Medicare Agent Broker Compensation Rate Adjustment - Medicare Advantage Contract Year 2019
This memorandum provides contract year (CY) 2019 compensation limits for agents and brokers, directions for submitting amounts into the Health Plan Management System (HPMS), as well as training and testing requirements.
Compensation Rate Adjustment for CY 2019
As provided in 42 C.F.R. §§422.2274(b)(1) and 423.2274(b), the compensation amount paid to an independent agent or broker for an enrollment must be at or below the fair market value (FMV) cut-off amounts published yearly by the Center for Medicare and Medicaid Services (CMS).
The CY 2019 FMV cut-off amounts for all organizations are as follows:
5.9% increase ($27) on first year Medicare Advantage and 5.7% increase ($13) on renewal for 2019*.
PDP also increased the writing agent commission by 2.7%.
(*National rates referenced above. For Agent Use Only.)
NOTE: The FMV amounts for CY 2019 are rounded to the nearest dollar. The Initial Year amount is the maximum allowable to be paid for enrollments during compensation cycle-year 1. The renewal amount is the maximum allowable to be paid for enrollments during compensation cycle-years 2 and beyond.
Compensation Rate Submission for CY 2019
As in past years, all organizations must inform CMS via HPMS whether they are using employed, captive, or independent agents. Organizations that use independent agents must provide the initial and renewal compensation amount or range of amounts paid to these agents. Additionally, if an organization pays referral fees, the organization must disclose the referral fee amount. CMS has provided instructions for data entry in the HPMS Marketing Module User Guide.
Organizations may submit their agent/broker information in the HPMS Marketing Module June 4, 2018 through July 27, 2018, 11:59 pm EST. Please note that CMS does not consider the submission process complete until the organization’s CEO, COO, or CFO has completed the attestation in HPMS. Organizations that fail to submit and attest to their agent and broker compensation data by July 27, 2018 will be out of compliance with CMS requirements. Organizations will not be able to make changes to those submissions after the July 27, 2018 deadline.
CMS expects organizations to keep full records documenting that they are updating compensation schedules and paying agents and brokers according to CMS requirements.
Please note that the CY 2019 compensation information submitted will be made available for the public to view on www.cms.gov prior to the annual election period for CY 2019.
Curricula for Training and Testing Agents and Brokers for CY 2019
Regulations at 42 C.F.R. §§422.2274 and 423.2274 require that agents and brokers selling Medicare products, including employees, subcontractors, downstream entities, and/or delegated entities, be trained and tested annually on Medicare Parts A, B, C, D, and plan specific information. CMS further requires that agents and brokers obtain an 85% passing rate on the test.
In order to ensure the quality of all agent and broker training and testing programs, CMS annually provides minimum training and testing requirements to organizations. Organizations should review these requirements before developing their own agent and broker training and testing program to ensure compliance with CMS requirements. CMS permits and encourages organizations and third-party training and testing vendors to include other relevant topics, in addition to the minimum required elements.
The CY 2019 CMS training and testing requirements for CY 2019 may be found here.