Understanding the Proposed CMS Rules

Key Dates

  • Rules Proposed: November 6, 2023
  • Comments Due: January 5, 2024
  • Outreach to Congress: Ongoing
  • Rules Effective, if Adopted: TBD (likely Q3 2024)

    As you’re aware, CMS recently issued proposed amendments to its regulations governing the 2025 Medicare Advantage Program (MA) and Medicare Prescription Drug Benefit Program (PDP). Click the link in the sidebar for more details.

    As conversations about these proposed rules have continued with our partners and throughout our industry, there remains much confusion surrounding the impact these proposed rules may have on our industry. As such, we’ve prepared the below FAQ designed to clarify our interpretation of the rules and how you should view them and, if needed, communicate their impact to your stakeholders.


    Frequently Asked Questions

    Q: What exactly is CMS’s role in proposing these rules?

    A: CMS, a division of the Federal Department of Health and Human Services, is charged with protecting public health by administering the Medicare program.  It issues regulations to help ensure that beneficiaries are protected and the sale of MA plans and products, among other health insurance offerings, are made in the best interests of consumers.

    Q: Can YourFMO summarize the proposed rule changes related to agents, brokers, and other third parties?

    A:  CMS is proposing three changes related to agent, broker, and third-party payments. CMS indicates that it is proposing these rule changes to help ensure that brokers and agents do not receive financial incentives that will influence them to favor any one Medicare Advantage plan or product that may not be in the best interest of a beneficiary.  The changes can be summarized as such:

      1. Generally, the proposed rules prohibit contract terms between Medicare Advantage organization and agents, brokers, or other TMOs that may interfere with the agent’s or broker’s ability to objectively assess and recommend the plan that best fits the beneficiary’s health needs.
      2. Set a single agent and broker compensation rate for all plans, while revising the scope of what is considered “compensation.”
      3. Eliminate the regulatory framework that currently allows for separate payment to agents and brokers for administrative payments.

    If passed as currently drafted, the new rule will cap payments made to brokers and agents for anything other than commissions to $31 per enrollment.  That “administrative payment” will include payments to brokers and agents related to training, travel reimbursements, and any other payment for services related to the enrollment into a Medicare Advantage plan or product.

    Q: CMS’s proposed rules seem to cover much more in the document than outlined above – how did YourFMO come to that interpretation?

    A: As is customary when federal agencies propose rule changes, the proposed language for the modifications to the regulations are accompanied by commentary or “press release” type language that provides additional detail surrounding the agency’s justification and motivation for the proposed rule changes.  It is important to remember that while the language in the release that accompanies the rule change is designed to help the impacted industry understand the conduct that the regulator is trying to regulate, the language that is binding on the industry is the language of the rule(s) being modified. That binding language is much more narrowly written than the commentary.

    Q: What is YourFMO doing to advance our industry’s and businesses’ interests as it relates to the proposed rules?

    A:  YourFMO is taking a comprehensive approach to evaluating the potential impact of the proposed CMS rule changes and advocate for favorable revisions. We formed an executive-level task force that meets multiple times each week; we are participating in a number of industry working groups to benchmark our impact analysis of the proposal and coordinate an industry-wide response; and we have delivered a comment letter to CMS alongside our partners to help educate CMS on our role in the Medicare Advantage distribution process and offer constructive criticism on the proposal to help ensure it does not negatively impact our marketplace.”

    • Note: If you have a link to the letter online in the federal registry, would be good to include

    In addition, we have been meeting weekly with affiliate principals get their perspective on the proposal so we can incorporate their ideas into our advocacy efforts and communicate our interpretation of the proposal to them.

    Q: What can I do – or what should I say – to my partners and stakeholders about these proposed rules?

    A: It’s important to note that our interests our generally aligned with CMS’s stated goal of helping to ensure that beneficiaries purchase Medicare Advantage plans that are in the best interest of their health needs.  We believe that we provide services that help ensure that goal, and we don’t want CMS to believe that anyone is being unduly incented to sell one carrier’s product over another due to additional payments made to brokers or agents. With that said, we believe that capping administrative payments to brokers and agents at $31 will be disruptive to the sales process and may have the effect of reducing important services that brokers and agents provide to beneficiaries.

    Q: I’m an agent – how can I get involved?
    A: If you were one of the thousands of independent agents who submitted a comment letter to CMS, thank you! While your action was an important first step in our fight for fair rules regarding agent and broker compensation and consumer choice, there’s still more work to be done. As a critical stakeholder, we encourage you to send an email to your Congressional representatives expressing the value that Agents and FMOs provide in MA distribution and post-enrollment support. Click here or the link on the left-hand side of the page to access an easy-to-use online tool form which you can send a pre-written email directly to lawmakers in your state and district.
    Q: What happens next?

    A: With the comment period now closed and efforts underway to continue education efforts with CMS and U.S. lawmakers, CMS has begun considering whether to make any modifications to the proposal. Once it determines how the final rule should read, it will publish the final rule in the Federal Register and establish an effective date for the rule, which in this case will be in advance of AEP 2025. Once we know what the final rule will require, we’ll communicate any changes that we’ll have to make to our business processes related to the distribution of Medicare Advantage plans and products to you.

    Click [here] view the FAQs pertaining to CMS’s updated rules for MA marketing issued on April 5, 2023.

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