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July 18, 2024 at 01:04 PM
What You Need to Know
- Medicare Advantage program managers think insurer pay for agent support services may distort the market.
- The program managers banned support services pay.
- A federal judge put off implementation, and Medicare managers have agreed to let the case continue at least into January.
The Biden administration has backed off from quick implementation of a Medicare plan agent pay change that could have disrupted the upcoming Medicare plan annual enrollment period.
The Centers for Medicare and Medicaid Services, the agency that runs Medicare, is going along with a Texas federal court ruling that temporarily blocks implementation.
The agency and two coalitions that sued in Texas to block the pay-change regulation filed a joint scheduling proposal with the Texas court Wednesday.
The proposal shows that the parties could submit motions, replies and cross-motions at least until Jan. 24, after the Jan. 20 presidential inauguration.
Both sides could submit motions for summary judgment, or requests for quick court action on the case, by Sept. 27.
Reed O’Connor, a U.S. District judge for the Northern District of Texas, on Thursday issued an order accepting the proposed schedule.
What it means: The odds that older clients will experience a reasonably normal Medicare plan enrollment period have increased.
The history: Private insurers provide Medicare Advantage plan coverage for 32 million of the 64 million Medicare enrollees, and they provide stand-alone prescription drug plans for 23 million of the enrollees.
The annual enrollment period for Medicare enrollees who want to switch plans runs from Oct. 15 through Dec. 7.
CMS has responded to reports of aggressive Medicare plan marketing strategies and high plan issuer project margins by adopting regulations that tighten federal funding and change agent pay rules.
Today, issuers can pay sales agents a commission of up to $611 for a new enrollment. Issuers also pay separately for agent support services from insurance marketing organizations, field marketing organizations and other types of distributors.
In response to allegations from some smaller plans that the support services pay distorts the market, CMS has eliminated the support services payment option and replaced the support services money with a $100 increase in the maximum commission payment for a new enrollment.
