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CMS Issues Guidance for Agent/Broker Compensation Processes

December 8, 2015 // News

abs-eye-on-complianceThe Centers for Medicare and Medicaid Services has recently provided guidance to Section 120.4.2 of the Medicare Marketing Guidelines regarding agent/broker compensation.  This guidance specifies when a carrier can pay full or pro-rated initial compensation.

CMS states:

There are three scenarios affecting how an organization may pay full or pro-rated initial compensation.

CMS has requested immediate updates to the carrier’s processes in order to be in compliance.

MARx report is the CMS Agent/Broker Compensation Report.

How does this affect agent commissions?

If a beneficiary is new to Medicare with no prior plan history, the agent will be paid the full or pro-rated initial compensation.

If a beneficiary has an unlike plan change, for example an MA or MAPD to a PDP plan, the agent will be paid the pro-rated initial compensation based on the number of months in the plan.

If a beneficiary has a like plan change, for example an MA to another MA plan, the agent will be paid the pro-rated renewal compensation based on the number of months in the plan.

If a beneficiary moves from an Employer Group Plan to a Non-Employer Group Plan, the agent will be paid the full initial compensation if there is no prior plan history.  If there is plan history, the compensation will be pro-rated based on the number of months in the plan.

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  1. John Smith says:

    Great Article!

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