2014 Cms Changes for Year 7 Agent Comp Guidance

Most people don't stay on the same MAPD plan for over 6 years anyways.
My reading comprehension isn't the best but it looks like they are saying they will make rules for commission years 7 and beyond. Not necessarily taking it away but just making guidelines so everyone isn't switching people after year 6 just to keep commissions
 
Most people don't stay on the same MAPD plan for over 6 years anyways.
My reading comprehension isn't the best but it looks like they are saying they will make rules for commission years 7 and beyond. Not necessarily taking it away but just making guidelines so everyone isn't switching people after year 6 just to keep commissions

MA companies have always been at liberty to offer more than 6 years, so how is this news? In San Antonio, ONLY Humana offers the 6 year timeframe. All of the others have stepped up to the plate to offer more than that. It is very possible for a senior to stay on for 6 years or more when you work in an area where one plan seems to dominate and hogs over 50% of the MA market.
 
MA companies have always been at liberty to offer more than 6 years, so how is this news? In San Antonio, ONLY Humana offers the 6 year timeframe. All of the others have stepped up to the plate to offer more than that. It is very possible for a senior to stay on for 6 years or more when you work in an area where one plan seems to dominate and hogs over 50% of the MA market.

Again, my reading comprehension isn't the best but it looked like they were saying that last year companies were allowed to offer renewals past year 6 but sometime this year they will make guidelines to either limit or mandate the use of year 7 and beyond.

edit:
Year 7 Agent/Broker Compensation Guidance
Section 1851(j)(2) of the Social Security Act gives the Secretary the authority to establish
limitations on agent and broker compensation so as to create incentives for them to enroll
individuals into Medicare Advantage plans intended to best meet the individuals’ health care
needs. Section 1860D-4(l) extends these same limitations to the Part D program. The
implementing regulations found at 42 CFR §422.2274 and §423.2274 establish the limitations on
compensation including: the definition of total compensation amount, the 6-year compensation
cycle, initial and renewal compensation amounts, and rules for when and how compensation is
paid. The Medicare Marketing Guidelines (section 120) provide sub-regulatory guidance for
plans to operationalize the regulatory requirements.
While CMS established a 6-year compensation requirement for MA organizations and PDP
sponsors to pay independent agents/brokers, it was silent about what plans may do after the 6-
year cycle expires. We are now approaching the end of the first 6-year cycle, and a number of
plans have asked us whether they can continue to pay agents/brokers beyond the 6-year cycle.
As an interim step, we have advised MA organizations and PDP sponsors in our MMG (section
120.4.3) that they can, at their own discretion, continue to pay renewal compensation beyond the
six years.
We are concerned that agents/brokers may have an incentive to move beneficiaries to another
plan after year 6 in order to start a new 6-year compensation cycle. As a result, we intend to
propose rules in 2013 (for the 2015 contract year) addressing agent/broker compensation
requirements, including allowing MA organizations and PDP sponsors to continue to pay
agents/brokers compensation at an amount up to the renewal amount for years seven and beyond.
 
In the current guidelines, after year 6, the compensation cycle starts over, so you can move a Medicare beneficiary to a new plan in year 7 and get an initial commission. CMS is concerned that brokers might move people just to get the initial commission, so they may be putting out some new rules to address this. Keep in mind that a Medicare beneficiary may be in their first year with you, but in their sixth cycle year with CMS. CMS provides the MARx report monthly to the MA plans and this lists their member's cycle year and this is what the plans pay on.

I see this as encouraging plans to pay renewals after the 6th year, but also to address ways brokers can move beneficiaries to get another initial commission.
 
In the current guidelines, after year 6, the compensation cycle starts over, so you can move a Medicare beneficiary to a new plan in year 7 and get an initial commission. CMS is concerned that brokers might move people just to get the initial commission, so they may be putting out some new rules to address this. Keep in mind that a Medicare beneficiary may be in their first year with you, but in their sixth cycle year with CMS. CMS provides the MARx report monthly to the MA plans and this lists their member's cycle year and this is what the plans pay on. I see this as encouraging plans to pay renewals after the 6th year, but also to address ways brokers can move beneficiaries to get another initial commission.

Well they better get it announced prior to AEP. If not, one of two things will happen. There will be agents who don't know what year their client is in and be pissed off when they no longer receive commission. Or there are going to be a ton of people being changed to a new plan. Probably a combination of both.

The best thing CMS could do would be to continue renewals so there's no incentive to change.
 
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