Ritter Insurance Marketing, Craig Ritter

CMS Replies to My E-mail

July 2nd, 2009 UPDATE:  Final Guidance is IN!!!

6/26/09  EDITOR’S NOTE:  SEE BREAKING NEWS!!

I’m happy to report that I got a reply from CMS.  I’m not going to post the reply or who I’m communicating with at CMS, but I will give some details on how I interpret the response.

The good news is that CMS will be revisiting this issue.

The bad news is that CMS confirmed that they intended to treat the replacement of Original Medicare with a PDP as “renewal” commissions with respect to Medicare Advantage from the start.

At this point, I feel I’ve made “our” case to CMS in the strongest possible way and pointed out the inconsistencies with how CMS indicated they will handle future commissions in the exact same replacement senario and how their interpretation, intention and guidance (I believe) violates Federal Code of Regulations 422.2744 (a)(3).

Next steps:

  1. I DO NOT BELIEVE that Insurance Agents communicating directly with CMS on this issue will help our cause.  I have communicated with the appropriate persons at CMS, they have acknowledged my points and agreed to revist the question.
  2. As United States Citizens, I DO BELIEVE that Insurance Agents SHOULD communicate with their LOCAL US House of Representatives and US Senators to encourage them to press CMS to consistently interpret and apply Federal Code of Regulations 422.2744(a)(3).  If this decision is having an impact on your business, I think you should let your representatives know.  I believe this is consistent and appropriate with our civic duties to have a voice in how this law is being implemented by a governmental agency.
  3. I’m not a big believer in “Form” letters or e-mails, but I would like to highlight some points I think are very relavent in writing to your Congressional Representative and/or Senator(s).  BY ALL MEANS, please let your representatives know what you are doing for your clients and how this action is impacting you personally and from a business perspective.

Important points:

  1. CMS, by their own guidance, is not allowing insurance agents to receive “inital commissions” in cases where a Medicare Advantage product is replacing Original Medicare if the Medicare Beneficiary has a Part D prescription drug plan in 2009.  However, in 2010, CMS will view the identical senario in the opposite way.
  2. What type of impact will this decision have on your business, your clients and your employees, etc.
  3. The 2009 interpretation is not only the exact the opposite of 2010, but it also is in direct conflict with Federal Code of Regulations 422.2744(a)(3).  (If their 2009 treatment of broker commissions is not in dirct confict with 422.2744(a)(3), I’d like to hear that explained.)
  4. CMS has 5 Objectives in their Mission statement.  Their #2 objective is “Accurate and PREDICTABLE Payments”.  If CMS’ mission is Predictable payments, how can they arbitrarily treat brokers commissions one way in 2009 and the complete opposite way in 2010?  How can this be considered “Predicatable”?
  5. CMS’ treatment of broker commissions WILL NOT impact in any way whatsoever the payments which the Insurance Companies receive from the Federal Government.  The rates were set in early 2008 and this action by CMS will have no affect on that whatsoever.  In fact, the broker’s commissions are being held by the Insurance Companies, the Insurance Companies are willing to make the payment per the terms of their contracts with Insurance Agents, however, CMS must provide the list to the Insurance Companies in order for the Companies to pay.  CMS has provided the list, however, we dispute that the method which CMS is using to generate the list as it conflicts with 422.2744(a)(3).

These are just my ideas.  Here is a link to write your CongresspersonHere is a link to write your Senator.

If you would like to post your letter below, feel free to add it as a comment!!

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