Medicare Planning New Action on Commissions for Managed Care Plans
CMS officials on Friday said that the agency likely will take regulatory action this week to address concerns about commissions that some insurers plan to pay their agents for enrolling beneficiaries in Medicare Advantage plans, the AP/Miami Herald reports (Freking, AP/Miami Herald, 10/24).
On Sept. 15, CMS issued new rules governing insurance companies, agents and brokers regarding the marketing of Medicare prescription drug plans and MA plans.
The rules stipulate, among other things, that commission for sales agents will be required to conform to a structure used in other parts of the insurance industry. First-year commission for a new customer cannot exceed 200% of the commission for the next five years, in order to remove the incentive for agents to "churn" beneficiaries between different plans each year.
However, because the regulations are just taking effect, some plans now are reportedly increasing commissions in order to lock them in for the next five years.
In a letter to CMS, House Ways and Means Subcommittee on Health Chair Pete Stark (D-Calif.) wrote, "I am gravely concerned that without immediate action ... these elevated commissions will lead to an unprecedented amount of churning of beneficiary enrollment this year, in a way that is disruptive to their care and detrimental to their coverage" (California Healthline, 10/24).
Acting CMS Administrator Kerry Weems said, "We will address concern and expect to take regulatory action next week," adding, "CMS is strongly suggesting that plans keep this in mind as they contemplate making any final arrangements regarding commission structures."
Weems did not discuss what possible regulatory changes could be made.
Karen Ignagni, president and CEO of America's Health Insurance Plans, said, "We support CMS acting in this area and believe clear and consistent standards are necessary."
Humana spokesperson Tom Noland said, "Nine months ago, we called for capping commissions and total compensation paid to contracted agents and brokers. Consistent with our position, we support Chairman Stark's proposal."
A statement issued by the UnitedHealth Group subsidiary Ovations stated, "We would also welcome regulation that establishes reasonable industry-wide broker commission norms" (AP/Miami Herald, 10/24).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.