I suppose you can disregard updates 1-3, read on. . .
This started with Rep Pete Stark’s letter to Kerry Weems. Here is the article:
“Rep. Pete Stark (D-CA), chairman of the House Ways and Means Health Subcommittee, called on the” Centers for Medicare & Medicaid Services (CMS) “to cap Medicare Advantage sales commissions after reports that some health plans are paying higher broker commissions in a move he said runs counter to new federal regulations.” As of September, commissions are required to “stay the same over five years.” Rep. Stark contended, however, that “some health plans are offering commissions four times higher than they have in previous years” in a letter to acting CMS Administrator Kerry Weems. By “paying a higher amount in upfront commissions,” he added, a broker “stands to make much more over five years.”
Last night, United HealthCare issued a press release supporting further regulation of broker commissions. Here is the quote from United HealthCare:
“We welcome further action by CMS to regulate broker commissions. Earlier this year we voiced support before the Senate Finance Committee in favor of regulation to levelize broker commissions. We would also welcome regulation that establishes reasonable industry-wide broker commission norms.”
Also, last night Humana weighed in to support capping commissions paid to independent agents:
“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,” said Humana spokesman Tom Noland. “We believe this payment method ensures that agents and brokers are rewarded only when seniors are satisfied with their choices, and penalizes agents and brokers who use marketing tactics that result in beneficiaries signing up for a product they do not fully understand.”
A notice came out later last night from from Abby Block, Director, Center for Drug and Health Plan Choice (CPC) which rescinds the October 8th guidance (which changed the October 1st, guidance).
CMS is aware that there is significant concern about agent/broker commissions for benefit year 2009. As a result, we are rescinding our October 8, 2008 guidance document. We are working on ways to address the concern and expect to take regulatory action next week. We strongly suggest that you keep this in mind as you contemplate making any final arrangements regarding commission structures.
Note from Craig:
Why should CMS stop at regulating broker commissions? I think they should put a CAP on Direct-to-Consumer Ad Spending as well? What if a company spends too much on Advertising directly to the consumer? I think the Federal Government needs to help them out with this decision, too. Apparently, insurance companies aren’t capable of making a business decision on spending to acquire new business from independent agents, what’s to say they know how much money to spend on Advertising to acquire new business directly? I’m tired of those 30 minute infomercials on CNBC, anyway! I could go on. . .
united health care and humana teamed up to stab us in the back and lobbied to cms causing this huge cut in comissions as well as this split comission tying up our money for 5 months and counting while drawing intrest on our hard earned dollars and both united healeh care and humana lie and say that cms is to blame.
Within the Medicare Advanage Arena the stakes have never been higher for seniors who do not understand this extremely complex array of deductibles, copays, coinsurance , premiums, networks and the Insurance Company’s ability to change these plans any time during the year (drop prescription medications from their formulary) for example. However, the Insurance Companies proposes commissions that they think are fair, for agents managing the complexity of these plans and helping their clients with claims, enrollment problems, Billing
(Bank Draft administration), coordination of benefits, since we can’t really control the effective date anymore, this is controlled by CMS, understanding the Variability built into plans that resemble a moving target from month to month year to year. From my experience Medicare Advanage plans easily take 400 to 600% more time to service than at any Medicare Supplement worst case scenario, I have ever seen.
The home office people that agents have access to are not knowledgeable or proficient enough to assist agents at the level they need , they are trained to ” talk off ” the issues rather than solve them, as they do not share data bases, which would give them the ability see the entire process, but segmented demographics within their own company, as a job well done for them is simply sending an e-mail to a department to attempt correction of the problem, with no follow-up or follow through!
I’m thinking, we don’t get paid near enough! A lot of times we don’t even get paid , because of bad accounting on behalf of the insurance company themselves. Is there light at the end of the tunnel or an oncoming train, you tell me?
Thanks for keeping us informed.
Doctors, Firefighters, Police, Soldiers. They are all public service professionals. The Fire industry, the Police industry, the Military industry…ludicrous. Ah, but the Healthcare industry. There is something we Americans accept as a natural state of affairs. Making money off of sick people.
Doctors should manage health care, not insurance companies, not lawyers, not pharmaceutical companies. Doctors today are legally bound to order tests for things they know they can’t fix. They are tempted to order procedures that earn them large fees when no procedure at all would result in the same morbidity and mortality. Medical schools are ashamed that their graduates have to choose specialist careers instead of general practice.
Listen to former Governor of Oregon John Kitzhaber (a former emergency room doctor) when he tells you that health care is not a business. Doctors want immediate reform of a broken system.
Argue all you want about commissions, overhead, advertising, decile numbers, drug lunch talks, insurance compliance officers, medical seminars, nursing home employee pay scales, whether a $2,000 stent will give a patient an extra month of questionable quality of life. Then ask yourself a simple question. What will our grandchildren inherit? They are the only stakeholders.
Can’t anyone see this is Medicare’s way of taking care of Medicare? The more Medicare Advantage plans, the less need for personnel in Medicare (to take care of billing, etc). So Medicare has done what it can to keep the payrolls fat – make the approval process run through Medicare. And they took it one step further and made the approval to pay commission run through them, adding another layer. So Medicare has decided to keep the payrolls fat with MA here and if they succeed in getting it eliminated (stiff regulation, impossible commission schedules) then they can go back to becoming a large payroll claims processing and billing center. Medicare does what’s best for Medicare – not Seniors or anyone else…