CMS finalizes changes to agent/broker compensation

May 28, 2024

CMS has released the Medicare Advantage (MA) and Medicare Prescription Drug Benefit Programs Final Rule, which outlines the following changes to agent/broker compensation for 2025:

• The regulatory definition of compensation has been finalized to include all activities associated with sales to and enrollment of an individual into an MA or Part D plan, including payments for activities previously excluded under the definition of compensation (e.g., administrative payments).
• Reporting requirements have been removed, since agents/brokers would be paid the same compensation rate in a given year.
• The final national agent/broker fixed compensation amount for initial enrollments into an MA or Part D plan has increased by $100.
• Contract terms between MA/Part D sponsors and third-party marketing organizations in various capacities are prohibited, including any provisions offering volume-based bonuses for enrollment into certain plans.

The Blue Cross Blue Shield Association (BCBSA) supports CMS’s goal of eliminating incentives that inhibit an agent/broker’s ability to objectively provide health plan recommendations to beneficiaries.

To support uniform rule interpretation and implementation, the BCBSA also recommended that CMS provide a full list of terms applicable to activities associated with sales and enrollment, with further clarity on definitions. The BCBSA also recommended that CMS further engage stakeholders to determine the fair market value for administrative payments included under the compensation rate.

Compliance with the updated standards in the Final Rule starts Oct. 1, 2024, when marketing activities begin for the 2025 plan year.

Questions? Contact your Medicare broker manager.