Pallone and Neal Urge CMS to Increase Oversight of Medicare Advantage Market
“Our nation’s seniors deserve access to unbiased and accurate information about coverage options that best serve their individual needs. We urge the agency to use its broad authority to regulate marketing and increase transparency and accountability of broker compensation.”
Energy and Commerce Committee Ranking Member Frank Pallone, Jr. (D-NJ) joined with Ways and Means Committee Ranking Member Richard E. Neal (D-MA) in sending a letter to Centers for Medicare & Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure urging increased oversight and transparency of broker participation and compensation in the Medicare Advantage market.
The Democratic Committee leaders’ letter comes as more seniors are enrolling in Medicare Advantage than ever before. Simultaneously, concerns are increasing over broker and marketing practices that may be leading seniors away from insurance plans best suited to meet their health needs in favor of plans with the best broker payment incentives. Medicare Advantage plans can circumvent CMS commission caps by paying brokers for marketing, recruitment, customer service, and other related services. This total broker compensation can amount to $1,300 or more, resulting in billions of dollars each year being redirected from patient care to marketing.
“Allowing Medicare Advantage plans to offer unreported bonus payments to their brokers can create misaligned incentives,” Pallone and Neal wrote. “We are concerned that these add-on payments are steering seniors into Medicare Advantage plans with the highest broker payment structure at the expense of plans that may be best suited for seniors’ health needs.
The Democratic health leaders encouraged the Biden Administration in their letter to build on recent efforts to address deceptive marketing practices and broker compensation to better protect Medicare beneficiaries and the program overall.
“We appreciate the efforts undertaken by CMS to address deceptive marketing and limit broker compensation. We urge the agency to take further action to protect the integrity of the Medicare program and its beneficiaries by regulating brokers’ total compensation in the upcoming Contract Year 2025 Part C and D Policy and Technical Changes proposed rule,” Pallone and Neal continued. “In particular, we urge CMS to require Medicare Advantage plans to report total broker compensation amounts, inclusive of any bonus administrative or incentive payments made to brokers.”
In addition to requiring reporting of total broker compensation, the Democratic Committee leaders urged the Administration to also reform the total amount brokers can receive in compensation per enrollee.
“[W]e urge the agency to reform total broker payments by including standardized limits on compensation,” Pallone and Neal wrote. “By ensuring broker payments are set at reasonable amounts, we remove incentives that encourage enrollment in plans with the highest broker payment that may not be best suited for seniors’ health needs.”
Read the full letter HERE.
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