Rep. Pete Stark (D-Calif.), chairman of the House Ways and Means Health Subcommittee, called on the CMS to cap Medicare Advantage sales commissions after reports that some health plans are paying higher broker commissions in a move he said runs counter to new federal regulations.
In a letter sent Wednesday to CMS acting Administrator Kerry Weems, Stark said that some health plans are offering commissions four times higher than they have in previous years, which could lead to an unprecedented amount of churning of beneficiary enrollment this year in a way that is disruptive to their care and detrimental to their coverage.
New regulations passed in September require the amount of money paid as a commission stay the same over five years. Before the new regulation, a plan could pay an agent $300 for signing up a new beneficiary and $100 for every year that person stays in the plan, Stark said. Over five years, the sales agent would make $700.
Now, though, some plans are paying a higher amount in upfront commissions, meaning that the sales agent stands to make much more over five years. With this one-time-only opportunity to churn beneficiaries, and lock in high commissions for the next five years, it is reasonable to expect that we will see unprecedented plan changes this year unless CMS takes action, Stark wrote.
Stark said that the CMS needs to resolve the issue before the Nov. 15 open-enrollment period. -- by Matthew DoBias
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