Ladies and Gentlemen,
This has been a very interesting year in the MA world because of the health care debate in Washington, the change in congress, and the recent changes in the guidelines from CMS regarding how we are able to go to market and compensate sales people. The guidelines have been more restrictive and obviously makes our lives more difficult but at the same time have worked to reduce the churning and improper marketing that had occurred in the past.
To describe this process as “fluid” would be an understatement. As we received these changes from CMS starting last September we had a lot of experts provide us guidance and their interpretation so that we could put policies and procedures in place. We had a rough start as we responded to CMS with our recommended commission structure only to receive further guidance that required us to change once again. We have been operating under this revised structure in good faith for the last 6 months with what I consider to be great success.
Recently we received new guidance based on the compensation schedules we received from CMS that we use to “true up” our payments for initial vs renewal to the agents. We use the best data we have available when we enroll someone as to whether or not they have been with an MA plan in the past or if this is the first time such as someone “aging in.” The first file we received indicated we were in line with our process and had very few reconciliation issues. The second file was a different story.
CMS has interpreted “like plan” to include those individuals who were enrolled in a PDP plan and not just people enrolled in another MA plan. The actual guidelines are quoted below:
Marketing Guidelines – Chapter 3 – 120.5.5 Compensation Cycle – page 128 – The regulations provide that, after a beneficiary is enrolled in an MA or PDP plan by an agent or broker, a renewal compensation would be paid for five years after the initial compensation year, and that if any agent or broker enrolls the beneficiary in a different plan of a “like plan type” during this first five year period, renewal compensation would be paid. A “like plan type” refers to PDP, MA or MAPD or cost plan.
Based on this additional guidance we have determined that we overpaid agents an initial payment when a renewal payment was required. I believe we are not alone in making this mistake as we have received feedback from other plans that our interpretation was not unique and that they too have had to reconcile their payment schedules.
We recognize this change will cause some anxiety and we will reach out to each of you individually to determine how we can reconcile our schedule of payments. We don’t want to “shock” the market so we will develop a fair and reasonable plan.
I am very sorry for the impact this change will have on each of you and I assure you that this is not taken lightly by HealthSpring. We value our brokers and want to develop a healthy and productive partnership for the years to come. Please expect a call from our management team so we can review the reconciliation process with you and how we can put this issue behind us with as little disruption as possible.
Regards,
_________________________________
W. Scott Clark
VP Sales & Marketing
HealthSpring of Tennessee, Inc.
44 Vantage Way
Nashville, TN 37228
More from Medicare. More from life
This has been a very interesting year in the MA world because of the health care debate in Washington, the change in congress, and the recent changes in the guidelines from CMS regarding how we are able to go to market and compensate sales people. The guidelines have been more restrictive and obviously makes our lives more difficult but at the same time have worked to reduce the churning and improper marketing that had occurred in the past.
To describe this process as “fluid” would be an understatement. As we received these changes from CMS starting last September we had a lot of experts provide us guidance and their interpretation so that we could put policies and procedures in place. We had a rough start as we responded to CMS with our recommended commission structure only to receive further guidance that required us to change once again. We have been operating under this revised structure in good faith for the last 6 months with what I consider to be great success.
Recently we received new guidance based on the compensation schedules we received from CMS that we use to “true up” our payments for initial vs renewal to the agents. We use the best data we have available when we enroll someone as to whether or not they have been with an MA plan in the past or if this is the first time such as someone “aging in.” The first file we received indicated we were in line with our process and had very few reconciliation issues. The second file was a different story.
CMS has interpreted “like plan” to include those individuals who were enrolled in a PDP plan and not just people enrolled in another MA plan. The actual guidelines are quoted below:
Marketing Guidelines – Chapter 3 – 120.5.5 Compensation Cycle – page 128 – The regulations provide that, after a beneficiary is enrolled in an MA or PDP plan by an agent or broker, a renewal compensation would be paid for five years after the initial compensation year, and that if any agent or broker enrolls the beneficiary in a different plan of a “like plan type” during this first five year period, renewal compensation would be paid. A “like plan type” refers to PDP, MA or MAPD or cost plan.
Based on this additional guidance we have determined that we overpaid agents an initial payment when a renewal payment was required. I believe we are not alone in making this mistake as we have received feedback from other plans that our interpretation was not unique and that they too have had to reconcile their payment schedules.
We recognize this change will cause some anxiety and we will reach out to each of you individually to determine how we can reconcile our schedule of payments. We don’t want to “shock” the market so we will develop a fair and reasonable plan.
I am very sorry for the impact this change will have on each of you and I assure you that this is not taken lightly by HealthSpring. We value our brokers and want to develop a healthy and productive partnership for the years to come. Please expect a call from our management team so we can review the reconciliation process with you and how we can put this issue behind us with as little disruption as possible.
Regards,
_________________________________
W. Scott Clark
VP Sales & Marketing
HealthSpring of Tennessee, Inc.
44 Vantage Way
Nashville, TN 37228
More from Medicare. More from life
