Payments to Medicare Plan Brokers Need Reform, MedPAC Says

Payments to brokers who enroll people in Medicare plans should be reformed so that no preferential treatment is given for enrollment in Medicare Advantage (MA) instead of fee-for-service Medicare, several commissioners said at a meeting of the Medicare Payment Advisory Commission (MedPAC).

As the system works now, “there’s no financial incentive to keep people in traditional Medicare,” Commissioner Stacie Dusetzina, PhD, of Vanderbilt University School of Medicine in Nashville, Tennessee, said at Thursday’s meeting. “You shouldn’t be financially harmed as a broker for helping [enrollees] pick the things that work best for them.”

Commissioner Lynn Barr, MPH, of the Barr-Campbell Family Foundation in Lahaina, Hawaii, agreed. “We should be paying brokers the same if they put beneficiaries in Medicare Advantage or in fee-for-service Medicare,” she said. “We need to treat people like capitalists and stop pretending they’re going to do things out of the goodness of their heart.”

The commissioners were responding to a presentation by MedPAC staff members on the results of their discussions with beneficiary focus groups. Staff members conducted 24 focus groups: 21 in-person groups in Philadelphia, Phoenix, and Dallas, and three virtual focus groups with rural Medicare beneficiaries across the country. The groups included 31 fee-for-service Medicare beneficiaries and 41 MA enrollees. They also interviewed 28 clinicians.

Staff members emphasized that the focus groups weren’t meant to include a representative sample of beneficiaries, but rather were convened in order to give MedPAC a snapshot of beneficiaries’ feelings about their Medicare plans and the process of enrollment.

When asked what resources they used to make their enrollment decisions, beneficiaries cited brokers, plan representatives, friends and family, and CMS resources, said Katelyn Smalley, PhD, a senior analyst for MedPAC. Only one person said they had used a State Health Insurance Assistance Program (SHIP), a government-funded program designed to give those enrolling in Medicare unbiased information about their choices.

Commissioner Gina Upchurch, RPh, MPH, executive director of Senior PharmAssist, a SHIP program in Durham, North Carolina, was concerned about the lack of SHIP use. “You get what you pay for, and we’re hardly paying SHIP programs,” she said. “It costs us about $250,000 to do the work in a year, and we get about $25,000, so it’s a [fraction] of what it costs us to do it.”

Upchurch noted that, going forward, at least one plan sponsor won’t pay brokers anything at all if they enroll beneficiaries in a standalone Part D drug plan — they only get paid for enrolling them in an MA plan. “The thing that I really care about is that it becomes more transparent,” she said, adding that many focus group members didn’t appear to know how their brokers were compensated. “They made $611 at a minimum for enrolling that person in MA, and when you renew it, [they] don’t do a thing and they get $300, and that’s going up next year,” she said.

According to one broker interviewed by MedPage Today, in addition to the plan mentioned by Upchurch, another plan sponsor is only going to pay brokers for Part D members who renew their plans, not for any new enrollments. Another plan will only pay for enrollment in some of its Part D plans, but not others. Brokers still do get paid for enrolling beneficiaries in a Medicare supplement plan.

Understanding the role of brokers would be “a very worthy thing to do,” said Commissioner Lawrence Casalino, MD, PhD, of Weill Cornell Medical College in New York City. In addition, “I would like to know more about why [SHIP programs] are not more used, and is that something Medicare and Congress might want to do something about? It’s very hard to get a clue about what you’re choosing and how to choose.”

Commissioner Brian Miller, MD, MPH, of Johns Hopkins University in Baltimore, agreed with the idea of more transparency regarding brokers, adding that they should be thought of like other salespeople. “When you buy a car or you’re going to buy new appliances, [the salespeople] are biased,” he said. In Medicare, “can we make it so that you are more aware of what those biases are?”

Miller, who is also a non-resident fellow at the American Enterprise Institute, a conservative think tank based in Washington, D.C., noted that “as a commission, we tend to talk primarily about problems with Medicare Advantage, while forgetting that there are problems in both” MA and fee-for-service Medicare. With fee-for-service, for example, “it’s really hard to figure it out, because there are different parts of Medicare — A, B, and D — and lots of options for supplemental coverage, and I have to make multiple decisions instead of one decision” as a new enrollee.

He also mentioned that one focus group member had said that when they called Medicare’s helpline to ask about whether a particular service is covered, “they won’t answer you. They’ll tell you it depends on the code. They don’t know what the codes are, and so they can’t tell you whether something is covered.”

Because both MA and fee-for-service have their own issues, “I think we should try and be more balanced in our approach to both of those programs, recognizing their different ways of Medicare beneficiaries getting health benefits, as opposed to one that’s good or one that’s bad,” Miller said.

Several commissioners were also upset that focus group members complained that provider directories for MA plans were out of date. “Most people say they want to know their doctors are in the network of the plan,” said Dusetzina. Without an up-to-date provider directory, “you can’t make an educated and informed decision, with or without help. So that should be totally unacceptable.”

MedPage Today Contributing Writer Cheryl Clark contributed to this story.