CMS: New rule would cap commissions for Medicare Advantage brokers, agents
After lawmakers called for oversight over Medicare Advantage marketing practices three weeks ago, the Centers for Medicare and Medicaid Services is now proposing to limit the compensation brokers can receive from insurers.
The Centers for Medicare & Medicaid Services early this week proposed a rule that would limit how much compensation agents and brokers can receive for enrolling Medicare beneficiaries into Medicare Advantage plans. Commissions would be capped at $632, beginning with the 2025 plan year.
“Many people with Medicare rely on agents and brokers to help them make the best choice about their health-care coverage,” CMS Administrator Chiquita Brooks-LaSure said. “However, we are concerned that some Medicare Advantage plans are compensating agents and brokers in a way that circumvents existing payment rules.”
CMS said it has received complaints from state partners, consumer advocates and some Medicare Advantage plans that agents and brokers receive add-on and other financial incentives that are likely to influence which plan an agent encourages a beneficiary to select during enrollment. That would change if this proposed rule is finalized.
Compensation should reflect “only the legitimate activities required of agents and brokers by broadening the scope of the regulatory definition of ‘compensation’ so that it is inclusive of all activities associated with the sales to or enrollment of a beneficiary into a Medicare Advantage plan or Part D plan,” a CMS fact sheet said.
CMS’s proposed rule would eliminate the current framework that allows brokers and agents to receive separate payments. It also would redefine the definition of compensation to brokers to establish a “clear, fixed amount that agents and brokers can be paid regardless of the plan the beneficiary enrolls in.” The definition also would be expanded to include all activities related to enrollment.
The proposed rule comes as Congress has been asking CMS to more closely scrutinize broker compensation. Democrats and Republicans on the Senate Finance Committee called out misaligned incentives for Medicare brokers in a hearing last month. The Democratic leaders of two influential House committees last week asked CMS to require Medicare Advantage plans to report total broker compensation amounts, including bonuses.
Related: Medicare Advantage brokers (and deceptive pitches) scrutinized at Senate hearing
“We understand the importance of protecting Medicare beneficiaries from unscrupulous actors that use deceptive tactics and offer inaccurate information about Medicare products and coverage,” Jessica Brooks-Woods, CEO of the National Association of Benefits and Insurance Professionals, said at that time. “Licensed and certified independent agents work directly with Medicare beneficiaries to combat these misinformation campaigns. Instead, it is always the goal of licensed and professional health insurance agents to ensure that their clients purchase the coverage that best meets their personal needs and financial situation. “