Archive for the ‘Part D’ Category

Here is a link to the memo:  MMG Corrected 8 14 14.

Here is a summary of some of the important clarifications:

1.  Section 70.6 Telephonic contact – I will probably need more clarification on this clarification.  MMG currently reads, “Agents may contact their own clients and Plans/Part D Sponsors may contact current enrollees at any time to discuss plan business.”  CMS clarifies that “Plan business” means their CURRENT PLAN and that “agent’s may not contact members, via the telephone, to discuss other plan options.  This is considered an unsolicited contact.”  Not sure if CMS is saying that agents cannot contact their own clients to discuss other options or that agents cannot contact plan members (not their clients) to discuss other options (like if a plan non-renews).

2.  Referral fees (Page 2) – Limits referral fees on PDP to $25.

3.  Payment of Compensation – Plans MUST wait until January 1st, 2015 to pay commissions on 1/1/15 effectives.

4.  Renewal Compensation – Starting with January 2015 renewals, renewal commissions on ALL MA/PDP business must be paid according to the 2015 Fair market value (FMV), regardless of the renewal commission in place at the time the policy was written.

5.  Admin Fees – Plans are allowed to pay admin fees to downstream entities such as FMO’s prior to January 1st, 2015.  (This seems like it would be difficult to administer as the agent commission and override would be paid at two different times, if the plans choose to do this.)

6.  Clarification on Initial payments – Clarifies that plans CAN pay either (1) the full initial commission for mid year entry OR (2) pro-rated compensation as long as there is no prior plan history, however, if the member disenrolls during the initial calendar plan year, the plan must charge back for ALL months the member was not enrolled (including months prior to enrollment).  If a plan enrolls an initial member (cycle year 1) with prior history of MA enrollment, they may only pay for the remaining months in the year.  Here is CMS’ example:

For example, a member ages into Medicare and elects an MA-PD plan (Plan A), effective April 1. The member moves and is eligible for a special enrollment period. The member elects a new MA-PD (Plan B), effective November 1. Plan A must recoup 5/12ths of the initial compensation (January through March and November through December) to account for the months the member was not enrolled in Plan A. Since the member had prior plan history when the member enrolled in Plan B, Plan B many only pay a pro-rated initial compensation equal to 2/12ths (November through December).

Read Full Post »

On Friday, February 15th, 2013, CMS released the 2014 Medicare Part D deductibles and co-insurance limits for 2014.  This was a part of their “2014 Advance Call Letter” which gives Medicare advantage plans and Medicare Part D plans advance notice of funding for calendar year 2014 so that they can start formulating their bids for the following year.  The final notice will be published by CMS on April 1st, 2013.

In a very unusual situation, the Medicare Part D deductibles and co-insurance limits actually declined in 2014 versus 2013.  The Medicare Part D deductible will fall from $325 to $310.  The Initial Coverage Limit will decline from $2,970 in 2013 to $2,830 in 2014.  The Initial Coverage Limit is the total negotiated value of prescription drug costs (both the insurance company portion and the Medicare beneficiary’s cost share) before the Medicare beneficiary reaches the “Doughnut Hole” or Coverage Gap.

The “Out of Pocket Threshold” decreased from $4,750 in 2013 to $4,550 in 2014.  The “Out of Pocket Threshold” is the amount of cost sharing borne by the Medicare beneficiary before they leave the Coverage Gap and enters the “Catastrophic Coverage” portion of the Medicare Part D benefit.  The “Out of Pocket Threshold” includes the following costs:  (1) the deductible; (2) cost sharing while in the Initial Coverage Limit; and (3) cost sharing while in the Coverage Gap.  Additionally, the portion of prescription drug cost borne by the Pharmaceutical companies for brand name prescription drugs in the Coverage Gap (this is sometimes called the Part D Rebate) is also included in the “Out of Pocket Threshold”.

Due to the provisions of the Affordable Care Act (ACA), Medicare beneficiaries will continue to pay lesser and lesser amounts for both their brand name and generic prescription drugs.  Ultimately, by 2020, the entire “Coverage Gap” will be eliminated; however, this is being phased in during the period from 2010 through 2019.  For example, in 2013, Medicare beneficiaries will pay 47.5% of brand name drugs and 79% of the cost of generic drugs.  The “rebate” is 50% of the cost of brand name drugs, so the insurance company actually pays 2.5% of brand name drugs and 21% of generics in the coverage gap.  In 2014, Medicare beneficiaries will continue to pay 47.5% for brand name drugs (50% covered by rebate and 2.5% by the insurance company), but the cost sharing for generic drugs will drop from 79% to 72%.

The following graph illustrates the changes in Plan and Member Cost Share from 2010 through 2020 with 2014 highlighted.


Finally, once the Medicare beneficiary reaches the “Out of Pocket Threshold” and into the catastrophic coverage, they will see the minimum copay decline as well.  The minimum copay for generics will decline from $2.65 copay to $2.55 copay in 2014.  For brand name drugs, the minimum copay will decline from $6.60 copay to $6.35 copay in 2014.  The Medicare beneficiary will pay either 5% of the negotiated cost of the drug or the minimum copays listed above, whichever is greatest.

On April 1st, 2014 CMS will finalize these dollar amounts; however, it is unlikely that they will not deviate by very much.

Read Full Post »

Yuval Levin’s opinion piece appears on the National Review Online’s “The Corner” blog.  Yuval offers some counterpoint to Paul Krugman’s “The Medicare Killers” opinion in the New York Times.  I’ll admit that I’m not that familiar with Ryan’s Medicare proposal, other than it would not apply to anyone over the age of 55.  The plan is labeled as the “Voucherization” of the Medicare system, though it may more closely resemble the “competitive” bid process in the Medicare Part D world.  The competitive bidding on Part D benefits has found success in that Part D premiums are projected to hold steady for the third straight year and that costs are running well under initial projections.

The chart below shows the actual spending on the Part D program from 2006 through 2011 versus the CBO estimates in 2003.  Spending for 2012 and 2013 are estimates versus the CBO projections.  The Part D program may actually be one of the few government programs which is coming in under initial projections.  For example, in 2012, the Part D program is currently projected to actually cost $61 billion versus an initial CBO projection of $105 billion (42% LESS than originally projected).  Competition was not the only factor in driving down costs, other factors included a lower than projected enrollment (CBO estimated 87% enrollment versus actual enrollment of 73%, a 16% difference) and a strong generic drug pipeline in the past few years.

Read Full Post »

NEW OFFER:  Click here to learn about our 2013 AHIP Medicare Training Reimbursement Offer!

Here is some general information regarding the 2013 AHIP Medicare Advantage and Medicare Part D General Compliance Traning:

  • The general website is https://www.ahipmedicaretraining.com.
  • If you have registered in the past, your username is your National Producer Number (NPN).  You can find your NPN by searching here.
  • If you haven’t passed the AHIP exam in 2012, you will need to take all 5 modules for 2013 before you are allowed to take the exam.  If you passed the exam in 2012, you will only need to take modules 4 and 5.  IMPORTANT:  The exam will cover all 5 modules, so even if you passed in a prior year, you should review modules 1, 2 and 3.
  • You can save a PDF copy of the 5 modules for self-study or print the slides.  The link is on the left bar after you click on a module..  Just right click and save to your hard drive or left click and print.  The PDF copy of the study modules DO NOT have the practice questions (see next bullet).
  • When clicking through the study modules, you can skip the practice questions, but you really shouldn’t.  Answering the practice questions wrong has no impact passing the AHIP, so don’t worry if you get the practice answers wrong.  Take your time with the practice questions and make sure you understand why each answer is correct.
  • The cost of the training is $150 if you do the training through the https://www.ahipmedicaretraining.com website.  DON’T!!  Generally, you can find the training for $100 (save $50) by going through a insurance company’s certification website.
  • Even if you take AHIP through a carrier’s website, you can use the AHIP training for ALL companies who require the 2013 AHIP for General Compliance Certification.
  • You get 3 attempts to pass the training with a score of 90%.  If you don’t pass on the first 3 attempts, you will have to pay another fee to try the test again.  IMPORTANT:  Many companies will not accept the AHIP test results if you don’t pass on one of the first 3 attempts.
  • Many companies will offer a “reimbursement” in addition to the reduced rate for AHIP.  My suggestion is to do a little “shopping” and certify with the carrier who you believe you will be doing some business with.  Generally, the reimbursement is based on submitting a small number of applications.  However, you will not qualify for the reimbursement unless you do the initial AHIP certification through that insurance company’s certification portal.
  • Ritter will be posting detailed information on each carrier’s certification process as the details come available.  To find the certification process you are looking for, go to www.ritterim.com and search for “Certification” or click here.  (Adding the carrier’s name will improve your search results!)
  • Some states will allow you to collect CE credits for passing AHIP.  There is an additional cost if you want to get these credits.  Make sure your state accepts them before you pay the fee!

Good Luck!

Read Full Post »

Following are the MAXIMUM commissions which CMS allows a Health Plan to pay for any 2013 Medicare Advantage enrollment:

State of California and New Jersey:

  • First Year Commission for an Initial (NOT like to like) Medicare Advantage enrollment:  $517.00
  • First Year Commission for a Replacement (Like to Like) Medicare Advantage enrollment:  $259.00
  • Renewal Commission (years 2-6, depending on CMS cycle year):  $259.00

States of Pennsylvania and Connecticut and the District of Columbia

  • First Year Commission for an Initial (NOT like to like) Medicare Advantage enrollment:  $466.00
  • First Year Commission for a Replacement (Like to Like) Medicare Advantage enrollment:  $233.00
  • Renewal Commission (years 2-6, depending on CMS cycle year):  $233.00

All other States:

  • First Year Commission for an Initial (NOT like to like) Medicare Advantage enrollment:  $413.00
  • First Year Commission for a Replacement (Like to Like) Medicare Advantage enrollment:  $207.00
  • Renewal Commission (years 2-6, depending on CMS cycle year):  $207.00

Following are Commissions for Medicare Stand alone Part D Plans (PDP) for ALL STATES:

  • First Year Commission for an Initial (NOT like to like) Medicare Part D enrollment:  $56.00
  • First Year Commission for a Replacement (Like to Like) Medicare Part D enrollment:  $28.00
  • Renewal Commission (years 2-6, depending on CMS cycle year):  $28.00



Read Full Post »

I’ve had the opportunity to review the 2013 Medicare Marketing Guidelines, so I wanted to share my thoughts on the MMG.  Primarily, this review is through the lens of the external agent or broker, but I’ve included some information on changes that won’t impact the agent day-to-day, but which might be “nice to know”.

Here is a link to the 2013 MMG.

Section 70.5, 70.6 and 70.7  (pages 49-51) provide the information on marketing through unsolicited contacts.  These are some of the most important sections for an agent to understand and closely watched by CMS.  I recommend any agents who are selling either Medicare advantage or Part D Medicare products review these 3 sections at least a couple times.

All of Section 120 (pages 87-94) is important for agents to understand, so I recommend reviewing this entire section thoroughly.  I will call out a few specific sections that are particularly noteworthy.

Section 120.2 (page 87) directs health plans to terminate agents (and report to the state Department of Insurance) who submit enrollment applications without holding an insurance license in the state where the Medicare beneficiary resides.

Sections 120.4 including 120.4.1through 120.4.7 deal with agent compensation, so it’s important for agents to understand how they will be paid.  It’s also important to know when they will be charged back commissions (section 120.4.6 gives the situations where a disenrollment in the first 3 months should NOT be considered a rapid disenrollment.)

Section 120.4.4 deals with developing and implementing a compensation strategy.  The first bullet talks about what CMS defines as first year commission versus renewal.  This, in my opinion, has been handled erratically by health plans.  CMS instructs that if a Medicare beneficiary enters a plan effective September 1st (for example) of 2012, the RENEWAL payments should begin in January of the following year (January 2013 in this example).  I’m still hearing about plans that wait until the plan has been in force for 1 year before paying renewals.  Note that CMS gives plans discretion (with regard to the initial payment) to either (1) pay the full initial commission or (2) pay a pro-rated amount based on the number of months which the beneficiary was enrolled.

The first bullet on page 91 deals with movement from an employer group Medicare advantage plan (Series 800) to an individual Medicare advantage plan.  This movement should create an INITIAL commission for the agent.

The fourth bullet on page 91 is interesting in that a Health Plan is able to consider an external broker the same as an “employed agent” if the external broker only represents ONE PLAN exclusively.  This means that the HP is not bound by CMS compensation guidelines.

The last bullet on page 91 deals with when a plan (OR AGENT) elect to terminate their contracts and how existing renewal compensation is handled. Many plans will not pay renewal compensation if an agent is terminated (even if “not for cause”), because of CMS’ “in good standing rules”.  This section, however, indicates that the terms of the contract can dictate remaining cycle year renewals.  This makes me believe plans may have more discretion than I previously thought.

Section 30.12 directs health plans to include their Overall Star Ratings for the plan in 3 locations:  on their website, on the Summary of Benefits and on the Enrollment Form.  There continues to be a quality focus on Medicare advantage plans and CMS will continue to highlight Star Ratings as a measure of quality.

Sections 40.8 and 40.8.1 provide guidance for the listing of telephone numbers.  Section 40.8 improves the readability of Marketing pieces in that the Hours of Operation only needs to be listed once on a marketing piece, even if the phone number is listed several times.  Section 40.8.1 mandates that if an external broker’s phone number is listed on a marketing piece, the health plan must also list their telephone number (and hours of operation once).

Section 70.10.3 provides Scope of Appointment guidance.  I recommend all agents are thoroughly familiar with this section as it is a focus area for CMS.  Note that CMS indicates that the SOA should be obtained 48 hours in advance of the appointment.  Also, if the SOA is not obtained 48 hours in advance, the agent needs to document the reason.

It is interesting in 70.10.3 that CMS indicates that plans are allowed and ENCOURAGED to employ the use of technology when acquiring SOA’s.  This includes e-mail, so I’m wondering if a plan will develop a method for obtaining SOA’s with e-mail.

Section 70.10.4 deals with “walk ins” with respect to obtaining a SOA.

Following are just some changes I find interesting:

In 2012, CMS put an additional limit on nominal gifts.  In addition to the $15 limitation, CMS put an annual cap of $50.  In 2013, CMS clarified in section 70.2 (see NOTE) that this does not include PRE-enrollment nominal gifts.  Thus plans only need to track members.  One caveat is that plans can’t intentionally make multiple nominal gifts to PRE-enrollees.  For example, they can’t have 10 different nominal gifts (say at 10 different tables) available for giveaway at one marketing event.

As a coorelary to this, section 70.3 is removing the $50 per year cap for members where Health Plans wish to incentivize their members to take advantage of certain benefits.  One example would be smoking cessation.

CMS is allowing plans to deliver some documents in formats other than paper.  This is good to see happening!  The catch here is that the member must agree to receive the documents (specifying exactly which ones) and specify the method they are willing to receive it (like e-mail).  For example, if the member agrees, the plan could deliver the ANOC letter via email.  It will be interesting to see if health plans use agents to try and promote this type of efficiency in communications (example, agent delivers the authorization for electronic delivery at the time of enrollment).  I’m sure there are some Medicare beneficiaries who would prefer getting notifications via e-mail or some other means, plus this saves time and money.

Another new item is the use of Multi-language insert (section 30.7.1) which now must be used by all plans regardless of whether or not at least 5% of their population is non-English speaking.  The multi-language insert must be used with the Summary of Benefits and the Annual Notice of Change (ANOC).

CMS did some rewording of certain disclaimers (Disclaimers are in section 50).  For example, the PFFS disclaimer which used to be about a paragraph long is not a short 2 sentence disclaimer.  CMS edited a number of disclaimers to use plain language as opposed to legalese.  For example, the PFFS disclaimer was,A Medicare Advantage Private Fee-for-Service plan works differently than a Medicare supplement plan. Your doctor or hospital is not required to agree to accept the plan’s terms and conditions, and thus may choose not to treat you, with the exception of emergencies. If your doctor or hospital does not agree to accept our payment terms and conditions, they may choose not to provide health care services to you, except in emergencies. Providers can find the plan’s terms and conditions on our website.

This has been revised to:  “A Private Fee-for-Service plan is not a Medicare supplement plan. Providers who do not contract with our plan are not required to see you except in an emergency.

Read Full Post »

Here is a handy guide published by CMS which reviews all of the enrollment periods available to Medicare beneficiaries to enroll in Medicare advantage and Medicare Part D (includes AEP, IEP, ICEP and SEP enrollments).

Click here to view.

Read Full Post »

Older Posts »


Get every new post delivered to your Inbox.

Join 438 other followers