Ritter Insurance Marketing, Craig Ritter

CMS Suspends Implementation of June 5th, 2009 Memo on Agent/Broker Compensation

Agents and Brokers should be getting this message from the Insurance Companies they are appointed with for Medicare Advantage very soon (perhaps Monday?). 

My Comments on this Memo (reading the tea leaves!)

  1. I would have preferred to see them reversing their initial guidance with respect to 2009, but the fact that they are suspending the implementation of the former guidance to Health Plans is encouraging.  I’m not sure that they would have suspended implementation if they didn’t intend to make a change?!?
  2. I’m happy to see that CMS is acknowledging the regulatory guidance is clear that for 2010 agents and brokers should be paid an initial fee for enrollments from a PDP to an MA plan.  This seems to beg the question, “Why are we handling 2009 differently than 2010?”  Generally, the answer has been that CMS didn’t have the administrative capability to instruct the plans on which commission to pay (which led to the whole file issue), however, the first file (the one with “errors”) did have the PDP members included in the file, so I don’t think this is an “administrative” issue any longer. . .
  3. CMS explicitly states they are examining 2009 guidance and expects to release additional guidance shortly.  They go a bit further in instructing the Health Plans to contact their agents and inform them of this.  I’d be surprised (but not totally shocked) if they would advise this if they intended to keep 2009 the same. . .  That would just be cruel.

Here is a copy of the e-mail which went out to Health Plans late Friday night.

Date: June 26, 2009

Subject: Suspension of implementation of June 5, 2009, HPMS memo on agent/broker compensation; Impending guidance on criteria for paying initial compensation fees in 2009

Suspension of Implementation of June 5, 2009, HPMS Memo on Agent/Broker Compensation
CMS has received feedback concerning the agent and broker compensation requirements in our June 5, 2009, HPMS memorandum titled “2009 Medicare Advantage and Prescription Drug Program Agent and Broker Compensation Refinements and Compensation Rate Adjustment for 2010.”  While we evaluate the issues and concerns being raised, we are suspending the implementation of these requirements.  We expect to issue clarifying guidance shortly.    

Impending Guidance on Criteria for Paying Initial Compensation Fees in 2009

CMS has received feedback about confusion on whether agents and brokers should be paid an initial compensation fee for 2009 enrollments from a PDP to an MA plan.   We believe our regulatory guidance is clear that for 2010 agents and brokers should be paid an initial fee for enrollments from a PDP to an MA plan.  CMS is examining its guidance pertaining to 2009 enrollments and expects to release additional guidance shortly.  Plans should contact their agents and brokers to inform them that CMS is reconsidering its guidance for 2009 and expects to release additional guidance shortly.

Posted by filed under CMS .


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