2025 Proposed Rule
from CMS

Annually CMS publishes a memorandum that establishes the maximum FMV Agent & Broker Rates, Referral/Finder’s Fees, submission, & Training and testing Requirements.

The carriers pay compensation in accordance with this memorandum.

In the proposed rule change, CMS addresses concerns that administrative fees will impact these compensation levels.

We have linked the rule for you to read. See below for the actual language, from the proposed rule, for the points we feel are most relevant:

CMS Releases Final Medicare Advantage Rule

On Thursday, April 4, the Centers for Medicare and Medicaid Services (CMS) released the much-anticipated final rulemaking… Read More

Final Rule Factsheet from CMS: Click Here

Impact to Agents

We believe these rules would eliminate any marketing assistance from all sources, including carriers, uplines, providers, or other entities. This will include…

  • Licensing/Appointment fees
  • CRM systems like AgencyBloc, or High Level
  • Quoting/enrollment tools like ConnectureDRX, Sunfire, and My Medicare Bot
  • Lead systems and programs including prospect lists
  • Call recording systems
  • Meeting and room space
  • Free marketing design help, such as logo development, web page, and/or custom-designed pieces
  • Discount or fully paid E&O, CE’s, and AHIP
  • Pre-approved presentations for events/meetings
  • Help with back office services including policyholder needs, commission issues, and contracting.
  • Compliance assistance and oversight, including filing marketing pieces, development of compliance plans, and Policies & Procedures


Contacting U.S. Senators

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Actual Language- Rule 42 CFR Parts 401, 405, 417, 422, 423, 455, and 460 Centers for Medicare & Medicaid Services 


the rise in MA marketing complaints noted above suggests that agents and brokers are being influenced to engage in high-pressure tactics, which may in turn cause beneficiary confusion about their enrollment choices, to meet enrollment targets or earn “administrative payments” in excess of their compensation payment. p. 239


We recognize that this approach could have some drawbacks, particularly as this policy would, in effect, leave agents and brokers unable to directly recoup administrative costs


CMS is concerned that these quick increases in fees have resulted in a “bidding war” among plans to secure anti-competitive contract terms with FMOs and their affiliated agents and brokers. If left unaddressed, such bidding wars will continue to escalate with anti-competitive results, as smaller, local, or regional plans that are unable to pay exorbitant fees to FMOs risk losing enrollees to larger, national plans who can. p. 241

We believe

that current contracts in place between FMOs and MA plans can trickle down to influence agents and brokers in enrolling more beneficiaries into those plans that also provide the agents and brokers with leads, regardless of the appropriateness of the plan is for the individual enrollees. In fact, FMOs could leverage these leads as a form of additional compensation by “rewarding” agents who enroll beneficiaries into a specific plan with additional leads.

p. 244

We recognize

that this approach could have some drawbacks, particularly as this policy would, in effect, leave agents and brokers unable to directly recoup administrative costs such as overhead or lead purchasing from its compensation from Medicare health and drug plans, unless the agent has a certain volume of business. For instance, the cost of a customer relationship management (CRM) system (the software used to connect and log calls to potential enrollees) is about $50 per month. This expense would require at least one enrollment commission per year to cover these costs, whereas it is currently permissible for an MA organization to pay for these costs directly, leaving the entire commission as income for the agent or broker p.249

Our industry voice can be heard. Please submit comments before

January 5th, 2024

How to Comment on the Proposed Changes:

Before you comment, think about how your business model would look should you not have access to quoting tools, contracting aids, compliance oversight, and marketing guidance.

If you are uploading more than one attachment to the comment web form, it is recommended that you use the following file titles:

  • Attachment1_<insert title of document>
  • Attachment2_<insert title of document>

This consistent file naming style will facilitate the comment review process and help agency reviewers identify the attachments you have uploaded.

To ensure that you won’t lose your remark in the event that you have trouble submitting it using the Regulations.gov web form, keep a copy of it in a different file.

When you comment, it should be concise, professional, and constructive.

  • Share the services you provide to the client, pre-, during, and post-sale
  • If you value the services you receive from your upline, explain what they are and how they help you to be the best possible advocate for your client. Think about the impact on you as an agent if you were responsible for paying all of those costs plus all marketing costs.
  • DSNP clients require extra attention. Explain why you do HRA’s and how they help develop the plan of care. Also, include your thoughts on the proposed changes for DSNP Special Enrollment Periods
  • We all have clients that value different items in a plan. We often see that may be more valuable based on locations where there are other resources available. Share your thoughts on proposed changes to Senior Supplemental benefits and your personal experiences with how your clients use them.

Things to remember when submitting feedback:

  • Talk about the valuable experience that you provide to this industry, one client at a time.
  • You should consider attaching client testimonials and other evidence showing how you have helped your clients and community. For example, do you host educational meetings without selling, just helping seniors understand Medicare?
  • CMS does not respond to form letters but is receptive to personal appeals. Write your own story
  • Do not include PHI for clients. Your comments will be public record, so all will be able to see them, and you will not be able to edit them.
  • Do copy your local government officials. They need to understand the negative impact these changes may have on their constituents.


NABIP FMO Survey for Agents


CMS' 2025 Proposed final Rule From Bob Brzyski, PFS Vice President

The Centers for Medicare & Medicaid Services (CMS) has introduced a proposed rule, CMS-4205-P, aimed at amending current regulations for Medicare Advantage and Part D programs. This proposal, set to take effect for the 2025 contracting year beginning September 30, 2024, includes significant changes in Medicare marketing and communications policies, particularly concerning agent and broker compensation as outlined in Section 1851(j) of the Act. These changes are expected to have a substantial impact on the Medicare sales distribution landscape.

We recognize that this approach could have some drawbacks, particularly as this policy would, in effect, leave agents and brokers unable to directly recoup administrative costs.

– The Centers for Medicare & Medicaid Services

These changes impacting FMO/Agency support, training, technology, and other items will impact beneficiary choice by reducing the agents that are not only offering Medicare Advantage but offering a wide variety of plans. In essence, this rule will have the opposite effect of what is being put forth.

In addition, the notion that small regional plans are getting anti-selected just does not stand up to what we see in the market. The free market year over year has varying top carriers including what regional carriers increase market share. The best plans for individual Medicare beneficiaries are what will continue to drive what plans are sold, period.

Key Aspects of the Proposed Rule Involve…

Eliminating Administrative Fees/ Overrides

The proposed rule intends to abolish compensation above the CMS maximum for individual agents/brokers, including overrides/admin fees paid at agency levels and higher. This could significantly affect agencies, especially those at the FMO/NMO level impacting the support, technology, and services being provided to agents. Find additional details on the Pinnacle 2025 Proposed Rule page.

Restrictions on Services Provided to Medicare Agents

Agencies and uplines may no longer be able to offer services such as quoting, enrollment platforms, such as Connecture and Sunfire, CRM software, support services such as website creation, logo designs, compliance guidance, discounted E&O and CE’s, marketing plan guidance, and agent/agency contracting.

Impacts on Different Agency Types

While all agencies would be impacted, LOA agencies and those focusing on ancillary product sales or who offer Medicare as a secondary service might find it easier to adapt to these changes. Agencies that are heavily focused on Medicare Advantage will be greatly impacted.

Changes in Marketing Reimbursements & Health Risk Assessments (HRA) Fees

The proposed rule plans to prohibit reimbursement payments/marketing allowances to agents/brokers for expenses and eliminate payments for completing HRAs.

Modifications in Commission Structures

Commission rates would continue to be standardized. This would include a small administrative increase that would in no way compensate for all of what would now be needed by agents.

Operational Adjustments for Agents & Agencies

The absence of uplines could necessitate direct contracting with carriers by agents and agencies, potentially leading to delays. Additionally, questions usually addressed by uplines must be directed to the carriers. If, and how quickly would carriers staff up to meet the huge demand of contracting, certifications, product training and more.

Our Industry’s Voices Need to be Heard

The CMS-4205-P proposal is a comprehensive document addressing these and other areas, detailed over hundreds of pages. The proposal is open for public comment until January 5th. CMS encourages professional and constructive feedback, particularly focusing on the value provided to clients and the potential impact of these changes on service capabilities. Comments can also be submitted through Regulations.gov.

What about Pinnacle?

Our team at Pinnacle will continue to be there to support your business and have made available resources for you to navigate and understand the 2025 Proposed rule and how it will impact not only your business but your Medicare clients. For more information, go to our 2025 Proposed Final Rule page for more detailed information on the rule and how to comment.

Reach out to a Pinnacle team member today with any questions.

Rebuttal Article From Angela Palo, PFS COO

Where a Medicare Advantage Broker Comp Proposal Falls Short

By Angela Palo

What You Need to Know

  • A group of nonprofit health plans wants to cap total Medicare Advantage plan agent and broker compensation.
  • The government already caps producer commissions.
  • The proposal would affect administrative fees and other non-commission payments.
  • An FMO owner says the proposal ignores the value of the services that good agents, brokers, and distributors provide.

For anyone who’s been in the Medicare insurance industry as long as I have, especially those who’ve worn hats from agent to marketer to field marketing office owner, you know that change is a fact of life.

But what I’ve been most heartened about all these years is that, despite everything thrown at us — from new regulations to constantly changing technology, to a more fragmented consumer environment — we keep moving our industry forward: for our agents, our businesses, and, most importantly, our clients

FMOs are product distributors that provide support services for agents.

But we’re more than that. We’re also coaches and supporters.

I’m proud to be part of a nationwide FMO community that’s working tirelessly to ensure that, no matter the changes we face, agents feel supported and empowered to grow their businesses and deliver peace of mind to their clients.

That’s the essence of the agent-FMO relationship: the understanding that we have the agents’ backs — and, by extension, their clients’ backs — when it comes to helping them find the right coverage for their unique needs.

Now, unfortunately, our ability to do what we do best for our agents is being threatened, and this time, it’s not from outside forces, but from those within our own industry.

The ACHP Proposal

The Alliance of Community Health Plans, a group for nonprofit regional health plans, has released a package of proposals that includes a strict cap on the amount of support a Medicare Advantage plan can provide an agent or broker, on top of the existing federal limit on sales commissions and other producer compensation.

ACHP claims that some producers get too much cash from some plans, and that this may lead to those producers steering clients toward the plans that spend the most on sales support.

Let me be clear: We all share a desire to improve the Medicare Advantage program and ensure that agents and consumers alike are protected from bad-faith actors and suspect practices. But ACHP’s latest recommendations aren’t the way to achieve that.

ACHP’s proposal of a cap on total broker compensation is misguided and disingenuous, and not only risks negatively impacting the valuable support that agents deserve, but consumer choice and protection, too.

First, it’s important to remember that the broker commission per enrollment maximum is set by the Centers for Medicare and Medicaid Services, the agency that sees the Medicare and Medicare Advantage programs, as a fair market value item. Period. End. Stop.

In truth, what ACHP is proposing — in particular, its suggestion for capping administrative fees — will undercut FMOs’ ability to provide the value-added services that so many agents rely on to serve their clients.

The Tools

Conveniently, the ACHP proposal will actually “steer” consumers towards ACHP members’ preferred plans, which are often limited in scope and may not be in consumers’ best interest — depriving the consumers and their trusted agents of the opportunity to consider the breadth of options available to the consumers in their areas.

One example is quote-and-enroll software tools.

All true FMO partners offer these tools to their agents, which show all available plans in a ZIP code and include features such as searchable information about a plan’s doctors, other care providers, and prescription drug benefits.

These tools position agents to make sure the product they present is the most comprehensive choice for their clients.

Before these tools were widely available, carrier directories were often outdated. Plan comparison tools were limited. The result? Beneficiaries were limited in their ability to purchase the best plan for them based on their financial, logistical or provider access needs.

That’s just one example of a tool provided by FMOs, funded by the very administrative fees the ACHP recommendation looks to limit.

What FMOs Do

I could give 10 more examples, but the point is that administrative fees drive compliance and support efficiencies that agents on their own could not afford.

In fact, the term “administrative fees” directly describes the very nature of the payments: The fees exist to directly support agents and their clients on a carrier-independent basis, with everything from marketing, training and administration services, to technology and compliance services.

Simply put, ACHP’s proposal fails to recognize the important role that FMOs play in supporting agents, and why our carrier partners entrust FMOs with their distribution needs.

FMOs are a critical support system for today’s agents.

We firmly believe that cleaning up Medicare marketing and cracking down on bad actors are critical to the long-term sustainability of our industry, but not at the expense of the over 1 million agents and their partners who are working tirelessly on behalf of — and doing what is right for — their clients.

Making Things Better

I firmly believe that our industry’s collective energy is better spent looking at the amounts offered and implementing requirements to justify those fees.

Are you providing compliance oversight? Providing enrollment tools and assisting with marketing campaigns? Helping train agents and ensure that they have implemented all the necessary security software?

If so, that would stop agencies that are not providing a true service to downlines from bloating the landscape.

Until then, I would encourage the FMO community to make sure all of your carrier partners are aware of everything you do. Transparency is key.

At the end of the day, we view the carrier and the agent as partners. As partners, we should be working together to provide the absolute best outcome for all our agents and their clients. That’s a vision I can get behind.

Angela Palo is the chief operating officer and co-owner of Pinnacle Financial Services, a national field marketing organization that serves health and life agents and financial advisors. She is a member of the National Association of Business and Insurance Professionals’ Medicare FMO Council.

Medicare Agency May Slash 2025 Broker Support Services Payments

What You Need to Know

  • A plan group said brokers have been using administrative support services payments to double their compensation.
  • The Centers for Medicare and Medicaid Services wants to eliminate the payments in 2025.
  • John Greene of the National Association of Benefits and Business Professionals says the payments mostly go to pay for important services.

The Centers for Medicare and Medicaid Services on Monday proposed big cuts in Medicare plan broker administrative support services payments for 2025, and an executive with the National Association of Benefits and Insurance Professionals says that, if the proposal is enacted as written, it would wipe out the current broker compliance support system.

Issuers of Medicare Advantage plans and Medicare Part D prescription drug plans would have to scramble to build their own broker support programs, and the cost of replacing the current broker compliance systems would lead to big increases in 2025 Medicare plan premiums, according to John Greene, senior vice president of government affairs at NABIP.

“That’s not good for the beneficiaries,” Greene said in an interview.

What it means: If you help clients with Medicare plans, your professional groups may be inviting you to Washington to explain what you do to federal policymakers.

If you work with Medicare plan users but do not provide Medicare plan-related services, you may still find that the intricacies of Medicare plan compensation arrangements are a hot topic of conversation.

The history: National Medicare plan telemarketers got consumers’, and regulators’, attention in recent years by running waves of television commercials advertising their call centers.

Consumers and consumer groups complained that high-pressure sales reps at some call centers pushed consumers to trade inappropriate Medicare plans for inappropriate plans or to make other unsuitable transactions.

The Alliance for Community Health Plans argued that some plan sellers were getting $1,300 per sale, through sales commissions and administrative services payments.

CMS, the agency that oversees sales of Medicare Advantage plans and Medicare drug plans — but not Medicare supplement insurance policies — began to take action starting with the 2023 plan year, by requiring agents and brokers to read standard disclaimers to consumers and record all sales calls.

For the 2024 plan year, CMS is prohibiting producers from combining educational seminars with sales appointments and setting other tight rules for appointment-setting.

2025 proposed regulations: In a 486-page packet of draft regulations, CMS called for Medicare plans to meet new behavioral provider network adequacy standards in 2025, to eliminate the problems that occur when clients who need psychiatrists discover that their plans have few, or that none of the psychiatrists in the provider directory has an opening for a new Medicare patient until sometime in the 2040s.

CMS has also proposed adding new rules for supplemental benefits, such as grocery discounts or small amounts of coverage for homemaker services. The agency wants plans to remind enrollees about any unused supplemental benefits in the middle of the year and to take extra precautions when marketing the benefits.

In the section on agent and broker compensation, CMS has proposed eliminating the current administrative support services payments and replacing them with an administrative payment that would start at $31 and be adjusted for inflation.

The 2021 national base-year commission used in compensation calculations would be $539.

In place of possibly getting about $650 in commissions in 2025 in most of the country, and a field marketing organization getting another $650 to provide support services, the agent would get about $680 and the FMO would get nothing.

“We seek comment on this proposal,” officials said.

The proposal would not affect sellers and distributors of Medicare supplement insurance policies, which fall under the jurisdiction of state insurance regulators.

The official Federal Register publication date for the proposal will be Nov. 15, and comments will be due 60 days after that date.

John Greene’s reaction: Greene said Medicare plan market observers may have looked at public CMS distributor compensation databases and interpreted the numbers to mean that some Medicare plan sellers could double their compensation by collecting both the sales commissions and the administrative services support payments.

Greene said that he has not run into any companies that have that kind of arrangement, and that field marketing organizations are providing the valuable, expensive services needed to meet Medicare requirements, such as systems for recording sales calls.

General agencies now provide similar kinds of services for agents and brokers in the commercial group health insurance market. That’s probably a sign that having independent firms offer the services is more efficient than having the insurers themselves try to provide them, Greene said.

Greene noted that NABIP talks regularly with staffers at CMS and the U.S. Department of Health and Human Services and has already talked to federal regulators about the proposed 2025 compensation changes. He said he expects the association to be communicating about the proposed changes a great deal more in the coming months.

Pictured: The Centers for Medicare and Medicaid Services offices in Woodlawn, Maryland. Credit: Jay Mallin/Bloomberg

Biden administration seeks to crack down on private Medicare health plans

Story by Amy Goldstein

The Biden administration is proposing a fresh crackdown on private health plans that have grown to cover half of the people on Medicare, restricting marketing practices as part of an effort to help consumers in the federal insurance system for older and disabled Americans get the health services they need.

Under a draft rule issued Monday by the federal Centers for Medicare and Medicaid Services, Medicare Advantage plans would be required to work harder to encourage customers to make use of extra benefits available to them, rather than the companies merely invoking them as a selling point.

The proposal also would help Americans with Medicare drug benefits gain access to biosimilars, less expensive versions of biologic drugs made from living cells or other organisms.

Older Americans choosing Medicare coverage “should not be subject to practices playing fast and loose with marketing rules,” Health and Human Services Secretary Xavier Becerra said during a Monday press briefing to outline the proposal.

The proposed rule marks the second time in a year that the administration has sought to stiffen regulation of Medicare Advantage, the private-sector version of Medicare that has soared in popularity in recent years. Late last year, HHS proposed a different set of changes that mainly focused on restricting predatory marketing practices, including deceptive advertising, by insurance brokers and agents trying to sell the private health plans to people on Medicare. That rule became final in April.

As President Biden seeks a second term in office, his senior aides are portraying the proposal as an aspect of the “kitchen-table economics” they are hoping will appeal to voters in the election a year from now.

Medicare Advantage was created in 2003 as part of the same federal law that added prescription drug benefits to Medicare for the first time since the vast insurance program came into existence in the 1960s as part of President Lyndon B. Johnson’s “Great Society.” The traditional version of Medicare allows people 65 and older and those with disabilities to choose their own doctors and pay monthly premiums for outpatient care. The managed-care plans in the privatized version often offer extra benefits popular with older patients, such as vision and hearing services, but those plans usually restrict patients to a narrower network of healthcare practitioners who have signed up to accept patients in a given plan.

When Medicare Advantage was created, replacing a few earlier forms of managed-care Medicare, the Republicans who held a majority in both chambers of Congress insisted the government pay the private plans more than the reimbursement rates under original Medicare, as an incentive for more plans to take part.

The incentive has succeeded. For the first time this year, Medicare Advantage enrollment accounts for slightly more than half of all Medicare beneficiaries — nearly 31 million people with the private plans — and the typical person on Medicare has about 40 private health plans from which to choose, a record number of options, according to KFF, a nonpartisan health-policy organization.

As its popularity has grown, the privatized version of Medicare has attracted increasing scrutiny, including from congressional Democrats.

“This builds on underlying concerns about confusion in the marketplace and aggressive marketing by insurers,” said Tricia Neuman, a senior vice president at the health policy organization KFF who directs its program on Medicare policy.

Specifically, the proposed rules would establish guardrails more firmly restricting the compensation of insurance agents and brokers who advise Medicare customers, setting a fixed amount for such advice, no matter which plan a consumer chooses. Currently, there are caps but some companies pay agents and brokers lavish extras, such as golf trips for steering business to them, Lael Brainard, director of the White House National Economic Council, told reporters during Monday’s briefing.

In addition, the rule change would require private health plans to notify individual Medicare customers halfway through a year what supplemental benefits remain available to them. According to an HHS fact sheet, a typical Medicare Advantage plan offers 23 health benefits not found in traditional Medicare, but usage is low. The proposal’s goal is to “ensure that the large federal investment of taxpayer dollars in these benefits is actually making its way to beneficiaries and are not primarily used as a marketing ploy,” the HHS document says.

Another facet of the proposal would require private Medicare health plans to expand access to mental health services by expanding the supply of behavioral health practitioners in offices and clinics, including marriage and family therapists and addiction treatment specialists.

The rule change would also affect coverage under Medicare Part D, as the program’s drug benefits are known. The proposal would go further than current federal rules in requiring plans selling the prescription drug coverage to help patients more readily gain coverage of biosimilar products.

The proposed changes announced Monday are being issued during the annual Medicare enrollment period, which runs from mid-October to December 7. The proposal will be open for public comments for 60 days. A final version would take effect sometime next year, in time for next fall’s enrollment period for 2025 Medicare coverage.

A new Biden proposal would make changes to Advantage plans for Medicare: What to know

Story by Maureen Groppe, USA TODAY

WASHINGTON − The Biden administration wants to make changes to private Medicare insurance plans that officials say will help seniors find plans that best suit their needs, promote access to behavioral health care, and increase use of extra benefits such as fitness and dental plans.

“We want to ensure that taxpayer dollars actually provide meaningful benefits to enrollees,” said Health and Human Services Secretary Xavier Becerra.

If finalized, the proposed rules rolled out Monday could also give seniors faster access to some lower-cost drugs.

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Administration officials said the changes, which are subject to a 60-day comment period, build on recent steps taken to address what they called confusing or misleading advertisements for Medicare Advantage plans.

Just over half of those eligible for Medicare get coverage through a private insurance plan rather than traditional, government-run Medicare.

Here’s what you need to know.

Extra Medicare benefits

Nearly all Medicare Advantage plans offer extra benefits such as eye exams, dental and fitness benefits. They’re offered at no additional cost to seniors because the insurance companies receive a bump up from their estimated cost of providing Medicare-covered services.

But enrollees use of those benefits is low, according to the Centers for Medicare and Medicaid Services.

To prevent the extra benefits serving primarily as a marketing ploy, the government wants to require insurers to remind seniors mid-year what’s available that they haven’t used, along with information on how to access the benefits.

“The rule will make the whole process of selecting a plan and receiving additional benefits more transparent,” Becerra said.

Broker compensation limits

Because many seniors use agents or brokers to help them find a Medicare Advantage plan, the administration argues better guardrails are needed to ensure agents are acting in the best interest of seniors. Officials said the change would also help reduce market consolidation.

“Some large Medicare Advantage insurance companies are wooing agents and brokers with lavish perks like cash bonuses and golf trips to incentivize them to steer seniors to those large plans,” said Lael Brainard, director of Biden’s National Economic Council.

“That’s not right. Seniors should get the plan that is based on their needs, in their best interests, not based on which plan has the biggest payoff for marketers,” Brainard said.

The proposed changes would broaden the definition of broker compensation so limits on compensation are harder to get around.

Behavioral health care

Medicare Advantage plans must maintain an adequate network of providers. Under the proposed changes, networks would have to include a range of behavioral health providers, including marriage and family therapists and mental health counselors.

An estimated 400,000 of such therapists and counselors will be able to bill Medicare for services next year under recently passed legislation intended to expand access to mental health services.

Lower drug costs

The administration wants to give seniors faster access to cheaper versions of biologic pharmaceuticals, which are made from living cells. The proposed change would give Medicare drug plans more flexibility to substitute a lower-cost version of a biologic – a “biosimilar” – for the more expensive original.

“Any increased competition in the prescription drug market is a key part of our comprehensive effort to lower drug prices,” said Neera Tanden, Biden’s domestic policy adviser.

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