Biden Administration Proposes Stricter Regulations on Medicare Advantage
Introduction:
In a move to address concerns of “anti-competitive” practices within the Medicare Advantage (MA) market, the Biden administration has introduced a proposed rule aimed at imposing tighter regulations. The focus is on enhancing rules that govern the compensation of agents and brokers involved in enrolling Medicare beneficiaries into MA plans.
Background:
The Centers for Medicare & Medicaid Services (CMS) has emphasized the need for regulations that promote fair practices, preventing plans from steering potential enrollees based on excessive compensation to agents and brokers rather than the enrollee’s best interests. The proposed rules aim to facilitate informed decision-making by Medicare beneficiaries.
Compensation Guidelines:
CMS has historically set upper limits on compensation for agents and brokers, intending to incentivize them to enroll individuals in MA or Prescription Drug Plan (PDP) plans that align with their healthcare needs. However, the proposed rule acknowledges that some MA plans and affiliated entities have found ways to circumvent these compensation caps, leading to increased payments to brokers.
Problematic Workarounds:
The proposed rule highlights various workarounds employed by MA plans, such as providing extra payments characterized as cash bonuses or additional benefits to brokers. These tactics can potentially sway brokers to prioritize plans with higher payouts rather than those that genuinely suit the beneficiaries’ needs.
Objective:
Lael Brainard, director of the White House’s National Economic Council, emphasized the goal of ensuring that seniors select plans based on their needs and best interests rather than financial incentives for brokers. The proposed rule seeks to eliminate the existing framework that allows separate payments to brokers and agents, promoting a more transparent and unbiased enrollment process.
Proposed Changes:
The CMS proposal suggests eliminating the current structure that enables brokers to receive additional payments and redefining the definition of “compensation.” The aim is to establish a clear, fixed amount that brokers can receive, irrespective of the plan chosen by the beneficiary. The proposed fixed compensation amount stands at $632 per MA enrollment, encompassing all activities related to enrollment.
Impact and Timeline:
If finalized, the proposed rule is slated to take effect in 2025. The changes are anticipated to better align with statutory requirements and ensure that compensation structures incentivize agents and brokers to enroll beneficiaries in plans that genuinely suit their healthcare needs.
Conclusion:
The Biden administration’s proposed rule marks a significant step toward addressing concerns of undue influence in the Medicare Advantage market. By focusing on compensation transparency and aligning incentives with the best interests of beneficiaries, the proposed changes aim to enhance the integrity of the enrollment process and ultimately improve the overall quality of care for Medicare recipients.
