Review of 2015 CMS Proposed Rules for Agent/Broker Compensation White Paper

Keith Kraemer, President of EvolveSPM, produced a white paper for RISE members that teases out the regulations and makes them clearer and more understandable.  He provides us with an insight into how they work as well as the pitfalls in understanding and making our broker / agent payment processes operational.  Ultimately, the broker/agent payment program involves significant financial and regulatory risk for a Medicare Advantage plan if it is not managed correctly.  If brokers and agents are not properly paid, it can prove to be a significant liability, yet due to the complexities, it is extremely difficult to be sure that we are compliant with the regulations.  While not intentional on the part of CMS, these regulations pose a trap to the unprepared MA plan.  Keith, through his white paper, helps us better understand what we are getting into. 


Some background:  When Medicare Advantage and Part D took off in 2005, it was the “wild west” with regards to broker/ agent distribution channels.  What had been the primary province of healthplan employed sales staff suddenly opened up to a sprawling array of independent brokers and agents.  For a few years, there were limited regulations and policies about the payment rates for this new army of sales people.  These agents were not accustomed to the tight regulations imposed by CMS on the healthplans, only those created at the state levels and not nearly as specific as to CMS regulations. 


Different MA plans paid different rates and there were temptations to brokers to churn Medicare Advantage members from one plan to another in order to earn better commissions.  After a tumultuous period of explosive growth in Medicare Advantage Private Fee For Service plans that sprouted up in every zip code in the country, it became clear that, without explicit payment rate-setting on the part of CMS, further chaos would ensue.  CMS stepped in to curb the excesses of the new distribution channel after sales practice abuses became front page news and Congressional attention was focused on the ugly shenanigans of the outlier bad actors. 


CMS has been honing their payment regulations ever since.  They continue to set market rates and establish member transactions in ever more specific terms, requiring healthplans to administer what has become significantly complex and operationally challenging broker payment policies.  Simple, homegrown Excel spreadsheets and even Access databases cannot keep track of these transactions.  Having seen this attempted, I can tell you that it consumes more resources by far  to try this approach, and it still leaves you vulnerable to the uncertainties of being wrong.  It is both an ineffective and inefficient way to tackle the problem. Keith’s explanations of the regulations will give you a better appreciation of why that is so.  


Check out the white paper here:

Categories: Medicare Sales
Tags: compliance, regulatory, brokers, agents

Log on to Your Rise Account

Forgot your password?
Create an Account

Association Sponsors

Latest Posts

It’s not Obamacare anymore. It’s our national health-care system.

By Drew Altman and Larry Levitt July 29 Drew Altman is president and chief executive of the Henry J. Kaiser Family Foundation. Larry Levitt is senior vice president of the Kaiser Foundation. Republicans failed to repeal and replace the Affordable Care Act early Friday because of divisions within their own ranks, and because they tried not only to repeal and replace the ACA but also to cut and cap the Medicaid program, generating opposition from many red-state governors and their senators. But most of all, they failed because they built their various plans on the false claim — busted by the Congressional Budget Office — that they could maintain the same coverage levels as the ACA and lower premiums and deductibles, while at the same time slashing about a trillion dollars from Medicaid and ACA subsidies and softening the ACA’s consumer protection regulations. Had they succeeded, they would have won a big short-term victory with their base, which strongly supports repeal, but suffered the consequences in subsequent elections as the same voters lost coverage or were hit with higher premiums and deductibles. ...
Read More

Where to Now? True North Again

By Kevin Mowll, Executive Director of the RISE Association The failure of the Republicans to repeal, replace, or wreck ObamaCare is a wakeup call for everyone, not just Republicans. While the RISE Association steers away from purely political commentary, the lesson of this protracted political mess needs to be called out for the sake of putting our priorities straight around public policy regarding healthcare reform. In the attached Wall Street Journal article, which suggests that bipartisan solutions are the only remaining way forward, the author proffers hope that the blistering truth will be obvious to all the participants in the 7-year-long fracas around repeal and replace. The bloodied players may still brood in frustration that their political wills were not enough to win, but the author wonders if cooler heads will prevail. I, for one, am not so sanguine; yet I can only hope. The lesson I take away from the many years of wrangling is that the ObamaCare political football games demonstrates that political wills are not the way forward. They lose sight of the True North issue at hand. Rather, the failures of both political parties in arriving at a bipartisan solution signals the fact that what is good for America is good healthcare policy, not political prowess over rivals. Governing from the fringe is not sustainable in a democracy. ...
Read More

Upcoming Conference


RISE West 2017 

Featuring three pre-conference workshops, and five tracks covering 20+ in-depth session topics, this event is an extraordinary value-proposition you don’t want to miss. Hear from industry thought leaders, as well as health plan and provider group experts who will share practical insights and updated lessons learned from the trenches on critical topics in risk adjustment, quality improvement, data management, coding compliance & more!


Upcoming Webinar

The Encounter Management Best Practices Playbook

What encounter best practices can managed care plans put into place to help them manage the pace of change in formats, rules and regulations? What do managed care plans have to stop doing if they want to ensure business continuity with their encounter operations in the face of change and bleeding revenue? What can you do to make sure your plan isn’t one of the ones that figured these things out too late? Join us to get answers to these questions and more on September 12th.


Connect With Us

Copyright © 2014 Resource Initiative & Society for Education. All rights reserved.