CMS Changes Are Going to Lead to Commission Cuts for MAPD

[UKMike]

Is that for life and health? I know you have National Healthcare over in the UK, is there a market for any health products...such as Cancer or Accident insurance?

That is mainly life/investment,pensions, but I have to confess that I specialize in general niche insurance, rather than life assurance.

Permanent Health cover incl cancer etc is available. The NHS treatment is free, but the cover replaces lost income.

 

[senior-advisor-indiana]

If you did get out of the industry, what would you do? And who would help your 6 clients?

Rick

More than likely I'd get on disability and sell my book of business to you for a couple value meals at McDonald's, or a bitcoin...

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I don't understand the rant either.
Seems like the MAPD's are requiring same service work as med supps and maybe more. If their provider quits the network, med co-pays too high, or they don't have silver sneakers like their friend does...Ring-Ring goes the phone.

The rewrites are more educated and comparing plans to the mailed literature they get...they want low copays with a great network and lots of freebies!

And don't you just love the cases where you have to call Medicare on their behalf to get the effective dates, LIS, or why they have LEP?
Good news.....there are other products.

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They've been talking about that in life insurance:e.g. levelizing first year commissions and spreading it over 3 yrs or so.

It is a lot of work and a lot of bs rules and certifications to keep up with.

 

[Ncinsured]

I've got the same information but I believe it's a United healthcare thing. I know Cms is enforcing their rules on this next year. But I got a 2014 Aetna comm schedule that says they will prorate my initial but give me the balance on tru ups. They gave me a chart showing a 33$ comm for a dec 2014 enrollment but it show the balance in January

 

[Chazm]

I have yet to see this email from UHC. Anyone confirm in FL?

 

[Russ]

I have yet to see this email from UHC. Anyone confirm in FL?

Yes...I got it on Friday.

 

[Nikita]

I've got the same information but I believe it's a United healthcare thing. I know Cms is enforcing their rules on this next year. But I got a 2014 Aetna comm schedule that says they will prorate my initial but give me the balance on tru ups. They gave me a chart showing a 33$ comm for a dec 2014 enrollment but it show the balance in January

NCInsured, that's great that Aetna is going to give you the balance in January. However, it appears that UHC has no intention of giving the agents the balance of their full commission. If anyone reads this otherwise, please post your thoughts but I think the email was painfully clear that UHC doesn't give a hoot anymore about their MAPD agents.

 

[Ncinsured]

I'm hoping UHC somehow left that detail out concerning paying the balance on tru-ups. Also I never saw CMS say that 425 was not the initial rate anymore either. I cleared a 100k for the first time with UHC doing turning 65 clients. So it impacts me a lot. I had just enrolled a February app and could hardly drive home. IM just hoping UHC DOESNT BELLY UP and take my renewals from
The last few years. It's seems after they acquired Care improvement they went down hill. If I have learned anything in this industry is that you have to adapt to survive.

 

[sshafran]

NCInsured, that's great that Aetna is going to give you the balance in January. However, it appears that UHC has no intention of giving the agents the balance of their full commission. If anyone reads this otherwise, please post your thoughts but I think the email was painfully clear that UHC doesn't give a hoot anymore about their MAPD agents.

I sent an email in to the producer helpless desk about it, specifically asking about full true up when enrolled in the middle of the year.

Once the producer helpless desk emails me back, I'll post it. Their email was not 100% clear.

Sent from my iPad using InsForums

 

[Ncinsured]

September 23, 2013

Valued Partners:

Cigna-HealthSpring recently received industry-mandated guidance on our commission process that will change the way we pay commission payments as well as the timing of the payments. This notice is intended to explain the changes we are implementing to the commission payment process in order to comply with the CMS Marketing Guidelines.

Our current process identifies the plan year as twelve (12) continuous member months of enrollment. For example, a June 1st effective enrollment that remains enrolled for twelve continuous months would be due a renewal payment the following June. However, CMS has defined that the plan year is the calendar year (January to December) regardless of the month sold. We will adjust our payment methods to account for this direction. The process we are implementing allows us to use 2014 as a transition year from anniversary year to calendar year to best help our partners adjust their cash operating practices.

The following sections address Cigna-HealthSpring’s updated process changes by type of transaction. A terminology guide is provided in Appendix A as an additional resource for your benefit.

New Cigna-HealthSpring Applications

Upon receipt and verification that your application is approved, Cigna-HealthSpring will issue you a payment. At the time your application is received, Cigna-HealthSpring does not know how CMS classifies your potential enrollee (initial year or renewal year) and must wait to receive the CMS Compensation Report before we are able to pay you at the initial compensation rate should your enrollee qualify.

The first payment you receive upon receipt of your application will be at a portion of the renewal rate depending on what month of the calendar year your potential enrollee begins with Cigna-HealthSpring. For example, if you are looking to enroll someone for a February 1st effective date, you will receive 11/12th of the renewal rate, because the member is set to be enrolled with Cigna-HealthSpring for eleven (11) months (February to December) of the calendar year. Again, we are paying this against the renewal rate because we have not received the CMS Compensation Report indicating whether your potential enrollee is in their initial or renewal year. Table 1 below reflects what an agent would expect as a first payment by effective date, assuming the renewal rate was $213 (Note: $213 is the renewal rate for 2014 Medicare Advantage applications written in all states except for PA & DC; please refer to Appendix B to see all agent level rates by state for 2014).



Cigna-HealthSpring receives the CMS Compensation Report on a monthly basis and utilizes this report to determine whether your enrollee is in their initial or renewal year. Upon receipt, an additional payment will be made to you as the agent if the member is reported as being in their initial year. If the enrollee is reported to be in their renewal year, no additional payment will be made to you.

In the enrollee’s initial year, there are two possible scenarios for your enrollee:

1. The enrollee could have come to Cigna-HealthSpring from a like plan, such as another MAPD carrier
2. The enrollee could have come to Cigna-HealthSpring from a non-like plan, such as aging into Medicare for the first time
If the enrollee falls into the first scenario and comes to Cigna-HealthSpring from a like plan in their initial year, Cigna-HealthSpring is required to only compensate the agent for the months in the calendar year of enrollment that the enrollee is with a Cigna-HealthSpring plan. For example, if the enrollee’s effective date is February 1st Cigna-HealthSpring can only pay the agent 11/12th of the initial commission rate. Utilizing $425 as the initial rate, the agent would only receive $389.58, or 11/12th of $425 (Note: $425 is the initial rate for 2014 Medicare Advantage applications written in all states except for PA & DC; please refer to Appendix B to see all agent level rates by state for 2014).

Since the agent received $195.25 in the first payment for this enrollee, Cigna-HealthSpring would issue a second payment of $194.33 for a total payout of $389.58. Table 2 below reflects what an agent would expect to receive as a second payment by effective date and the total amount the agent would expect to receive for this being an initial year, like plan enrollment.



If the enrollee falls into the second scenario and comes to Cigna-HealthSpring from a non-like plan in their initial year, Cigna-HealthSpring will pay the full, initial rate to the agent, regardless of effective date. For example, if the enrollee’s effective date is February 1st Cigna-HealthSpring will pay the entire initial commission rate. Therefore, the agent would receive a total of $425 for this enrollment (Note: $425 is the initial rate for 2014 Medicare Advantage applications written in all states except for PA & DC; please refer to Appendix B to see all agent level rates by state for 2014).

Since the agent received $195.25 in the first payment for this enrollee, Cigna-HealthSpring would issue a second payment of $229.75 for a total payout of $425.00. Table 3 below reflects what an agent would expect to receive as a second payment by effective date and the total amount the agent would expect to receive for this being an initial year, non-like plan enrollment.





Cigna-HealthSpring Renewals

In the current Cigna-HealthSpring process, renewal payments are processed on the anniversary date of an enrollment (e.g. an enrollment whose effective date is 5/1/12 would be up for a renewal payment in May 2013). Based on CMS guidance, renewals should be paid based on a calendar year (January to December). Beginning in 2014, all enrollments with an effective date of 12/1/13 or prior will enter their renewal year in January. As an example, Cigna-HealthSpring has been paying all 5/1 effectives, regardless of effective year, in May of each anniversary year. Going forward, all 5/1 effectives will begin their renewal year in January of each year.

In order to get Cigna-HealthSpring on a calendar year payment schedule for renewals, 2014 will act as a transition year for all renewal payments in order to make all agents whole. The renewal paid in 2013 to all agents was meant to cover the anniversary year (e.g. a 5/1 effective paid in May 2013 should cover May 2013-April 2014, meaning that the first four months of the 2014 renewal year were prepaid to the agent). This would indicate that the additional amount owed to the agent for 2014 renewals are the months of 2014 that they were not prepaid on or in this example, eight (8) months (May 2014 –December 2014) worth of renewal payment. As an example, Cigna-HealthSpring would have paid $201.00 to the agent in May 2013 as the renewal payment for the twelve (12) months of May 2013 to April 2014. In January 2014, the agent will receive the additional payment for the remainder of the 2014 renewal year (May 2014 - December 2014) or $134.00. The only exception to this rule are 10/1, 11/1 and 12/1 effectives renewing in 2013, which will be paid the prorated amount for the remainder of the 2013 renewal year, as detailed in Table 4 below. Additional samples for 2012 effectives renewing in 2013 are also provided (Note: Renewal rates will change based on original Cigna-HealthSpring plan year; please refer to your contract from that plan year for applicable rates).





Cigna-HealthSpring Chargebacks

If an enrollee’s plan terminates from Cigna-HealthSpring, there may be a chargeback assessed to the agent in either a full or prorated amount. A full chargeback is assessed when an enrollment terminates within the first three months of the enrollee’s effective date. A prorated chargeback is assessed when an enrollment terminates between months four and eleven of the enrollee’s effective date. Should an enrollment terminate on 12/31 of any calendar year, a chargeback will not be assessed to the agent due to the termination of the plan year (Note: 2/1-9/1 effectives paid in 2013 for either a new application or renewal are exceptions to this rule, as commissions have been prepaid for some portion of 2014 and will need to be recouped as a chargeback should termination occur on 12/31/13, unless the plan is terminating).

Additionally, CMS guidance has clarified its stance on chargebacks in a renewal year. Cigna-HealthSpring will now be required to charge back a prorated portion of a renewal payment based on the number of months the renewal is effective with Cigna-HealthSpring in the calendar year. For example, a 1/1/13 effective that is paid a renewal payment of $207.00 in January 2014 that terminates on 3/31/14 will be assessed a chargeback of $155.25, or 9/12th of $207.00. Table 5 below outlines the renewal chargeback an agent would receive by termination date for any 2013 effective once paid their full 2014 renewal year payment in January.



Additional Questions?

Any questions on the new Cigna-HealthSpring payment guidance should be directed to the below email address. A response will be issued to you within 48 business hours. We look forward to assisting you!

[email protected]
Appendix A – Glossary of Terms

Terminology
Description
First Payment
Upon receipt of you application, Cigna-HealthSpring will compensate you with a first payment for the submission. This payment will be made at a prorated portion of the renewal rate, dependent on effective date of the enrollee in the calendar year.
Example: A 3/1/14 application that is submitted on February 3rd will receive a first payment of 10/12th of the renewal rate in mid-February.
Second Payment
Upon receipt of the CMS Compensation Report (delivered monthly to Cigna-HealthSpring), a second payment will be issued to all eligible enrollees who CMS has determined to be in their initial compensation year. This second payment is generally referred to as the “CMS Recon” or “New to MA” payment and it is paid once a month for all new transactions received on the CMS Compensation Report.
Initial Year
The CMS defined year that an enrollee is in for compensation purposes where they are eligible to receive all or part of an initial compensation rate.
Renewal Year
The CMS defined year that an enrollee is in for compensation purposes where they are eligible to receive all or part of a renewal compensation rate.
A new application could be compensated at a renewal rate if the enrollee is already in a renewal year as defined by CMS.
Calendar Year
The CMS defined compensation year of January to December.
Initial Compensation Rate
Amount Cigna-HealthSpring attests to CMS to pay an agent for an initial year enrollee, either in full or prorated, dependent on enrollment effective date.
Renewal Compensation Rate
Amount Cigna-HealthSpring attests to CMS to pay an agent for a renewal year enrollee, either in full or prorated, dependent on enrollment effective date.
A new application could be compensated at a renewal rate if the enrollee is already in a renewal year as defined by CMS.
Like Plan
A plan that is similar in nature and administration to an enrollee’s chosen Cigna-HealthSpring plan.
In an initial year, coming to Cigna-HealthSpring from a like plan indicates that only a prorated initial rate payment can be made to the agent, dependent on the enrollment effective date.
Non-Like Plan
A plan that is not similar in nature and administration to an enrollee’s chosen Cigna-HealthSpring plan.
In an initial year, coming to Cigna-HealthSpring from a non-like plan indicates that a full initial rate payment can be made to the agent, regardless of enrollment effective date.

 

[axeman462]

I have yet to see this email from UHC. Anyone confirm in FL?

Yes.
Got it on Friday