I think the link found under the post by Wellcare FMO regarding the Humana letter to CMS should be required reading for all agents in the MA market.
You will note that the Humana spokesman puts the level of commission they support at 4% of the "monthly government capitation rate paid to plans" and goes on to put that %-age at a dollar amount of $338. Simple math will tell you that they are getting $8450 (low-end... that means they make more on some plans).
A commission of $500 comes close to 6%. That the "tool" at Humana wants to lower our rates 2% shows you how important these percentages are. It just so happens the compensation they want to fix for FMOs at $200 comes to 2%! So, they want to make sure independents don't make more with a direct contract than what they would get through an FMO... (IMHO).
I had made an educated guess at these figures and made some comments about this in former posts. This is the first time I have had solid figures to back up my claim.
Agents armed with this information will be better informed when it comes to contract negotiations.
BTW: It did not escape my attention that the "tool" appeals to AHIP as an ally in his endeavor. We need to keep this in mind, also, when joining supporting organizations. This trade association obviously leans to the carriers... not an association necessarily in my favor.
You will note that the Humana spokesman puts the level of commission they support at 4% of the "monthly government capitation rate paid to plans" and goes on to put that %-age at a dollar amount of $338. Simple math will tell you that they are getting $8450 (low-end... that means they make more on some plans).
A commission of $500 comes close to 6%. That the "tool" at Humana wants to lower our rates 2% shows you how important these percentages are. It just so happens the compensation they want to fix for FMOs at $200 comes to 2%! So, they want to make sure independents don't make more with a direct contract than what they would get through an FMO... (IMHO).
I had made an educated guess at these figures and made some comments about this in former posts. This is the first time I have had solid figures to back up my claim.
Agents armed with this information will be better informed when it comes to contract negotiations.
BTW: It did not escape my attention that the "tool" appeals to AHIP as an ally in his endeavor. We need to keep this in mind, also, when joining supporting organizations. This trade association obviously leans to the carriers... not an association necessarily in my favor.
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