Agent Compensation Changes in the Draft 2018 Medicare Marketing Guidelines

While the industry patiently awaits the Final 2018 Medicare Marketing Guidelines (MMG), learn which draft guidelines could have a huge impact on the industry if made final.

In the Draft 2018 Medicare Marketing Guidelines (MMG), the Centers for Medicare & Medicaid Services (CMS) has continued to revise and refine its guidance to address those trends present in the industry. However, one add in particular has caught our collective attention. In Section 120.4.4 – Additional Marketing Fees, CMS has added the following language “Note: Plans/Part D Sponsors that choose to pay for items not included in agent/broker compensation must pay at fair market value for services provided, and may not pay on a per-enrollment basis.” As anyone who has been “lucky” enough to work in agent/broker commissions knows – this little statement could have a huge impact to the industry if it becomes final.

In trying to determine the potential impact of this add, it is important to look at the background…

With the implementation of the Medicare Improvements for Patients and Providers Act (MIPPA) of 2008, CMS put in place, for the first time, regulations and guidance around agent commission. The purpose of these “new” regulations was to ensure a level playing field amongst all Medicare Advantage Organizations (MAOs)/Prescription Drug Plans (PDPs) and to also ensure agents were steering beneficiaries towards the best plan for them vs. the plan that paid the highest commission. Unfortunately, the industry has continued to push the boundaries and has attempted to create loopholes via “admin fees” despite numerous warnings and additional guidance from CMS

Of course, at this point, we don’t know if the language will stay as is in the final 2018 MMG or if this language will be used to put the industry on notice now for a change later. Whatever the case,  one thing is clear – CMS will continue to address those issues of non-compliance present in the industry regardless of how much of an operational burden that change places on the Organization.

Although it is important to wait until the draft guidelines become final to make any final decisions or modifications, here are some things to start thinking about and reviewing in the meantime:

  • Review your agent oversight program and corresponding reports and data in order to determine the strength of your program and address any potential gaps – before CMS does.
  • Review your agent/broker and Third-Party Marketing Organization (TMO) contracts to determine the payment currently in place and how that could change depending on the language in the final 2018 MMG.
  • Start reviewing your own TMO payment data over the past several years to determine how “fair market value” might be calculated if not on a per-enrollment basis.
  • Ensure your Organization (as the contract holder) understands the downstream payments being made by your TMOs and there is an audit trail related to those dollars.
  • Remember, CMS holds the MAO/PDP responsible for all actions taken by first-tier, downstream, and related entities (FDRs), so now is the time to ensure your Organization is compliant with CMS requirements.

If you have questions or need clarification regarding any of the information above, contact me directly at



Sentinel Elite™ is a flexible, module-based software solution designed to assist government managed care organizations onboard agents, provide training, manage ongoing oversight activities, and pay commissions effectively and compliantly. Because every organization is unique, Sentinel Elite™ can be licensed as a complete solution or tailored to address specific needs. Learn more >>

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