Federal Court Blocks Medicare Agent Pay Cap Regulations

[azmedsupagent]

I've read the whole ruling .Fmo's threw agents under the freakin bus saying the $100 not enough . They want it thrown out so there overrides not effected and the agents gets no raise . There's zero in there about them letting marketing money stay . They're trying to sacrifice the agent for their pockets . I hope cms crushes the user fmo's . They just did a summary . Even if it goes against them cms will appeal to higher courts to get thrown out

Here is what the plaintiffs argue in the suit that " c. Third, the Rule's $100 one-time increase to the compensation cap for administrative costs and services lacks factual support or a reasoned basis. After initially proposing $31, CMS selected $100 from thin air, offering only that "
everal commenters suggested that an increase of $100 would be an appropriate starting point." 89 Fed. Reg. at 30636. But the agency gave no explanation for agreeing with those unidentified commenters, which is notable given that 27 Case 4:24-cv-00439-O Document 1 Filed 05/13/24 Page 28 of 32 PageID 28 other commenters "suggested an increase of $200 or more." Id. In selecting among the numbers on the table, CMS was required to explain itself. But it declined to do so, pointing only to an unsupported and unexplained "belie[f]" that $100 "should provide agents and brokers with sufficient funds to continue to access necessary administrative" and support services. Id.



66. While assuring the public that "[c]ommenters' feedback, both general and specific, was closely considered" and that the agency had come to "believe it is necessary to update the compensation rate increase to better reflect the costs of Medicare Advantage agent or broker services," CMS ultimately concluded that "it would be extremely difficult for [it] to accurately" estimate the true cost of essential administrative services. Id. CMS thus selected a number without evidentiary explanation, effectively taking a guess that "the FMV rate for new enrollments" should be increased arbitrarily—instead of $31, now "by a total of $100" to "provide agents and brokers with sufficient funds to continue to access necessary administrative tools and trainings, to offset appointment fees and encourage the representation of multiple plans, and therefore to continue providing adequate service to Medicare beneficiaries." Id. at 30626.



what this means is they are arguing cms pulled this $100 number out of thin air. One could logically assume that if CMS did an actual careful analysis of the FMV for admin services provided by FMO it would be worth more than $100. They are saying the $100 is not enough.

 

[InsuranceGuy29]

Here is what the plaintiffs argue in the suit that " c. Third, the Rule's $100 one-time increase to the compensation cap for administrative costs and services lacks factual support or a reasoned basis. After initially proposing $31, CMS selected $100 from thin air, offering only that "
everal commenters suggested that an increase of $100 would be an appropriate starting point." 89 Fed. Reg. at 30636. But the agency gave no explanation for agreeing with those unidentified commenters, which is notable given that 27 Case 4:24-cv-00439-O Document 1 Filed 05/13/24 Page 28 of 32 PageID 28 other commenters "suggested an increase of $200 or more." Id. In selecting among the numbers on the table, CMS was required to explain itself. But it declined to do so, pointing only to an unsupported and unexplained "belie[f]" that $100 "should provide agents and brokers with sufficient funds to continue to access necessary administrative" and support services. Id.



66. While assuring the public that "[c]ommenters' feedback, both general and specific, was closely considered" and that the agency had come to "believe it is necessary to update the compensation rate increase to better reflect the costs of Medicare Advantage agent or broker services," CMS ultimately concluded that "it would be extremely difficult for [it] to accurately" estimate the true cost of essential administrative services. Id. CMS thus selected a number without evidentiary explanation, effectively taking a guess that "the FMV rate for new enrollments" should be increased arbitrarily—instead of $31, now "by a total of $100" to "provide agents and brokers with sufficient funds to continue to access necessary administrative tools and trainings, to offset appointment fees and encourage the representation of multiple plans, and therefore to continue providing adequate service to Medicare beneficiaries." Id. at 30626.



what this means is they are arguing cms pulled this $100 number out of thin air. One could logically assume that if CMS did an actual careful analysis of the FMV for admin services provided by FMO it would be worth more than $100. They are saying the $100 is not enough.

This is how I interpreted it, as well. I don't think they're coming after our pay increases. I think they're just saying we should be paid more, because all the "administrative help" money that agents were getting is now gone, so all expenses are now on the agent.

And they don't feel that $100 is enough, which I would agree with, if we now have to pay for all of our educational seminars, marketing materials, mailers, software, etc.

Granted, we're getting a significant increase in retention renewals of existing clients, but that will all be eaten up by inflation, eventually, and will be forgotten about, reallocated, and just blend into regular pay within a year or two.

That $100 is only one-time, and it's only for people that are specifically new to Medicare Advantage. Most agents aren't really writing tons of new people...most agents write lots of plan-to-plan changes, which are way less money.

I could be wrong, but I don't think our increases are at risk. I think the only outcome from this is that we could potentially get more money.

 

[Tscholar]

It is frustrating to hear so many independent agents applauding this news. I will translate it for you. Your upline figured out a way to pick your pocket, and you're not getting the raise CMS was about to give you.

If you are an independent agent and think this is good news for you, you should work for CMS because you are not smart.

$100 is not enough, that's like saying give me a higher pay, with no health insurance if I were an employee, when the value of health insurance is worth more than a few dollars in pay increase. And in this case, I would rather them allow administrative costs, like HRAs, than have the increase or better yet, give me both!

When I change my client's plans because something better is available, an extra incentive was that I knew I would get paid for my extra time by having them complete a HRA, which is an average of $75-$100/survey.

Also, people keep complaining about what FMOs don't do, but what about what the carriers do directly for the agents? Do you not realize that many of us receive marketing dollars DIRECTLY from the carriers? That helps a lot! With this new CMS ruling, carriers can't do that anymore, plus carriers, like Devoted, have taken away the rewards program, which could be used to buy promotional items, etc. So, this is bigger than just the FMOs. Many FMOs are valuable, like helping with AEP marketing, client retention, etc. Again $100 is not enough and CMS has NO IDEA what it takes for an independent broker to acquire and KEEP clients.

 

[wehotex]

Here is what the plaintiffs argue in the suit that " c. Third, the Rule's $100 one-time increase to the compensation cap for administrative costs and services lacks factual support or a reasoned basis. After initially proposing $31, CMS selected $100 from thin air, offering only that "
everal commenters suggested that an increase of $100 would be an appropriate starting point." 89 Fed. Reg. at 30636. But the agency gave no explanation for agreeing with those unidentified commenters, which is notable given that 27 Case 4:24-cv-00439-O Document 1 Filed 05/13/24 Page 28 of 32 PageID 28 other commenters "suggested an increase of $200 or more." Id. In selecting among the numbers on the table, CMS was required to explain itself. But it declined to do so, pointing only to an unsupported and unexplained "belie[f]" that $100 "should provide agents and brokers with sufficient funds to continue to access necessary administrative" and support services. Id.



66. While assuring the public that "[c]ommenters' feedback, both general and specific, was closely considered" and that the agency had come to "believe it is necessary to update the compensation rate increase to better reflect the costs of Medicare Advantage agent or broker services," CMS ultimately concluded that "it would be extremely difficult for [it] to accurately" estimate the true cost of essential administrative services. Id. CMS thus selected a number without evidentiary explanation, effectively taking a guess that "the FMV rate for new enrollments" should be increased arbitrarily—instead of $31, now "by a total of $100" to "provide agents and brokers with sufficient funds to continue to access necessary administrative tools and trainings, to offset appointment fees and encourage the representation of multiple plans, and therefore to continue providing adequate service to Medicare beneficiaries." Id. at 30626.



what this means is they are arguing cms pulled this $100 number out of thin air. One could logically assume that if CMS did an actual careful analysis of the FMV for admin services provided by FMO it would be worth more than $100. They are saying the $100 is not enough.

At one time (about 2005-07), there was an MA in Southern California that paid $700/app. It is a pretty simple formula: more agent comp, more agent sales. But ultimately, it is what got us to the current FMV rules. Are you saying that they might be able to negotiate more than 50/100 if it is all justified?

 

[DonP]

Do you really believe g

At one time (about 2005-07), there was an MA in Southern California that paid $700/app. It is a pretty simple formula: more agent comp, more agent sales. But ultimately, it is what got us to the current FMV rules. Are you saying that they might be able to negotiate more than 50/100 if it is all justified?

Do you really think they did this for the agent ? lol . This was done to take the $100 away and give it to them . This was done on a Texas ct or pro republican . I'm sure cms will bring the guys out and appeal this quickly .Nobody knows what happens but it looks like they want comp and overrides to be like last yr . That means the $100 gone and I see no marketing money talked about.

 

[hockeyday]

Do you really believe g

Do you really think they did this for the agent ? lol . This was done to take the $100 away and give it to them . This was done on a Texas ct or pro republican . I'm sure cms will bring the guys out and appeal this quickly .Nobody knows what happens but it looks like they want comp and overrides to be like last yr . That means the $100 gone and I see no marketing money talked about.

I agree with you Don, this has nothing to do with agents, zero, the fmo at the top of the food chain wants all of the $$ I can hear it already , we spent all this money on the court case fighting for you agents , we can afford to any marketing dollars going forward,

 

[wehotex]

I've read the whole ruling .Fmo's threw agents under the freakin bus saying the $100 not enough . They want it thrown out so there overrides not effected and the agents gets no raise . There's zero in there about them letting marketing money stay . They're trying to sacrifice the agent for their pockets . I hope cms crushes the user fmo's . They just did a summary . Even if it goes against them cms will appeal to higher courts to get thrown out

Some carriers actually wanted to comp the agent more (and still do) to stimulate sales. When 2008 MIPPA came out, the rumor was that Humana moaned that it did not want to pay what the others were paying, comp amounts all different.
That is how we got FMV.
All of those contracts between uplines and agent are third-party contracts that CMS has no business in. If the carrier or upline wants the business, they will comp more. I suppose that it could work to less comp too.

The MA's contract is between itself and the topline. All others are third party arrangements between topline and downlines.
The defunct Chevron deference may have brought up other questions as to why we have FMV in the first place. Maybe that figure is too arbitrary of a figure too? When you think about it, the FMV figure is only $200 (original amount) plus annual adjustments going forward.
So, CMS just happened to pick a round amount of $200 (thin air).

The plaintiffs did shop their right wing courts wisely to get the most favorable opinion possible. Everything has fallen in the plaintiffs' laps. I have to believe that it will be good for all.

 

[n3417511]

Do you really believe g

Do you really think they did this for the agent ? lol . This was done to take the $100 away and give it to them . This was done on a Texas ct or pro republican . I'm sure cms will bring the guys out and appeal this quickly .Nobody knows what happens but it looks like they want comp and overrides to be like last yr . That means the $100 gone and I see no marketing money talked about.

You are so right. 100/50 is gone, Health assessment is over, carrier marketing money will be gone providing money will now be going to the FMO and not the agent. The agent will now take the hit from this if CMS doesn't back this up in court. The biggest question is what will the carriers do? How do they value the role of the FMO. If the carriers decide to kill the overrides FMO's have been getting, I can see more to the agent. At least for now, plan on being happy with the old commission. I think this AEP is going to be NUTS. How many agents are going to concentrate on PDP plans? I know I won't have time for that. Especially when half of them will be noncommissioned

 

[hockeyday]

Some carriers actually wanted to comp the agent more (and still do) to stimulate sales. When 2008 MIPPA came out, the rumor was that Humana moaned that it did not want to pay what the others were paying, comp amounts all different.
That is how we got FMV.
All of those contracts between uplines and agent are third-party contracts that CMS has no business in. If the carrier or upline wants the business, they will comp more. I suppose that it could work to less comp too.

The MA's contract is between itself and the topline. All others are third party arrangements between topline and downlines.
The defunct Chevron deference may have brought up other questions as to why we have FMV in the first place. Maybe that figure is too arbitrary of a figure too? When you think about it, the FMV figure is only $200 (original amount) plus annual adjustments going forward.
So, CMS just happened to pick a round amount of $200 (thin air).

The plaintiffs did shop their right wing courts wisely to get the most favorable opinion possible. Everything has fallen in the plaintiffs' laps. I have to believe that it will be good for all.

Explain to me how poking the bear works out for the agents with no downline in the long run, where was the fmo when the call recording came out, same question 48 hour scope? Non stop robo calls from call centers? Heard nothing, why because it did not effect them, so tell me how is this good for me? I get high marketing dollars per app average is 150 per app, do you think I'm going to get that going forward? I don't, they are going to say we're broke, I all ready sent my email request today for aep dollars, never asked for that much money before,

 

[DonP]

You are so right. 100/50 is gone, Health assessment is over, carrier marketing money will be gone providing money will now be going to the FMO and not the agent. The agent will now take the hit from this if CMS doesn't back this up in court. The biggest question is what will the carriers do? How do they value the role of the FMO. If the carriers decide to kill the overrides FMO's have been getting, I can see more to the agent. At least for now, plan on being happy with the old commission. I think this AEP is going to be NUTS. How many agents are going to concentrate on PDP plans? I know I won't have time for that. Especially when half of them will be noncommissioned

BINGO. Fmo's talking crap . Carriers might be pivoting away from these crazy overrides . I think it would be insane if they crush the members with reduced benefit and don't cut overrides big . Agents will suffer so why won't Fmo's take a hit too ?