producer’s total Medicare plan sales compensation under the “fair market value” compensation limit for the year. This year, for example, the annual producer compensation limit for a Medicare Advantage plan enrollment in most of the country is $510 for a new sale and $255 for a renewal sale.
- A link to a preview version of the proposed regulations is available here.
- Links to Medicare Communications & Marketing Guidelines documents are available here.
- An article about Medicare Advantage plan agent and broker compensation summary data is available here.
The proposed change would also apply to producer compensation for sales of Medicare Part D prescription drug plans.
CMS would lift the prescription drug plan referral fee limit, which is now $25.
Instead, a Medicare drug plan issuer would have to keep all producer compensation for a sale, including referral fee payments, under the fair market value limit, which is $78 per year for a new sale, and $39 per year for a renewal sale.
CMS announced the proposal last week, in an 895-page packet of Medicare program draft regulations and regulation notes.
Along with the producer comp provisions, the packet includes:
- Rules related to fighting opioid abuse.
- Rules governing the creation of new Medicare plan options for people with severe kidney disease.
- An effort to increase the importance of patient ratings and patient complaints in the Medicare Advantage and Medicare drug plan quality rating programs.
- A rule that will let a Medicare Advantage plan make some of use of telehealth services providers to meet provider network adequacy standards for enrollee access to dermatologists, cardiologists, neurologists, ear doctors, and psychiatrists.
- A requirement that each Medicare drug plan issuer offer a ”beneficiary real-time benefit tool” by Jan. 1, 2022.
The real-time benefit tool would give a drug plan enrollee a simplified version of the drug benefits information that the enrollee’s doctor sees.
CMS is preparing to publish the packet in the Federal Register, the government’s official rulemaking publication, Feb. 18.
Comments on the draft regulations are due April 6.
The Medicare Part A program covers enrollees inpatient hospital bills.
The Medicare Part B program pays physician and outpatient services bills.
Medicare Part C lets private insurers offer consumers alternatives to using Original Medicare Part A and Part B coverage as is. The biggest Medicare Part C program, the Medicare Advantage program, provides access to plans that look somewhat like employer-sponsored health maintenance organization, preferred provider organization and fee-for-service plans.
The Medicare Part D program lets private plans offer Medicare enrollees prescription drug coverage.
Medicare Producer Compensation
CMS uses the terms “referral fee” and “finder’s fee” to refer to money paid to an agent or broker in exchange for the producer’s help with locating someone who needs Medicare coverage, without the producer having to complete a sale.
CMS officials say in the introduction to the new draft regulations that CMS uses the term “compensation” to refer to commissions, bonuses, gifts, prizes, awards, and referral or finder fees.
“By eliminating the individual referral fee limit, we are restructuring the regulation to only provide for referral fees within the scope of fair market value,” officials say.
Officials acknowledge that efforts to regulate referral fees generated a great deal of discussion in 2009, when they were developing the official Medicare Advantage “call letter” for 2010.