2018 CMS Marketing Guidelines

Discussion in 'Senior Insurance Forum' started by Justin Bilyj, Jul 24, 2017.

  1. yogooglethis
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    yogooglethis Guru

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    Paying a non licensed person a referral fee is not compliant.
     
  2. salpro22
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    salpro22 Guru

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    Let's hope that you're right Craig. That would/will be YUGE news indeed. Looking forward to reading your next blog entry.
     
  3. sshafran
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    Earlier in the thread, the topic of the $100 referral/finder fee came up.

    After reading everything in the marketing guidelines, here is how I understand it. If anyone has further thoughts on it - I'd appreciate it, but this is how I understand it. Am I wrong?

    Referrals from clients and/or people on Medicare
    From section 30.9

    We can solicit referrals as we always have done. We can't mention any gifts if writing a letter - but we can give a gift as a thank you for a referral just like we've always done - it must be of nominal value, not based on a sale, etc.

    Nothing has changed. The main thing to note is that we can't pay a mapd client $100 for a referral...


    Referrals from agents / finders fees

    This fee can be contingent upon a sale. It's included in the list of "remuneration of any kind relating to the sale." (commissions, bonuses, gifts, prizes, awards, and referral/finder’s fees).

    The limit is $25 for PDP or $100 for MAPD.

    The referral source receiving the $100 does not need to be certified, so it seems.

    So, if John - a local p/c agent that I know - refers someone to me and I sign that person up for a PDP, then I can pay John $25 if I want to. If he refers someone to me and I sign that person up for a MAPD, then I can pay John $100 if I want to.

    If he refers someone to me and they sign up for nothing, then I don't need to pay John as my agreement with John is that the finder fee is based on the sale.


    Is that correct? Or does the other agent need to have a health license? It doesn't say - it just says agent/broker.

    The main thing here is that it seems like the guidelines treat referrals from "customers/prospects on Medicare" differently than referrals from those whom we've networked with professionally - like another agent.

    ----------

    Link to the guidelines in case anyone is interested.
     
  4. mdlovell
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    I don't have this in writing anywhere to support my statement. That being said...

    From my experience, the referral partner needs to have a health license in order to get the $100 referral fee contingent upon sale. Otherwise they would be limited to the other referral structure.

    So that p&c agent example would only work if the agent also had a health license.

    This comes from my experience of my former position. Part of that role was contracting agents to be eligible for a carrier's referral program that followed these rules. No health license meant not eligible to participate.
     
  5. somarco
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    I believe the license is only required if the referral fee is contingent on or tied to a sale. It is permissible to pay referral fees for "traditional" products (life, health, p&c) but MA plans may be different. CMS has some really stupid rules.
     
  6. sshafran
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    Ok - so this may be closer to accurate.

    • Client refers friend - you can send a nominal gift as a thank you, not contingent up sale.
    • Health Licensed Agent John refers MAPD business to you - you can send up to $100 - contingent upon sale.
    • P&C Agent refers MAPD business to me - I can pay $_, as long as it's not contingent upon a sale (i.e. $20 per lead). I don't know of anything in the Medicare Marketing Guidelines preventing this.
    Obviously, the best thing is to just get referrals and not pay out - but it's good to know what our options are.
     
  7. somarco
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    I believe the IRS frowns on "gifts" xs of $25.
     
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