Are Pdp's Paid Pro-rated?

Feb 24, 2016

  1. russelltw
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    russelltw Guru

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    Just enrolled a client with a March 1 effective date for Medicare. Also did the PDP. Notices on my payment for the client was 75% of the commission.

    Is that how they are handling pdps also? Pro-rated?
    Thanks
    R
     
  2. craig_ritter
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    craig_ritter Guru

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    Which carrier is it? There are 3 types of commissions now for mid-year entry:

    1. Initial - no prior plan history.
    2. Initial - with prior plan history.
    3. Replacement (like for like).

    For #1, the plan has the option to pay the full initial or prorate.
    for #2, the plan must prorate the initial commission.
    For #3, the plan must prorate the replacement/renewal commission.

    Hope this helps! This would be true of PDP and MA/MAPD.
     
  3. russelltw
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    It was a Humana Wal-Mart pdp, client was aging into Medicare
     
  4. craig_ritter
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    Sorry for the delay, I was traveling on business Wed/Thurs!

    I looked at our commission statement and it appears that in 2015, Humana would true up the initial commissions to pay 12 months of initial commission, regardless of effective date. This transaction says, "MEDICARE 2ND HALF FIRST YEAR COMM", which is a bit of a misnomer since it's generally not 1/2, but anyway. . .

    2016 is different due to the CMS mandate that companies pro-rate BOTH initial and replacement commissions where there is prior plan history. So, both like to like and unlike to unlike are now pro-rated.

    I also looked at our 2016 commissions for Humana and did not find any "Medicare 2nd half first year comm" transactions. I'm checking with my Humana rep, but my expectation is that they will continue to pay the full 12 months on the "true new", like the case you're asking about. I'll update when I hear back!

    In other words, I think the second half payment will be coming to you, but I just don't think Humana has gotten around to true ups for mid year business yet.
     
    Last edited: Feb 26, 2016
  5. russelltw
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    Thanks Craig
    Extra characters....
     
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