The Centers for Medicare & Medicaid Services (CMS) issued its final rule revising the Medicare Advantage (MA) Program, focusing on MA agent and broker compensation as it relates to anti-competitive steering by agents and brokers to specific MA plans.
An estimated one-third of MA beneficiaries utilize agents and brokers to navigate the complex MA plan marketplace, including finding a plan for enrollment. In turn, the plans reimburse agents and brokers at a fixed rate set by CMS. Despite CMS parameters, MA plans have found ways to compensate agents and brokers for steering beneficiaries to their plans instead of plans that fit the needs of the individual. These loopholes, coupled with the fact that agents and brokers are not required to disclose all MA plans on the market, have required more regulatory oversight to ensure beneficiaries are enrolled in an MA plan that best serves their health needs.
As part of its efforts to promote fairness and transparency in the MA plan marketplace, CMS has updated the rule to limit agent and broker reimbursement for enrolling beneficiaries into an MA plan. In addition to expanding the definition of compensation to encompass activities agents and brokers undertake in enrolling beneficiaries, the rule increases fixed reimbursement amounts agents and brokers receive in connection with enrollment. CMS states the purpose of this guideline is to close loopholes that have allowed MA plans to compensate brokers for enrolling individuals in certain plans, which has resulted in brokers steering individuals to MA plans based on the financial incentive to the broker instead of the health needs of the individual.
In addition to addressing the financial incentives of brokers, the revised rule focused on other beneficiary rights, including increased protections for beneficiary data by limiting its distribution by Third-Party Marketing Organizations and broadening beneficiaries’ rights to appeal an MA’s plan decision to terminate coverage for non-hospital provider services. The updates to the rule are effective for the upcoming annual enrollment period, starting October 1, 2024.
